Human Resource Accounting
Human Resource Accounting is similar in principle to the preparation of an accounting statement. Just as financial accounting reflects the costs and value of assets (land, buildings, machinery, etc ). HR accounting also tries to make assessment of the costs and value of the people as organizational resources. The basic purpose of HR accounting is to facilitate the effective and efficient management of human resources as it provides required information about acquiring, developing, evaluating and rewarding human resources. Thus, Human resource accounting is the art of valuing, recording and presenting systematically the work of human resources in the books of accounts of an organization. Thus, it is primarily an information system which informs management about the changes that are taking place in the human resources of an organization.
Definitions of Human Resource Accounting
According to the American Accounting Society Committee on Human Resource Accounting
Human resources accounting is the process of identifying and measuring data about human resources and communicating this information to interested parties.
According to Flamhoitz
HRA is accounting for people as an organisational resource. It involves measuring the costs incurred by organisations to recruit, select, hire, train and develop human assets. It also involves measuring the economic value of people to the organization.
According to Woodruff Jr
Human resource accounting is an attempt to identify and report investments made in human resources of an organisation that are presently not accounted for in conventional accounting practice. Basically it is an information system that tells the management what changes over time are occurring to the human resources of the business.
According to Stephen Knauf
HRA is the measurement and quantification of human organizational in and outs such as recruiting experience and commitment.