Human capital has become a critical input for business development anda source of competitive advantage in the new economy. However,traditional accounting still recognizes human capital expenditures asexpenses rather than assets. Most criticizes that argue human capitalexpenditure should not be capitalized rest on the difficulty ofmeasurement and the uncertainty of future benefit. This article examsthe essence of human capital from the aspect of accounting theory andprovides a clear view to guide the measurement and recognition ofhuman capital.
