Prijevod 1

Human Resource
Accounting

Submitted By :
Gaurav ( 12020241078)
Isha Gupta ( 12020241079)
 http://www.slid
eshare.net/onlin

Contents
estudyalerts/hu
man-resource-
accounting-1

Introduction
Objectives of HRA
Importance of HRA
Limitations
Cost of Human Resources
Measurements in HRA
Cost Approach
 Introduction

Process of identifying and measuring data about
human resources and communicating this
information to interested parties
Quantification of the economic value of the people in
an organization
Measurement and reporting of the cost and value of
people in organizational resources : Flamholtz
Art of valuing, recording and presenting
systematically the worth of human resources in the
books of account of an organization
 Contd

1. Valuation of human resources
2. Recording the valuation in thebooks of account
3. Disclosure of the information in the financial
statements of the business
 Objectives

Improve management by analyzing investment in
HR
Consider people as its asset
Attract and retain qualified people
Profile the organization in financial terms
To have an analysis of the human asset
To aid in the development of management
principles, and proper decision making for the future
 Importance of HRA

Furnishes cost/value information for making management decisions about
acquiring, allocating, developing, and maintaining human resources in order to
attain cost-effectiveness

Helps the management in the employment, locating and utilization of human

resources

Helps in deciding the transfers, promotion, training and retrenchment of

human resources

Assists in evaluating the expenditure incurred for imparting further education

and training in employees in terms of the benefits derived by thefirm

 Contd

Management tool designed to assist senior management in
understanding the long term cost and benefit implications of their
HR decisions

Helps in identifying the causes of high labour turnover at various

levels and taking preventive measures to contain it

Helps in identifying improper or under-utilization of physical

assets or human resource orboth

Provides valuable information for persons interested in making

long term investment in the firm
 Limitations

No specific procedure for finding cost and value of
human resources of an organization
Form and manner of including HRA value in the
financial statement is not clear
Employee with a comparatively low value may feel
discouraged
Tax laws do not recognize human beings as assets
Measurements in HRA

 COST APPROACH

Cost

It is a sacrifice incurred to obtain some anticipated

benefit or service

Two portions :
Expense
Asset
 Types of Cost

Historical cost
Sacrifice that was made to acquire and develop the
resource

Opportunity cost
Money to be spent on HR was spent on something else

Replacement cost
Cost incurred in the replacement of present employees