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Human Resource Accounting (hra)

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Human Resource Accounting (HRA) is a new branch of accounting. It follows the traditional concept that all expenditure on human capital formation is taken as a charge against the revenue of the period as it does not create any physical asset. Modern view is that cost incurred on any asset as human resources need to be capitalized as it provides benefits measureable in monetary terms. Measurement of cost and value of the people to organizations is highly important, costs incurred in recruitment, selection, hiring, training and development of employees along with there economic values are very much relevant for Human Resource Accounting. American Accounting society on HRA defines HRA as follows:

“It is the process of identifying, measuring data about human resources and communicating this information to interested parties”. HRA is the measurement and quantification of human organizational inputs like recruiting, training, experience and communications. It is the art of valuing, recording and presenting the work of all human resources in accounts of an organization. It is an information system towards the changes in human resources of an organization.

Like any audit, the Human Resource Audit is also a systematic formal process, which is designed to examine the strategies, policies, procedures, documentation, structure, systems and practices with respect to the organization’s human resource management. It systematically and scientifically assesses the strengths, limitations, and developmental needs of the existing human resources from the larger point of view of enhancing organizational performance.

Human Resource Accounting (HRA) is a new branch of accounting. It follows the traditional concept that all expenditure on human capital formation is taken as a charge against the revenue of the period as it does not create any physical asset. Modern view is that cost incurred on any asset as human resources need to be capitalized as it provides benefits measureable in monetary terms. Measurement of cost and value of the people to organizations is highly important, costs incurred in recruitment, selection, hiring, training and development of employees along with there economic values are very much relevant for Human Resource Accounting. American Accounting society on HRA defines HRA as follows: It is the art of valuing, recording and presenting the work of all human resources in accounts of an organization. relevant to a great variety of decisions made by external and internal users. Accounting for human asset constitutes an explicit recognition of the premise that people are valuable organizational resources and an integral part of a mix of resources. This study will be helpful for the different users of accounting information for their day to day decision making.

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Human Resource Accounting (HRA). (2019, January 03). GradesFixer. Retrieved August 17, 2022, from https://gradesfixer.com/free-essay-examples/human-resource-accounting-hra/
“Human Resource Accounting (HRA).” GradesFixer, 03 Jan. 2019, gradesfixer.com/free-essay-examples/human-resource-accounting-hra/
Human Resource Accounting (HRA). [online]. Available at: <https://gradesfixer.com/free-essay-examples/human-resource-accounting-hra/> [Accessed 17 Aug. 2022].
Human Resource Accounting (HRA) [Internet]. GradesFixer. 2019 Jan 03 [cited 2022 Aug 17]. Available from: https://gradesfixer.com/free-essay-examples/human-resource-accounting-hra/
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