The effect of disclosure of human assets on publicly traded companies in India

This study entails extracting the value of human assets from the financial statements of several publicly traded organizations in India. The research covered 7 years from 1998-2004 and 3 publicly traded organizations.; This human asset value was analyzed for its effect on firm value (stock price). The objective was to determine if there was a significant relationship between the two variables using correlation and coefficient of determination statistics. In addition, the net income and sales revenue of the organizations were analyzed to determine if there was a correlation between these 2 variables and firm value. It was determined that the correlation relationships were negative and positive depending on the industry of the organization. However, it was also determined that there are coefficient of determinations that indicate the changes in human assets, net income and sales revenue can account from 88% to 94% of the variation in firm value. The study also determined the quantification methods being used to measure the human assets as well as the attributes included in the equation. It was further determined that the human assets could be bifurcated and disclosed based on the attribute components rather than a single quantified amount in the financial statements of the various organizations.; Some implications of the study are that the investors may perceive employees as expenditures as in the industrial age, even though the technology industry is driven by knowledge capital (i.e. human assets). Also, organizations disclosed human assets in various ways within their financial statements that led to varying statistical results.