HUman resource accounting view

1. Few Questions???
What is the value of human resource in the country
today??
What is the true position of the human resource in the
country or any industry??

2. UNITED
STATES
INDIA
AUSTRALIA
GERMANY
CHINA
CANADA
PORTUGAL
GREECE
ITALY

3. Human Resource Accounting
 Definition by M.N.Baker: It is an accounting profession
to quantify cost and Value of employee employing in the
organization.
 It is the process of identifying Investments made by
the organization in the Human Resource Assets.
 Human Resource Accounting is the process of
assigning, budgeting, and reporting the cost of
human resources incurred in an organization,
including wages and salaries and training expenses.

4. CONCEPT
INVESTMENT
IN HUMAN
RESOURCES
Expenditure incurred
on creating, increasing
and updating human
resources
VALUE OF
HUMAN
RESOURCES
YIELD GENERATED IN
FORM OF HIGHER
PRODUCTIVITY AND
HIGHER INCOME/PROFIT
IN THe ORGANIZATION

5. THEORY OF HUMAN RESOURCE ACCOUNTING
BASIC
PREMISES
• Valuable
resource
• Management
OBJECTIVES
• Decision
making
• Efficiency
SIGNIFANCE
• Designing
Training
Module
• Manpower
Planning
• Motivation
and Reward
of employees

6. Types of Cost

7. RECAP
• Human resource accounting is an attempt to
identify and report investment made in
resources of the organization that are not
presently accounted for under conventional
accounting practice "(woodruff).
• Prof. Sidney Davidson defines human resource
accounting as a “term used to describe a variety
of proposals that seek to report and emphasize
the importance of human resourcesKnowledgeable, trained and loyal employees-in
a company's earnings process and total assets‟.

8. Approach
HR COST
ACCOUNTING
HR VALUE
ACCOUNTING
• INTRODUCTION COST,
TRAINING AND DEVEOPMENT
COST, OPPORTUNITY COST,
PROMOTIONAL COST, ETC.
• VALUE OF INVESTMENTS MADE
BY THE ORGANIZATION.
• DIFFERENCE IN PRESENT AND
FUTURE EARNINGS OF THE
FIRM.
• BASED ON USE OF MODELS LIKE
LEV AND SHWARTZ, ETC.

9. FEW EXAMPLE – Cost Part

11. Value Part
Based on Lev and Schwartz model
Calculates future value of employees taking
into consideration their current earnings
and age factor in mind

13. QUESTION COMES OF CHECK??
HR AUDIT

14. AT LAST THE PROCESS,

15. ESSENCE

16. EXAMPLE

17. QUOTE’S
Employees are the most valuable resources of comparison in the services
(software, Banking, Management Consultancy, etc) sectors. Like all other
resources the company the employees possess value because of providing future
services”