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Article
Publication date: 1 January 1996

GEOFF TURNER

Since accounting for an enterprise's human resources was first discussed more than thirty years ago, it has encountered two main barriers to entry into mainstream accounting

Abstract

Since accounting for an enterprise's human resources was first discussed more than thirty years ago, it has encountered two main barriers to entry into mainstream accounting. These were: 1. that employees do not qualify as assets and 2. an inability to establish a meaningful system of measurement. In the context of current accounting concepts the first of these barriers is discussed establishing the legitimacy of the paradigm. Acceptable methods of measuring the value of assets are examined concluding that the present value, using added value as a base, is most useful for the majority of enterprises. Accepting that human resources are an asset, consideration should also be given to recognising the associated liabilities. The impact of accounting for human resources is examined by reference to a set of published financial statements. With an ever changing accounting environment, the opportunity to recognise human resource assets and liabilities in the financial statements should be taken.

Details

Journal of Human Resource Costing & Accounting, vol. 1 no. 1
Type: Research Article
ISSN: 1401-338X

Article
Publication date: 1 March 1973

D.M.C. Jones

Accounting information is prepared and submitted to interested parties with the aim of influencing their behaviour and decisions. If an accounting system is to provide information…

Abstract

Accounting information is prepared and submitted to interested parties with the aim of influencing their behaviour and decisions. If an accounting system is to provide information which can be used to help interested parties, such as managers, to control the future activities of the organisation and make well‐informed decisions, the system should record in money terms every financial or economic fact which affects the income or financial position of the organisation. The functions of management can be described briefly as forecasting, planning, organising, co‐ordinating and controlling the use of resources with a view to achieving the stated objectives of an undertaking. The resources available to management include physical resources such as plant and machinery, financial resources, patents, trade marks, the reputation the company has with customers and creditors, and the human resources within the organisation. To the extent that an accounting system fails to record and present relevant information on any of these resources it can be regarded as inadequate as a source of information for control and decision‐making.

Details

Management Decision, vol. 11 no. 3
Type: Research Article
ISSN: 0025-1747

Article
Publication date: 1 January 2005

Herman A. Theeke

This paper seeks to present the positions and conclusions of scholars to support a proposition that the asset approach to human resource accounting has failed.

9738

Abstract

Purpose

This paper seeks to present the positions and conclusions of scholars to support a proposition that the asset approach to human resource accounting has failed.

Design/methodology/approach

Reviews the history of human asset accounting.

Findings

The paper offers an alternative “liability approach” to account for and report human resources.

Originality/value

The paper provides an argument and rationale to demonstrate that a liability paradigm would be compatible with normal accounting and reporting procedures.

Details

Journal of Human Resource Costing & Accounting, vol. 9 no. 1
Type: Research Article
ISSN: 1401-338X

Keywords

Article
Publication date: 1 January 1976

P. Trussell and R. Dobbins

Human resource accounting is concerned with the identification and measurement of data relating to the organisation's human resources and the communication of such relevant…

9903

Abstract

Human resource accounting is concerned with the identification and measurement of data relating to the organisation's human resources and the communication of such relevant information to interested parties. Our objectives in this article are firstly to familiarise both financial and non‐financial managers with the techniques of accounting for human resources, and secondly to summarise the advantages and disadvantages of this additional financial reporting activity. The wide range of human resource valuations yielded by different accounting procedures is demonstrated in a research application of human resource valuation to the staff of Liverpool F.C. Ltd.

Details

Managerial Finance, vol. 2 no. 1
Type: Research Article
ISSN: 0307-4358

Article
Publication date: 5 September 2018

Amanze Rajesh Ejiogu and Chibuzo Ejiogu

The purpose of this paper is to develop an understanding of the process through which ideas are translated across disciplines. It does this by focussing on how the idea that…

4021

Abstract

Purpose

The purpose of this paper is to develop an understanding of the process through which ideas are translated across disciplines. It does this by focussing on how the idea that people are corporate assets was translated between the accounting and human resource management (HRM) disciplines.

Design/methodology/approach

This paper is based on the interpretation of a historical case study of the travel of ideas between the accounting and HRM disciplines. Translation is used as an analytical lens as opposed to being the object of the study and is theorised drawing on insights from the Scandinavian Institutionalist School, Skopos theory and linguistic translation techniques.

Findings

Translation by individual translators involved the translator stepping across disciplinary boundaries. However, translation performed by interdisciplinary teams occurs in the “contact zone” between disciplines. In this zone, both disciplines are, at once, source and target. Ideas are translated by editing and fusing them. In both cases, translation is value laden as the motives of the translators determine the translation techniques used. Legitimacy and gravitas of the translator, as well as contextual opportunities, influence the spread of the idea while disciplinary norms limit its ability to become institutionalised. Also, differential application of the same translation rule leads to heterogeneous outcomes.

Originality/value

This is the first accounting translation study to use the theories of the Scandinavian Institutionalist School or indeed combine these with linguistic translation techniques. It is also the first study in accounting which explores the translation of ideas across disciplines.

Details

Accounting, Auditing & Accountability Journal, vol. 31 no. 7
Type: Research Article
ISSN: 0951-3574

Keywords

Article
Publication date: 2 October 2007

Filomena Antunes Brás and Lúcia Lima Rodrigues

This paper aims to analyse two competing approaches to accounting for a firm's investment in staff‐training activities: the accounting and labour economics approach (which argues…

1150

Abstract

Purpose

This paper aims to analyse two competing approaches to accounting for a firm's investment in staff‐training activities: the accounting and labour economics approach (which argues that no asset should be recognized from training activity); and the human resources management approach (which advocates recognition of an asset).

