Human Resource Accounting: a framework for better Financial Accounting and Reporting

Abstract

Accounting is crossing its boarders since the inception of single and double entry system. The accounting concepts and conventions made a stronger contribution to the field of accounting. However, the conservatism and other principles and concepts of accounting limited the usage and treatment of human resources in right dimension. There were earlier researches with respect to human resources valuation and treatment both from investment and cost perspective. However, still human resource accounting is in infancy due to varied reasons and in one way the present research aimed to rethink and stress the need for further studies in the subject. The present research paper aimed at the treatment of human resources with a true and fair view, like other elements involved in financial accounting and the inclusion of human resources not only from the expenditure perspective but also from the investment point of view is argued to depict the true and fair view of financial accounts and financial reports. Further, it is intended to discuss setting up of an apex body for valuation and treatment of human resources and other concerns which limits the practice of human resource accounting. Finally, it concluded with the future road map for financial accounting to consider it as “Human Resource Financial Accounting”.