HUMAN CAPITAL ACCOUNTING.

Prof TSN Chary Sir.

K. Gopi Krishna.

Abstract:
21st century is the era of knowledge economy where the modern & innovative organizations success
depends. In the recent /present times of highly complex and turbulent environment with ever increasing
competition across companies, industries as well as the economies all over the world, acquiring, managing,
developing, motivating and retaining the best and the effective talent is a challenging one. It is a known fact
that, the service sector in India is progressing or developing at a faster pace with an important resource
/asset which helps or support an organization to achieve at higher heights and making the companies to
dominate both nationally and internationally through effective as well as innovative HR practices which are
adopted /implemented successfully according to the global environment. Hence, in this direction, an attempt
was made to findout /know the accounting for human capital measurement and disclosure. Similarly to know
whether accounting for human capital is a realty/ a myth fro companies in reporting the human capital data
or information in the balance sheet of the companies financial statements and also to know or findout the
right/effective/correct accounting standard for human capital at the national and international level.
Keywords: Accounting for Human Capital, Measurement, Accounting Standards, Investments, Human
Capital, IT Companies.

* Professor and Dean, Department of Business Management, Telangana University, Nizamabad. He can be
reached at tsnchary@gmail.com.
** Research Scholar, department of Commerce, Telangana University, Nizamabad and Faculty Member,
Department of Commerce & Business Mgmt, Vivekananda Degree & PG College, Karimnagar. He can be
reached at gopikrishnakura@gmail.com.

I INTRODUCTION.
Human capital accounting is on the early stages for the implementation in corporate sector of developed as
well as in under developed countries like India, China, Portugal, Germany, Canada, Greece, United
Kingdom and New Zealand. There is an urgent need to establish the intellectual reporting framework which
provides the guidelines for the valuation of HR value in financial statements but unfortunately until now,
there is no single reliable method available for valuation and measurement of human resources values all
over the world.
Human capital is a driving force for sustainable competitive advantage. Their skills, creativity & ability
cannot be replaced by machines. Human capital consists of employee competence, qualifications, skills,
training & development, knowledge of work procedures, work ethics and values and experience. It is a
known fact that, employees are treated as strategic assets than other assets which are considered as
commodities which are available for sale and purchase in the market for a specific price and only the human
capital has the potential to learn, grow and contribute.
A person has a set of competencies and a value is assigned to each of these competencies. The sum total of it
is the value of an employee and the sum total of the value of all employees is the human capital of the
Organization.