What is HRA in HRM?

Human Resource Accounting (HRA) is the process of identifying and reporting investments made in the human resources of an organisation that are presently unaccounted for in the conventional accounting practice. It is an extension of standard accounting principles.

Who invented HRA concept?

Rensis Likert
In 1960s, Rensis Likert along with other social researchers made an attempt to define the concept of human resource accounting (HRA).

What are the approaches to HRA?

Human Resource Accounting (HRA) – Approaches (Cost Approach, Economic Value Approach and Non-Monetary Methods) There are different angles to HRA, regarding components of costs, investment and value related to employees of an organization.

What are the objectives of HRA?

According to Rensis Likert, the objectives of HRA are to: Provide cost value information about acquisition, development, allocation and maintenance of human resources so as to achieve organisational goals in an effective manner. 2. Enable management of the organisation to effectively monitor the use of human resources.

What do you mean by human resource accounting explain any 4 advantages of HRA and also the methods of human resource accounting?

“Human Resource Accounting involves measuring the costs incurred by business firms and other organizations to recruit, select, hire, train and develop human assets. It also involves measuring the economic value of people to the organization”. –

What is human resource accounting purpose?

The main aim of HR Accounting is to generate cost and value information of human resources by measuring and identifying the data about the employees or managers working in an organization.

What are the elements of HRA?

Human resources accounting (HRA) is one of the latest concept adopted by few corporations in our country. Most of the corporations have realised that human resources are their most precious resources….A. Cost Based Models:

  • Capitalisation of Historical Costs:
  • Replacement Costs:
  • Opportunity Cost Model:

What is human resource accounting in India?

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.

What are the three aspects included in HRA?

From the above, it is clear that there are three important aspects of HRA as given below:

  • Valuation of human resources.
  • Recording the value of human resources in the books of accounts.
  • Disclosure of the information in the financial statements of the business.

What are the assumptions of HRA?

Assumptions of the Human Resources Accounting (HRA) Employees are valuable resources of an organization. Information about investment and value of human resources is helpful for making decisions within an organization. The utility of manpower as an organisational resource is dependent upon how it is managed.

Why has the importance of HRA increased in today’s organizations?

(3) Increased Productivity: HRA practice opens the avenue for increasing productivity of human resources. This is possible because valuation in monetary terms is made of human assets and this valuation find a place in financial statements of the organisation. This motivates the employees for putting better efforts.

What is human resource accounting and discuss its benefits?

Human resource accounting helps organisations in properly planning and managing their human resources. It records each and every detail about manpower working with the organisation. It measures the cost and value of human resources as well as determines their strengths and weakness.