CONCEPT OF HR ACCOUNTING

HR ACCOUNTING IS AN ATTEMPT TO IDENTIFY

AND RECORD INVESTMENT MADE IN THE
HUMAN RESOURCES
ITS AN INFORMATION SYSTEM REPORTING THE
COST AND VALUE OF THE HUMAN FACTOR TO
THE ORGANIZATION
“THE PROCESS OF IDENTIFYING AND
MEASURING DATA ABOUT HUMAN RESOURCES
AND COMMUNICATING INFORMATION TO
INTERESTED PARTIES.”
THANKYOU
IMPORTANCE OF HRA
IT HELPS IN DECISION MAKING IN THE
FOLLOWING MATTERS:-
EMPLOYMENT ,LOCATING AND UTILIZATION OF
HUMAN RESOURCES
TRANSFER ,PROMOTIONS ,TRAINING AND
RETRENCHMENT OF HUMAN RESOURCES
IDENTIFYING THE CAUSES FOR HIGH TURNOVER
AT VARIOUS LEVLS AND TAKING PREVENTIVE
MEASURES.
IMPORTANCE OF HRA
LOCATING THE REAL CAUSE OF LOW RETURN
ON INVESTMENT .
IT HELPS INDIVISUALS EMPLOYEES IN
IMPROVING.
OBJECTIVES OF HR ACCOUNTING
PROPER MANAGEMENT OF HUMAN RESOURCES
IMPROVEMENT OF HUMAN RESOURCES
DEPICTING THE TRUE VALUE OF THE
ORGANIZATION
PROVIDES QUANTITATIVE INFORMATION ON
HUMAN RESOURCES WHICH HELPS THE MANGERS
AND INVESTORS IN MAKING DECISIONS.
HRA COMMUNICATES THE WORTH OF HUMAN
RESOURCES TO THE ORGANIZATION AND TO THE
PUBLIC.
HUMAN RESOURCE
ACCOUNTING
CHARACTERISTICS OF HR
IT’S A SYSTEM OF ACCOUNTING IN WHICH
IDENTIFICATION OF HUMAN RESOURCES IS MADE.
INVESTMENT MADE IN HUMAN RESOURCES IS
RECORDED.
MEASUREMENTS OF COSTS AND VALUES ARE MADE.
CHANGES OCCURING IN HUMAN RESOURCES OVER A
PERIOD O TIME ARE RECORDED.
COMMUNICATES INFORMATION THROUGH
FINANCIAL STATEMENTS TO INTERESTED PARTIES.
THE ASPECTS OF HRA

VALUATION OF HUMAN RESOURCE

RECORDING THE VALUATION IN THE BOOKS OF
ACCOUNTS
PRESENTING THE INFORMATION IN THE
FINANCIAL STATEMENTS OF COMMUNICATION.
HRA IN INDIA

IN VIEW OF GROWING IMPORTANCE OF HRA

MANY COMPANIES IN INDIA VOLUNTARILY
GIVING INFORMATION ABOUT THEIR HUMAN
RESOURCES LIKE BHEL,SAIL,MMTC,NTPC,ONGC.
ASSUMPTION UNDERLYING HRA
PEOPLE ARE VALUABLE ORGANISATIONAL
RESOURCES CAPABLE OF PROVIDING PRESENT
AND FUTURE SERVICES TO THE ORGANIZATION
AND SUCH FUTURE SERVICES HAVE ECONOMIC
VALUE TO THE ORGANIZATION AND CAN BE
MEASURED.
THE INFORMATION RELATING TO THE HUMAN
RESOURCE WOULD FACILITATE VARIOUS
MANAGEMENT DECISIONS ON ACQUISITION,
COMPENSATION,TRAINING AND DEVELOPMENT.
METHODS OF HRA
HISTORICAL COST METHOD:-ACTUAL COST
INCURRED FOR RECRUITING ,HIRING,TRAINING
AND DEVELOPING THE HUMAN RESOURCES OF
THE ORGANIZATION ARE CAPITALIZED AND
AMORTIZED OVER THE EXPECTED USEFUL LIFE OF
THE HUMAN RESOURCES.
REPLACEMENT COST METHOD:-THIS IS MEASURE
OF THE COST TO REPLACE A FIRM’S EXISTING
HUMAN RESOURCES.THIS METHOD HAS THE
ADVANTAGES OF ADJUSTING THE HUMAN VALUE
OF PRICE TRENDS IN THE ECONOMY.
METHODS OF HRA
OPPORTUNITY COST METHOD:-IN THIS METHOD,THE
HUMAN RESOURCE OF AN ORGANIZATION HAS TO BE
VALUED ON THE BASIS OF THE ECONOMIST’S CONCEPT OF
OPPORTUNITY COST WHICH IS VALUE OF BENEFIT
FOREGONE BY PUTTING IT TO PRESENT USE.
PRESENT VALUE OF FUTURE EARNINGS METHOD:-IT
RECOGNISES AN INDIVISUAL’S EXPECTED ECONOMIC VALUE
TO THE ENTERPRISE DURING ITS REMAINING SERVICE
PERIOD .AN ESTIMATE ABOUT THE FUTURE EARNING IS
MADE,AND THESE EARNINGSRELATE TO THE PERIOD WHICH
EXTENTS TO THE DATE OF RETIREMENT OF THE
EMPLOYEES.SUCH EARNINGS ARE DISCOUNTED BY AN
APPROPRIATE RANGE TO GET THE PRESENT VALUE.
NEED FOR HRA

HRA SYSTEMS CAN BE PUT TO USE FOR TAKING A

VARIETY OF MANAGERIAL DECISIONS
ORGANIZATIONS CAN ACTUALLY FIND OUT HOW
MUCH THEY CAN EARN FROM AN INDIVISUAL HRA
REFLECTS THE EXTENT TO WHICH ORGANIZATION
CONTRIBUTES TO SOCIETY’S HUMAN CAPITAL BY
INVESTING IN ITS DEVELOPMENT.
IT PROVIDES A SOUND AND EFFECTIVE BASIS OF
HUMAN ASSET CONTROL HELPS TO KNOW
WHETHER THE ASSET IS APPRECIATED,DEPLETED OR
CONSERVED.
APPROACHES TO HRA
THE AMERICAN ACCOUNTING ASSOCIATION
COMMITTEE HAS DEFINED HRA IS THE PROCESS
OF IDENTIFYING AND MEASURING DATA ABOUT
HUMAN RESOURCES AND COMMUNICATING
THIS INFORMATION TO INTERESTED PARTIES TO
FACILITATE EFFECTIVE MANAGEMENT WITHIN
THE ORGANIZATION.