Hi cleven,
Human resources accounting is the process of measuring and reporting the human dynamics of an org. basically it is an information system that tells the mgt. What changes overtime are occurring to the human resources of the business.
It is to comprise the following three aspects.
1. evaluation of human resources
2. Recording the valuation in the books of an account.
3. Presenting the in the financial system for the communication to the interested party.
Need for hr accounting.
1. Exposure of complete picture.
2. Effective control.
3. information to other.
4. information on efficiency of hr.
5. indicator of prospective profit.
6. developing employee behaviors.
7. information in making comparative analysis.
8. information in making decisions.
9. determining profitability and productivity.
10. information help in efficient utilization of Hr.
hr accounting also culminate in the preparation of two statements. They are
1. Profit and loss account
2. the balance sheet
Both are known as generally accepted accounting principles.(GAAP)
Now a day “cost base hr accounting” are mostly using in every org. it involve computation of hr cost by following methods.
1. historical cost approach.
2. Replacement cost approach.
3. opportunity cost approach
here I refer some various hr accounting model which are using in org.
1. Economic model
- it is calculated estimated salary, wages.
2. Lev and Schwartz model
- it is calculated estimated hr value
2. Flamholtz normative economic model.
- it is measuring an individual employee’ value to an org..
Indian companies have realized the importance of hr accounting.BHEL,SAIL,ACC ltd.,Hindustan lever ltd. TELCO ltd etc.adopted various HR model.
Bashir