Measuring Employees Value: A Critical Study on Human Resources Accounting in India

Human Resource (HR) is most crucial, very important and sensitive factor used as an input for production. This factor was overlooked earlier for accounting purposes due to the availability of excess and unorganised manpower and relatively low cost. But after liberalization of Indian economy (in 1991) the importance of human resources were recognised. Although a little interest has been shown by professional accountancy bodies, like ICAI, ICSI and ICMAI on Human Resource Accounting (HRA) in Indian the importance is now given on HRA by public sector undertakings that have made pioneering attempts by disclosing Human Resource Values in their published annual reports. Similarly the other private companies are also disclosing the HR values in their financial statements. This paper seeks to present brief description of Concepts of HRA, analyse the disclosure in 5 major companies in India. The study also analyses the difference between the HRV, and to establish the relationship between Profitability and HRV with other predictor values like Net worth, Sales and EPS. By using ANOVA, Tukey post Hoc Test and multiple regression it was found that HRV and Sales are the predictor of Profitability in selected companies in India.