Human Resource Accounting: Inc Guntur

HUMAN RESOURCE ACCOUNTING INC GUNTUR PUTTU GURU PRASAD

Need for H R A

With the growing emergence of the “knowledge economy” the traditional valuation has been called into question due to the recognition that human capital is an increasingly important part of an enterprise total value. This has led to two important questions  How to assess the value of human capital in addition to an enterprise tangible assets and 

Need for H R A 





How to improve the development of human capital in enterprise It is an extension of the accounting principles of matching cost and revenues and of organizing data o communicate relevant information in financial terms It can be used as a information tool for internal/external use (for emp, cust, invstr )and as a decision making tool for HRM

Approaches to HRA  The

American accounting association committee has defined HRA is the Process of identifying and measuring data about human resources and communicating this information to interested parties to facilitate effective management with in the organization

The aspects of HRA  Valuation

of human resource  Recording the valuation in the books of accounts  Presenting the information ion the financial statements of communication

Valuation of HR         

Historical cost approach Replacement cost approach Opportunity cost approach Standard cost approach Present value approach Net benefit model Reward valuation approach Total cost concept Aggregate payment approach

Importance of HRA       

It helps in decision making in The following matters Employment , locating and utilization of human resources Transfers, promotions, training and retrenchment of human resources Planning of physical assets vis-à-vis human resources Identifying the causes for high turnover at various levels and taking preventive measures to contain it Locating the real cause of low return on investment It helps individuals employees in improving their performance and bargaining power

HRA in India  In

view of growing importance of HRA many companies in India voluntarily giving information about their human resources like BHEL, SAIL, MMTC, NTPC, ONGC, EIL

Assumption underlying HRA 



People are valuable organizational resources capable of providing present and future services to the organization and such future services have economic value to the organization and can be measured The information relating to the human resource would facilitate various management decisions on acquisition ,compensation, training and development