The focus of this paper is on Human Resources Accounting which has not been properly integrated into the financial statement of various organizations and being regarded as assets. The main purpose of this study is to examine the issues involved in valuing human resource /people working in organizations, which has been regarded as the most valuable assets in business organizations, the benefits of attaching values and the challenges and obstacles of implementing the Human Resource accounting disclosures of such values in the firm’s statement of financial position. In the pursuit of the focus of this study the paper adopts exploratory and content analysis methods of secondary data. The paper reveals that the exponent of human resources valuation models in most cases have not dealt with the mode of recording and disclosure of the accounting information relating to human resources in the books of account or financial statements of the organization. In most cases, the human resource accounting information is given in the form of supplementary information attached to the financial statements. This is of great concern to accounting professionals and practitioners. The paper concludes that considerable research done is due to the increasing importance of human capital in the economy to develop the concepts and methods of valuing human resource that has been recognized as human resources accounting (HRA), and that there is a great need for evolving a system of accounting for human resource that is acceptable to professional accountants, mangers and other decision makers – investors, creditors and other stakeholders.
Human Resources Accounting: Issues, Benefits and Challenges, International Journal of Economics, Finance and Management Sciences.
Vol. 5, No. 3,
2017, pp. 129-138.
Afiouni, F. (2007). Human resource management and knowledge management: a road map toward improving organizational performance. Journal of American Academy of Business, 11(2), 124–31.
American Accounting Association (1973), “Report of the committee on accounting for human resources.” The Accounting Review, 48, pp. 6-11.
Cascio, W. F. (1998). The future world of work: Implications for human resources costing and accounting. Journal of human resource costing and accounting, 3(2), 9–19,http://dx.doi.org/10.1108/eb029045.
Cherian, J. & Farouq, S. (2013).Review of human resource accounting and organizational performance; International Journal of Economics and Finance; Vol. 5, No. 8; 2013 Retrieved on April 23 2016, from URL: http://dx.doi.org/10.5539/ijef.v5n8p74.
Craft, J. & Bimberg, L. (1980). Human resources accounting: Perspective and prospects management. A book of readings. Harold Knoontz and Cyril O. Daniel. McGraw Hill, USA.
Das-Gupta, N. (1978) Human resource accounting; New Delhi, Sultan Chand & Sons.
Dobija, M. (1998). How to place human resources into the balance sheet. Journal ofHumanResource Costing and Accounting, 3(1), 83–92. http://dx.doi.org/10.1108/eb029044.
Dumay, J., & Lu, J. (2010). Disclosing improvements in human capital: Comparing results to the rhetoric. Journal of human resource costing & accounting, 14(1),70–97.http://dx.doi.org/10.1108/14013381011039807.
Ezeagba, C. E. (2013). The need for inclusion of human resources accounting in the balances heet. African Research Review, an International Multidisciplinary Journal, Ethiopia. Vol. 8(2) serial No. 33.
Flamholtz, E. G. (1999). Current issues, recent advancements, and future directions in human resource accounting. Journal of human resource costing and accounting, 4(1), 11-20.
International Accounting Standards Board. (2009). Retrieved on April 28, 2016. From www. iasb.org.
Flamholtz, E. G., Bullen, M. L., & Hua, W. (2003). Measuring the ROI of management development: An application of the stochastic rewards valuation model. Journal of Human Resource Costing and Accounting, 7(1–2), 21–40. http://dx.doi.org/10.1108/eb029077.
Flamholtz, E. G. (1971). A model for human resource valuation: A stochastic process with service rewards. The Accounting Review, 253–67.
Flamholtz, E. G. (1987). Human resource accounting: Measuring positional replacement costs human resource management, 8–16. http://dx.doi.org/10.1002/hrm.3930120103.
Flamholtz, E. G. (1999). Human resource accounting: Advances, concepts, method sand applications. Boston, MA: Kluwer Academic Publishers. http://dx.doi.org/10.1007/978-1-4615-6399-0.
Foong, K., Yorston, R., & Gratton, L. (2003). Human capital measurement and performance: a British perspective. Retrieved from http://www.accountingforpeople.gov.uk.
Friedman, A. & Lev, B. (1974), “A Surrogate measure of the Firm’s investment in human resources.” Journal of Accounting Research, No. 12, pp. 235-250.