Design/methodology/approach

A case study analysis was conducted in two large Portuguese companies where human capital is said to be a critical factor of firm success. The authors used document analysis and interviews to help understand the training phenomenon from a company's point of view. This meant knowing of motivations, training programme curricula, training practices and expected benefits of training.

Findings

The paper identifies and defines two situations concerning a firm's investment in human capital training: one, where no asset (value) is generated; and the other, where the accounting definition of an asset, requiring value generation, is satisfied.

Research limitations/implications

Case studies possess the strength of specific instance detail and interpretation, and the ostensible weakness of interpretation of a small sample. But such research can provide for a reframing of conceptual perspectives. They can stimulate additional efforts to improve accounting and financial reporting.

Practical implications

A guideline system for firm investment in training was developed. This system allows different accounting treatments of a firm's investment in training activity. It proceeds on the basis of perceptions of whether training activity undertaken by a firm generates, or does not generate, value.

Originality/value

This paper provides a much‐needed case‐based empirical analysis of accounting and human capital arguments, and asset recognition arguments. It clarifies the situations in which an asset should be regarded as being generated by training expenditure.

Details

Journal of Human Resource Costing & Accounting, vol. 11 no. 3
Type: Research Article
ISSN: 1401-338X

Keywords

Article
Publication date: 1 October 1999

George D. Thompson

Perceived increases in the proportion of human capital in the production mix are matched by calls for the development of methods of accounting for human capital. The term…

3734

Abstract

Perceived increases in the proportion of human capital in the production mix are matched by calls for the development of methods of accounting for human capital. The term “capital” is used in a range of academic and professional fields. Cultural capital is a term from sociology, closely related in meaning to human capital and human resources, but providing a unique perspective of its own. This paper suggests that, by reaching outside the traditional economic rationality of the discourse on human resources or human capital, cultural capital provides insights for accounting. In particular, it suggests that a form of human resource accounting based on cultural capital is needed to reflect the plural authority and accountability structures of organizations.

Details

Accounting, Auditing & Accountability Journal, vol. 12 no. 4
Type: Research Article
ISSN: 0951-3574

Keywords

Article
Publication date: 1 November 1996

G.S. Batra

The human resource valuation system cannot be considered to be a complete system of accounting unless it is followed by an equally competent system of auditing. Application or use…

18002

Abstract

The human resource valuation system cannot be considered to be a complete system of accounting unless it is followed by an equally competent system of auditing. Application or use of human resource accounting, therefore, must also be followed by a separate HR audit to ascertain whether or not the performance of the managers has been true and fair in the overall interests of the organization they serve. The application and usefulness of human resource valuation depends on the future efforts and experiments to be made by practising managers, accountants and academicians. It also needs support from the professional bodies and government. In the absence of human resource valuation, the management may not realize the negative effects of certain programmes aimed at improving profits in the short run. Such programmes may result in decreased value of human assets due to a fall in productivity levels, high labour turnover and low morale. Audit of human resources could help in finding out the efficiency of every segment. Human resource audit could enable the appraisal of the performance of various managers. The basic function and management of human resources is also greatly facilitated. Hence human resource valuation and audit activity could be helpful in improving the efficiency of human resources in the changing business scenario.

Details

Managerial Auditing Journal, vol. 11 no. 8
Type: Research Article
ISSN: 0268-6902

Keywords

Article
Publication date: 1 January 1996

STEPHEN MORROW

This paper considers whether the prospective services provided by a football player on behalf of the club holding his registration can be recognised as an accounting asset. The…

2829

Abstract

This paper considers whether the prospective services provided by a football player on behalf of the club holding his registration can be recognised as an accounting asset. The first section of the paper considers the appropriateness of treating these prospective services as intangible assets within the terms of the UK Accounting Standards Board criteria for definition and recognition of assets. In the second section, four valuation methodologies are evaluated using case study data made available by a major Scottish club. Each of the methods evaluated is either currently used in accounting practice by some clubs, or is used in some form in the existing market place for players. The historical cost model involves capitalising players acquired by the club via the transfer market on the balance sheet at their cost of registration. The earnings multiplier model applies a multiplier to a player's earnings to produce a current valuation of that player. The third model involves capitalising players at directors' valuation, while the independent multiple player evaluation model involves obtaining valuations for players from various informed sources, knowledgeable on those particular players. The paper concludes that there are convincing arguments for the conceptualisation of the services provided by football players as accounting assets, and recommends an system of valuation in which players are valued at their realisable value by independent experts.

Details

Journal of Human Resource Costing & Accounting, vol. 1 no. 1
Type: Research Article
ISSN: 1401-338X

Article
Publication date: 1 January 1997

JAN‐ERIK GRÖJER

If we cannot explain goodwill and potential goodwill in asset terms, they do not make sense. A partial explanation can be found in human assets or employee artefacts. A balance…

Abstract

If we cannot explain goodwill and potential goodwill in asset terms, they do not make sense. A partial explanation can be found in human assets or employee artefacts. A balance sheet model including employee artefacts is illustrated, and the consequences on the balance sheet and related financial key ratios are substantial. The inclusion of employee artefacts on the balance sheet (1) seems to make sense, (2) but it is still unclear if the inclusion will make organizations “better.” Even though the development of the balance sheet model is done in accordance with generally accepted accounting principles, it seems to (3) challenge the (elite) social order in organizations.

Details

Journal of Human Resource Costing & Accounting, vol. 2 no. 1
Type: Research Article
ISSN: 1401-338X

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