Human Resource Accounting in India: An Overview

Abstract

Human beings are the most valuable resource. Employees are the greatest asset of an organization and the success or failure depends on the skill and the performance of the employees. Almost all the large sized organizations have a separate HRD Department. Human Resource Accounting is a process of identifying and measuring data about humans resource and communicating this information to the interested parties. HRA helps the management in taking managerial decision relating to selection, lay-off, transfers, training, promotion etc. Attempts to account the HR are not new. It was Rensis Likert who initiated research into HR accounting in the sixties and in organizations starting with the Milwanke Braves USA (1963), which was the first organization to experiment with the concept of HRA, by treating its investments in future team development as an asset to be capitalized and amortised over its expected useful life rather than as an expense in the period incurred. The concept of recognizing human being as an asset is an old one in India. Akbar gave importance to the nine jewels (courtiers). The names of freedom fighters like Mahatma Gandhi, Pandit Nehru cannot be forgotten in the history of freedom movement of India but no one made efforts to assign any monetary value to such individuals in the balance sheet of the nation. Indian Companies Act, 1956 does not provide any scope for furnishing any significant information about human resources in financial statement but a growing trend towards the measurement and reporting of human assets, some companies in public and private sector.

Keywords: N.A.

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