MOST BUSINESS leaders agree that employees are their biggest asset, and training them is critical for an organisation's success. Training employees makes an organisation agile, competitive and helps it generate business - as it improves productivity and performance.
Employee training, after all, is an investment.
But - and here the deviation starts while all believe training is an investment, most write it off as an expense. Have a look at balance sheets of top-50 listed entities in India, and you won't find a single line item called training investment on the asset side of the sheet.
All spending made on training is written-off as 'expense' in the same year. So, why do organisations treat training as an expense, but keep saying that it's an investment? Investment made in an asset generates a return (loss/profit) over a period of time. The key word here is 'over' a period of time. So, if employee training is an investment, shouldn't it be added to the balance sheet on the asset side and amortised over a period of time, like other assets? Sadly, this isn't true. The answer lies in the way our accounting standards are defined.
Bu hikaye Financial Express Mumbai dergisinin February 05, 2024 sayısından alınmıştır.
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Bu hikaye Financial Express Mumbai dergisinin February 05, 2024 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
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