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Human Resource Accouting -Issues And Challenges

A human resource accounting transmission: shifting from failure to a future
The Authors
Herman A. Theeke, Management Department, College of Business, Central Michigan University, Mt Pleasant, Michigan, USA
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.

Article Type:
Conceptual paper

Keyword(s):
Human resource management; Accounting history; Financial reporting; Liabilities.

Journal:
Journal of Human Resource Costing & Accounting

Volume:
9

Number:
1

Year:
2005

pp:
40-59

Copyright ©
Emerald Group Publishing Limited

ISSN:
1401-338X

Introduction
Thomas Kuhn (1996) suggests that a group shares a paradigm when they believe in particular models, they share values, they have shared examples, and they share symbolic generalizations (pp. 182-4). Given this definition, the group of scholars and practitioners who advocated accounting for human resources (HR) as assets surely have created a paradigm. Most modern HR practitioners would generally agree that the people in their organization are valuable assets and are as important, if not more important, than the organization's physical and intangible assets. Many in HR agree that these assets should be measured and bemoan the fact that while the value of a physical asset is, and is required to be, reported in the organization's financial statements, no such treatment is required for the organization's human assets. But as Kuhn (1962) suggests, paradigms do shift and change; they do not change...