Human Resource Accounting: Evolution and Challenges

Abstract

It is fact that the 21st century is era of Human demand, countries those have labor quality ruling the world with dominant technology. Countries like china and Japan forerunners in technology advancement, is all result of work force performance. Hence whole world realized that human resource is the real investment into business ventures that should only catch and stick the success waves. It can be said that INFOSYIS, Bharat heavy Electrical Ltd (BHEL), DR.REDDY`S and Steel Authority of India Ltd (SAIL) are ever profit generators because recognized value of quality of labor and ordered peak priority so as company`s yields ripped fruits  with assistance of ripped force (quality employees) and can stand against any business storm and cope up effectively. Human resource accounting is the process of identifying and reporting the investments made in the human resources of any institution that are currently not accounted for in the traditional accounting system. Simply, it is an expansion of the Accounting Principles of organising data to communicate relevant information and of matching the costs and revenues.  Even though, many benefits have contributed by HRA, yet its growth and applicability in various industries has not been encouraging. Because Indian companies act 1956, does not provide any scope for showing any information about human resources in financial statement.