Question

Write a tetailed note on accounting for humen resources

Answer 1

Human resources are considered as important assets and are different from the physical assets. Physi­cal assets do not have feelings and emotions, whereas human assets are subjected to various types of feelings and emotions. In the same way, unlike physical assets human assets never gets depreciated.

Therefore, the valuations of human resources along with other assets are also required in order to find out the total cost of an organization. In 1960s, Rensis Likert along with other social researchers made an attempt to define the concept of human resource accounting (HRA).

1. The American Association of Accountants (AAA) defines HRA as follows: ‘HRA is a process of identifying and measuring data about human resources and communicating this information to interested parties’.

2. Flamhoitz defines HRA as ‘accounting for people as an organizational resource. It involves mea­suring the costs incurred by organizations to recruit, select, hire, train, and develop human assets. It also involves measuring the economic value of people to the organization’.

3. According to Stephen Knauf, ‘ HRA is the measurement and quantification of human organiza­tional inputs such as recruiting, training, experience and commitment’.

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Answer 2

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Human resources are considered as important assets and are different from the physical assets. Physi­cal assets do not have feelings and emotions, whereas human assets are subjected to various types of feelings and emotions. In the same way, unlike physical assets human assets never gets depreciated.

Therefore, the valuations of human resources along with other assets are also required in order to find out the total cost of an organization. In 1960s, Rensis Likert along with other social researchers made an attempt to define the concept of human resource accounting (HRA).

1. The American Association of Accountants (AAA) defines HRA as follows: ‘HRA is a process of identifying and measuring data about human resources and communicating this information to interested parties’.

2. Flamhoitz defines HRA as ‘accounting for people as an organizational resource. It involves mea­suring the costs incurred by organizations to recruit, select, hire, train, and develop human assets. It also involves measuring the economic value of people to the organization’.

3. According to Stephen Knauf, ‘ HRA is the measurement and quantification of human organiza­tional inputs such as recruiting, training, experience and commitment’.