International Journal of Management, IT and Engineering
Year : 2017, Volume : 7, Issue : 3
First page : ( 162) Last page : ( 172)
Online ISSN : 2249-0558.

Human Resources Accounting: The Game Changer

Khurshid Rizwana

The business school, University of Kashmir

Online published on 11 October, 2019.

Abstract

The productive utilization of human resources plays a pivotal role in an organization towards the achievement of organizational objectives and goals. Human resources of an organization makes it sure that there exists a symbiosis between the physical resources of an organization and the financial resources it possesses. Conventionally, financial assets are recorded in the books of accounts as per the generally accepted accounting Principles, but the people which are the most important assets of an organization are yet to appear in the financial statements of organization. With the accelerated growth in this era of science and technology, the value of human capital is increasing gradually, and hence becomes imperative for the organizations to reflect the investment made in human resources. The skills, creativity, ability of human resource cannot be replaced by machines because at all levels and areas of business human efficiency is required with machine efficiency. Organization must learn to recognize and appreciate the value of their talented employees. The success or failure of an organization depends on their employee's qualification and performance. The evaluation and assessment of human resource is not done properly because the organizations considers the salaries and wages, actually an investment in the improvement and qualification of the employees, and not as an investment in the most important and valuable asset and resource of the organization. Human resource accounting aims at providing information pertaining to the evaluation of human capital because it is necessary that some method of quantifying the net worth, the motivation and the skills possessed by employees should be estimated, recorded in the books of accounts operated and disclosed in the financial statements because HRA represents a new way of thinking about people as assets.

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Keywords

Human assets, human capital, human resource Accounting.

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