ISO 9001:2015

DEVELOPMENT OF HUMAN RESOURCE ACCOUNTING IN INDIA

Raghuveer Singh Meena

Our conventional method of accounting omits one amongst the foremost significant information concerning the human capital. The profit and loss account of a corporation only discloses current expenses incurred in respect of employment of labour like wages, salaries and director fees, whereas other assets employed in the organization are shown in the record either in the kind of capital subscribed by shareholders or all fixed assets and current assets but record is silent regarding the worth of human capital employed. The traditional method of accounting ignores attention towards human organization, its skills, loyalty, motivation and capacity of interaction and higher cognitive process. Recently, many Indian companies have started realizing the importance and net worth of the Human Capital employed in their organizations. Human resource is the most precious and valuable asset for any organization and successful utilization of all other resources depends directly or indirectly on the human assets. Hence, now the big corporate houses have started showing detailed accounting of their human resource in their annual reports. ONGC Ltd., Infosys Technologies ltd., HPCL ltd., CCI ltd. are few emerging names within the list. At macro level, human resource means an employee possessed by the summation of the expertise, creativeness, innovativeness, imagination, knowledge, skill and knowledge. Every organization having abundant physical resources with no human resources, may fail, since it requires the proper people in terms of human resources to manage these resources. Hence, human resource is the vital element of a corporation and must not be ignored. Therefore, it's worthy to adopt HRA practices within the corporate sector worldwide. However still many of the Indian companies don't follow the HRA. Therefore it's necessary to pick up certain questions like what are characteristics of HRA, to look at whether HRA is helpful to the management or the other users who make use of HRA, or the way to determine the contribution of Human resource accounting on the financial plan of Indian companies Hence this study is taken to search out the answers of those questions.   

 

Keywords: Human Asset, Profit, Valuation, Labour Productivity, Capital Valuation, Market Position.


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