On the mystery of odd human capital values

Abstract

Purpose – The purpose of this paper is to elaborate the feasibility of market based estimations of the value of human capital in firms.Design/methodology/approach – The concept of intangible assets and market‐based valuation of human capital is presented. Cases of extreme estimates of human capital values are presented. The possibility of extremely low or even negative human capital values is examined.Findings – It is demonstrated that odd human capital values can be explained by referring to principles of valuating fixed assets and intangible liability.Practical implications – The paper demonstrates that market‐based methods for estimating the value of human capital of the firm can be feasible despite the existence of very odd human capital values.Originality/value – The findings of the paper adds to the discussion of how to valuate human capital in intellectual capital accounts in general and human capital accounts in particular.