HUMAN RESOURCE ACCOUNTING

1. HUMAN RESOURCE ACCOUNTING • Dr. Anil Mehta

2. Definition “a process of identifying and measuring data about human resources and communication this information to concerning parties” American Accounting Association “accounting for people as an organizational resource. It involves measuring the cost incurred by organizations to recruit, select train and develop human assets. I t also involves measuring the economic value of people in the organization” Flamboiz

3. Objectives • Provide cost value information. • Effectively monitor the use of human resources. • Find whether human assets are appreciating or depreciating over a period of time • Assist in development of effective management practices.

4. limitations • It is not easy to value human assists in an organization. • HRA is full of measurement problems. • Employees and humans may not like the idea. • There is no empirical evidence to support the idea that HRA is an effective tool to measure the economic value of people in the organization.

5. Approaches to HRA Monitory measures • Historical cost method. • Replacement cost method. • Opportunity cost method. • Economic value method. • Asset multiplier method. • Discounted present value of future earning method.

6. Non monitory measures • Expected realizable value method. • Discounted net present value of future earnings.

7. Controlling cost of manpower • Management by objectives(MBO) • Ratio Analysis Cost of Recruitment Recruitment Cycle Time, Cost of Turnover, Cost of training • Personnel Productivity • Personnel Reports, Budgets and Audits

8. Thank You