0 évaluation0% ont trouvé ce document utile (0 vote)
121 vues15 pages
Human resource is now purely a non-financial asset that finds so far no place in the balance sheet. The size and constituent of balance sheet totally depends upon the effort and the quality of human resource. A method has to be devised to convert this non financial asset in financial terms.
Human resource is now purely a non-financial asset that finds so far no place in the balance sheet. The size and constituent of balance sheet totally depends upon the effort and the quality of human resource. A method has to be devised to convert this non financial asset in financial terms.
Droits d'auteur :
Attribution Non-Commercial (BY-NC)
Formats disponibles
Téléchargez comme PPT ou lisez en ligne sur Scribd
Human resource is now purely a non-financial asset that finds so far no place in the balance sheet. The size and constituent of balance sheet totally depends upon the effort and the quality of human resource. A method has to be devised to convert this non financial asset in financial terms.
Droits d'auteur :
Attribution Non-Commercial (BY-NC)
Formats disponibles
Téléchargez comme PPT ou lisez en ligne sur Scribd
The human resource is now purely a non-financial
asset that finds so far no place in the balance sheet. The size and constituent of balance sheet totally depends upon the effort and the quality of human resource. To have more clarity and transparency, on the strength of the organization reflected in the balance sheet, it is required that a method has to be devised to convert this non financial asset in financial terms. BALANCE SHEET AND H.R. The balance sheet normally contains two items, namely ASSETS and LIABILITIES So, far there is no place for HUMAN RESOURCES in the balance sheet WHY TO TAKE H.R. AS ASSET? Assets column shows unexpired assets which can be used for several no. of years Human resources are also unexpired assets which can be used over a no. of years Presently the financial accounting system shows the expenditure incurred in compensation, training and development, workshops and other knowledge improving activities as operating and establishment expenditure and accounted for the same year. Hence it is felt that the mention of investment made in the qualified personals have to be quantified in financial terms to have more meaningful transparent balance sheet TECHNIQUES OF H.R VALUATION Various techniques have been developed to covert this qualitative aspect quantitative terms HISTORICAL VALUE METHOD This method was proposed by BRUMMENT to measure an organization's investment in human resources. The human resource cost are current sacrifice for obtaining future benefits and therefore be treated as asset. It involve the capitalization of all cost of recruitment, selection, training, development and all other initial cost and treat them as asset. ECONOMIC VALUE METHOD As per this method, the remuneration to be paid to an employee during his employment be estimated and discounted by an appropriate amount to arrive at a estimated present value. DISCOUNTED SALARY AND WAGES METHOD
The method suggests estimation of future
earnings up to the time they retire and then arriving at the present value by discounting the estimated value by cost of capital. Under this method, salaries are used as the base for valuation of human resources The demerit here is that it is assumed that the employee remains in the same position till he retires. So the error is that employees are not paid in relation to their value to the organization. REPLACEMENT COST METHOD
IRC ( individual replacement cost)
PRC (positional replacement cost)
OPPORTUNITY COST METHOD This method advocates computation of monitory valuation of people to most promising activity and thereby to assess the key employee through competitive bidding among investment centre and the bid amount is the value of the employee. The demerit of this method is that it suggest that the employees that can be hired easily have no value but that are scarce have a value that is not true CONCLUSION
The basic objective of an organization is to
maximize the business, project, owner’s wealth well being of the society. In order to achieve the above goals, it is required for an organization to continuously enhance the knowledge, skills and competence of it’s human resources Itis required to focus in depth on this important issue and formulate a logical methodology for reflecting the human strength in the balance sheet. It can then only give a true picture of the organization. THANK YOU