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Human Resource Accounting in Contemporary Financial Reporting: Advocacy for A Best Approach and Regulatory Framework

Henry Ejikeme Udeh

Abstract

The paper reviewed human resource accounting in modern time financial reporting. Human resource accounting evaluates the cost invested in employees towards their recruitment, training, payment of salaries and other benefits and in return knowing their contribution to the organization towards its profitability. There have been a good number of arguments for and against regarding human resources as capital assets of the organization that need to be resolved. In that regard, this research was prompted. The study is an analytical review which examined secondary materials on human resource accounting. The researcher came up with the findings that even though it has been advocated that human asset be valued and capitalized in the statement of financial position, no particular method of human resource valuation has been recommended and no significant regulatory effort has been made to recognize and incorporate human asset in financial reporting. The study therefore recommends that a standard approach in valuing human resources preferably the acquisition cost model be approved and the values derived be incorporated to show the worth of human capital of a firm as a recognized asset of the organization.

Keywords

Human resource accountingfinancial reportingassetscostcapitalization.

References

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