Activity no.

2
Accounting for manager

Presentation
on
Human resources
Accounting
Submitted To:- Submitted By:-
Dr. Ankit Gupta Aman rana
{Assistant professor Radha Raman
department of sharma
management ITM }
content:-

 Introduction of HRA
 Defination of HRA
 Basis premises of HRA
Needs or Significance of HRA
Objectives of HRA
Advantages of HRA
Inroduction :-

The quality and calibre of the people

working in an organisation are the real
assets for a firm. An enterprise with
incompetent people will fail sooner or later
but on the other hand competent persons
can take the unit ahead even out of adverse
environment.
 Some important definations of human resource accounting

Davidson and Weil :- “it is the process of measuring and reporting the
human dynamics of an organisation. It is the assessment of the condition of
human resources within an organisation and the measurement of the change
in the condition through time.’’

Geofrrey M.N. Baker :- “ Human resource accounting is the term applied

by the accountancy profession to quantify the cost and value of employees to
their employing organisation.’’
 Basic Premises of Human Resource accounting

The basic premises underlying the theory of human resource accounting are:

 People are valuable resources of an enterprise.

 The usefulness of manpower as an organisational resource is determined by

the way in
which it is managed.

 Information on investment and value of human resource is useful for decision

making in the enterprise.
 Needs or Significance of human resource accounting

The information generated through HRA can be of utmost help for

making decisions in the following areas:-

1. Formulating policies and programmes for the

development of human resources.
2. Decisions regarding cost reduction programmes.
3. Training and development.
4. Recruitment and selection.
5. Manpower planning and control.
 Objectives of human resources accounting
In spite of various objections to the approach of treating expenditure on
human being as an asset still this subject is very important. Its study is
required with the following objectives in mind:-

1) HRA helps in determining the return on investment on human

resources.
2) It helps in knowing whether the human resources have been
properly utilised or not.
3) Another object of HRA is to communicate the worth of human
resources to the organisation and the society at large.
 Advantages of human resource Accounting
Human resource accounting helps in knowing whether human asset is being build
up in the business or not. An executive may show goods results in producing
goods, etc. But he might not have built the human resources people.

1) It will help management in planning and executing personal policies . The

management will be helped in taking decisions regarding transfer, promotion,
training, retirement, of human resources, etc.
2) It can be seen whether the business has made proper investment in human
resources in terms of money or not. If the investment the excessive then efforts
should be made to control it.
3) Human resources accounting will help in improving the efficiency of
employee. The employees come to know of the cost incurred on them and
return given by them in the form of output, etc. It will motivate employees to
increase their worth.