Recognition, Measurement and Accounting Treatment of Human Resource Accounting

Abstract

Human Resource Accounting (HRA) involves accounting for costs related to human resources as assets as opposed to traditional accounting. Since the beginning of globalization of business and services, human elements are becoming more important input for the success of every organization. The strong growth of international financial reporting standards (IFRS) encourages the consideration of alternative measurement and reporting standards and lends support to the possibility that future financial reports will include non-traditional measurements such as the value of human resources using HRA methods. It helps the management to frame policies for human resources of their organizations. HRA is a process of identifying and measuring data about human resources. It will help to charge human resource investment over a period of time. It is not a new concept in the arena of business world. Economists consider human capital as a production factor, and they explore different ways of measuring its investment. Now accountants are recognizing human resource investment as an asset. This study is build upon Recognition, Measurement and Accounting Treatment of Human Resource Accounting in different organizations.