Professional Documents
Culture Documents
resource accounting(HRM)
Ku-Jun Lin
Associate Professor
Tam Kang University
1
What is human resource accounting?
2
What is the value of human?
Human is priceless.
Human capital can be counted.
– How do you calculate the value of an
employee in the company?
• Minimum value = The present value of her(his)
salary in the future, by considering the
possibility of early absence.
3
Why human resource accounting?
4
Human capital becomes the most
important asset in the corporation
More service(human intelligence)
oriented company than before
– Higher Tobin’s Q(Price/Equity)
– Higher Return on Assets(ROE)
The importance of capital shifts from
financial capital to intellectual capital
5
Intellectual capital including
– human capital,
– organizational capital
• Relation capital(outside)
• Customer capital(outside)
• Process capital(inside)
• Learning and development capital(inside)
6
Characteristics of Human capital
– Hard to imitate
– Causal ambiguous
– Cannot duplicate in a short time
7
Present accounting system ignores the
importance of human resource value
8
Financial ratios, based on financial
statements, provide little or bias human
capital profitability information, for
example
– ROA: based on hard asset
– Return on Investment(ROI): The “I”
represents the investment on hard assets
– Assets Turnover: Sales/Total “hard ”assets
9
Reasons why GAAP does not allow
human capital investment becomes
assets
– Future benefit uncertainty
– Conservatism
– Ethical issue
10
Managers lack information about the
effectiveness and efficiency of human
resource investment
Lay off decisions
– Does the lost training cost and future
orientation cost be considered?
– Short term, immediate positive impact on
current net income VS effect on long term
profit
– Impacts on employee’s feeling which may
negatively influence company income
11
Investment in human capital decisions
– Where is the beef?
– What is the relationship between human
capital investment and operation result?
– The communication of company human
capital to investors.
12
The Human capital Architecture
14
Human resource factors that may have
influence on operation result
Financial(human resource accounting,
use accounting system to collect data)
Non financial(use questionnaire)
– Personal background, such as age,
gender, education, experiences and
licenses.
– Personal characteristics, such and
personal traits
15
My research summary
17
The Limitation
18
Future development
Q&A
20