Accounting for firms' training programs: an exploratory study

Purpose – This paper aims to analyse two competing approaches to accounting for a firm's investment in staff‐training activities: the accounting and labour economics approach (which argues that no asset should be recognized from training activity); and the human resources management approach (which advocates recognition of an asset).Design/methodology/approach – A case study analysis was conducted in two large Portuguese companies where human capital is said to be a critical factor of firm success. The authors used document analysis and interviews to help understand the training phenomenon from a company's point of view. This meant knowing of motivations, training programme curricula, training practices and expected benefits of training.Findings – The paper identifies and defines two situations concerning a firm's investment in human capital training: one, where no asset (value) is generated; and the other, where the accounting definition of an asset, requiring value generation, is satisfied.Research limi...