Human Resource Accounting

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Class: M.Com Author: Dr. M.C. Garg Subject: Human Resource Planning and Development Course Code: MC-207-H Vettor: Dr. P.K.Gupta Lesson 9 HUMAN RESOURCE VALUATION AND ACCOUNTING STRUCTURE 9.0 9.1 9.2 9.3 9.4 9.5 Objective Introduction Concept of Human Resource Accounting Objectives of Human Resource Accounting Significance of Human Resource Accounting Human Resource Accounting Models Cost Models Present Value Models 9.5.1. 9.5.2. 9.6 9.7 9.8 9.9 Comparison of HRA Models HRA Models and Human Resource Development Summary Keywords 9.10 Self Assessment Questions 9.11 Suggested Readings 9.0 OBJECTIVES After reading this lesson, you should be able to: a) Define human resource accounting and discuss the objectives and significance of human resource accounting. b) Explain the different human resource accounting models. c) Make a comparison of human resource accounting models. 9.1 INTRODUCTION It is widely recognised that human resources are no lesser important than other productive resources. However the recognition of 1 importance of people in organisations as productive resources by the accountants is a recent origin. It was in 1960’s that behavioural scientists attacked the conventional accounting practice for its failure to value the human resource of the organisation along with other productive resources. They pointed out that the failure of accountants of value human resources was a serious handicap for effective management. As a consequence, valuation of human resources has received widespread recognition. In the course of time a number of accounting models have been developed to value and report human resources of an organisation. In the management terminology this is called as Human Resource Accounting (HRA). Advocates of HRA consider the importance of the human element in organisations and the failure of conventional accounting in
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