Professional Documents
Culture Documents
Human Resources Accounting (HRA) is that branch of managerial accounting, which involves the application of economic and accounting concepts to the area of personnel management. It is the process of recognizing, measuring and communicating useful information relating to human resources. The primary role of accounting is to provide an effective measurement and reporting system for decision-making.
Davidson and Weil " It is the process of measuring and reporting the human dynamics of an organization. It is the assessment of the condition of human resources within an organization and the measurement of the change in the condition through time". HRA is the systematic recording of the transaction relating the value of Human resources. It is the measurement of cost and value of people for the organization. Human resource accounting comprises the following 3 aspects. Evaluation of Human resources. Recording the valuation in the books of accounts Presenting the information in the financial statements for communication to the interested parties.
Human resource accounting comprises the following 3 aspects. Evaluation of Human resources. Recording the valuation in the books of accounts Presenting the information in the financial statements for communication to the interested parties
SIGNIFICANCE OF HRA Formulating policies and programs for the development of human resources Decision regarding cost reduction Programmes. Training and development. Recruitment and selection. Manpower planning and control.
OBJECTIVES HRA helps in determining the return on investment on human resources. It helps in knowing whether the human resources have been properly utilized or not. It provides quantitative information on human resources, which will help the managers as well as investors in making decision. Another object of HRA is to communicate the work of human resources to the Organization and the society at large.