Conceptual Framework of Human Resource Accounting: Its Significance, Models and Challenges in Today’s Dynamic World

Abstract

Human resources are regarded as the most precious resources in a business, and the success of the organization is dependent on their proper utilization. Human Resource Accounting is a fruitful endeavor to identify an organization's investment in its human resources. It is defined as the procedure of acquiring and disseminating information on human resources to interested parties. Human resource techniques that are effective in the financial statements of the firm might provide long-term benefits to them. Because human resources power all of the organization's processes, valuing this resource is critical. Despite the growing importance of this concept, accounting organizations in India are showing little attention. There was no standardized model of Human Resource Accounting that organizations could use. There are only a handful companies in India that use HRA procedures. Most of them used the Lev and Schwartz approach to determine the worth of human resources. This study’s objective is to analyze the concept of Human Resource Accounting its importance, valuation methods and issues in today's changing context. The study's major goal is to raise awareness about HRA so that this innovative concept receives proper acknowledgement.