Gogo, S. F. (1987). Accounting for human resources; The Nigerian Accountant; (July/Sept) Vol. 20 No3.
Gupta, D. K. (1991), “Human resource accounting in India: A perspective.”Administrative Staff College of India Journal of Management, Vol. 20, No. 1, pp. 9-10.
Jasrotia, P. (2004). The need for human resource accounting, Retrieved on April 14,2016fromhttp://www.itpeopleindia.com/20021216/cover.shtml.
Johanson, U., & Mabon, H. (1998). The personnel economics institute after ten years: What has been achieved and where we are we going? Journal of Human Resource Costing and Accounting, 3(2), 65–76. http://dx.doi.org/10.1108/eb029049.
Johansson, J. (2007). Sell-side analysts’ creation of value key roles and relational capital.
Journal of HRCA: Human Resource Costing and Accounting, 11(1), 30–52. http://dx.doi.org/10.1108/14013380710746393.
Kaplan, R. & Norton, D. (1996). Using balance score card as a strategic management system Harvard business Review Journal, February, Pp 3- 13.
Lau, A. H. & Lau, H. S. (1978), “Some proposed approaches for writing off capitalized Human Resource Assets”. Journal of Accounting Research, No.16, pp. 80-102.
Lawler, E. E. (2009). Make human capital a source of competitive advantage. Organizational Dynamics, 38(1), 1–7. http://dx.doi.org/10.1016/j.orgdyn.2008.10.007.
Lev, B. (2001). Intangibles: Management, measurement and reporting. Brookings Institution Press.
Lev, B., & Schwartz, A. (1971). On the use of the economic concept of human capital in financial statements. Accounting Review, 103–112.
Mahmoodi, P., Babae, F. & Mohamade, J.(2013) Human resources accounting: from theory to practice. European online journal of Natural and social science Europeans, Vol. 2No.3(s) Available at www.eruopean.science.com retrieved on May 15, 2016.
Micah, L. C., Ofurum, O. O. & Ihendinhu, J.U. ( 2012) Firms financial performance and human resources accounting disclosure in Nigeria; International Journal of Business and Management; Vol. 7 No. 14 Available at www.ccsenet.org/ijbm Assessed on 12/4/2016.
Newman, B. H. (1999). Accounting recognition of human capital assets. New York: Pace University Press.
Okwy P. O. & Christopher C. O. (2010). Human capital accounting and its relevance to stock investment Decisions in Nigeria. European Journal of Economics, Finance and Administrative Sciences, 21, 64-76.
Oluwatoyin, A. S. (2014) Human resources and accounting and disclosure in financial statement: literature Review. Research Journal of Finance and Accounting, Vol.5No 22 Available at www.iiste.org. Retrieved on May 10, 2016.
Rahaman, M., Hossain, A. & Akter, T. 2013). Problem with human resource accounting and possible solution. Research Journal of Finance and accounting; available atwww.iiste.org retrieved on June 15, 2015.
Ratti, M. (2012). An Analytical study of human resource accounting practices – An Indian experience. Integral Review – Journal of Management, Vol.5 No 2.pp 37-45 Available at http// www.integraluniversity.ac.in/net/journals. Retrieved on March, 12, 2016.
Roslender, R. (2004). The prospects for satisfactorily measuring and reporting intangibles: Time to embrace a new model of accounting? Journal of Human Resource Costing and Accounting, 13(4), 338–359. http://dx.doi.org/10.1108/14013381011010169.
Roslender, R., & Stevenson, J. (2009). Accounting for people: A real step forward or more a case of wishing and hoping? Critical perspectives on accounting, 20(7), 55–69. http://dx.doi.org/10.1016/j.cpa.2007.02.003.
Stanko, B. B, Zeller, T. & Melena, M. F. (2014). Human asset accounting: moving forward; Journal of Business and Economics Research- Second quarter, 2014 Vol. 12, No. 2 Pp 93-104.
Verma, S., & Dewe, P. (2008). Valuing human resources: Perceptions and practices in UK Organizations. Journal of human resource costing and accounting12 (2), 102–123. http://dx.doi.org/10.1108/14013380810889547.
Wright, R. (1970) “Managing man as capital assets” Personal journal. Available atwww.ijste.org. Retrieved on April 15, 2015.
Youndt, M. A., & Snell, S. (2004). Human resource configurations, intellectual capital and organizational performance. Journal of Management Issues, 16(3), 337–60.