Prudent accounting will show these introductions not as 'introduced capital' but as 'introduced assets' and will put a value on all of them. The value of introduced assets The value to be placed on intellectual property will be the amount that would have to be expended to buy it from someone else and the value to be placed on the manual and intellectual skills would be the amount that would have to be expended to acquire these skills. As discussed above, however, the figure of annual pay will be used as a starting point in the examples that follow. The distinction between property and skills in financial terms is that property is a one-off acquisition that depreciates with use and age whereas skills are acquired over a period and can appreciate with time and usage. What is more, every employee who is taken on brings with them skills that are an asset to the firm and are capable of generating revenue, otherwise they wouldn't be employed.
Revenue is generated from premises, equipment, consumables, materials and expertise.
Consumers buy products because they do not have one or more of the tools, materials, knowledge, skills or time to make the item for themselves. Note that skills and knowledge lie over and above the time spent in applying them. If one accepts that the company is receiving the full value of an employee's expertise after a year is past, then the expertise asset for that employee will have risen to that value at the end of the first year of employment. Strictly speaking, this rise will be exponential, but it will be easier to consider it to be linear for the present. Annual skills maintenance training bill 10000, upskilling bill 10000.