Human Resource Accounting, Part I

Pyle, William C.

doi:10.2469/faj.v26.n5.69

Cited by 21 publications

(12 citation statements)

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“…In the early 197Os, a second attempt was made to translate employee behavior into a dollar metric. Human resource accounting (HRA) was advocated as a way of enabling firms to incorporate into their financial reports reasonably accurate estimates of the current value of the human assets of an enterprise (Flamholtz, 1974;Likert, 1973;Pyle, 1970).…”

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“…These ranged from the philosophical to the practical to the methodological. For example, Rohan (1972) criticized equating an investment in people with their competence, Rhode and Lawler (1973) argued that human resources do not qualify as assets because they are not normally bought and sold, and Pyle (1970) noted that there was great dirsculty in identifying that portion of a return on investment that was attributable to human factors because productivity gains based upon normal technological improvements can easily mask deterioration in an employee's performance.…”

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confidence: 99%

“…Whereas the financial community would not accept measurement techniques that were unique to human resources (Robinson, 1973), HRA was resisted by managers because it was perceived to limit their freedom of action (Rhode & Lawler, 1973). This latter finding in particular undercut the primary assumption of HRA, namely, that managers want sophisticated and systematically collected information regarding their human resources in order to improve their business decisions (Pyle, 1970). Moreover, research showed that managers were prone to misusing accounting systems by distorting inputs in order to get outputs that would make them look effective (Cammann, 1974).…”

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The Futility of Utility Analysis

Latham

Whyte

1994

Personnel Psychology

116

154

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In a study involving 143 experienced managers, utility analysis was found to influence managerial decision making, but not in the way intended by advocates of this technique. Utility analysis reduced the support of managers for implementing a valid selection procedure, even though the analysis indicated that the net benefits from the new procedure were substantial. In light of these findings, industrial/organizational psychologists are advised to reconsider their assumptions regarding the information managers use when managers make human resource policy decisions.

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The Futility of Utility Analysis

Latham

Whyte

1994

Personnel Psychology

116

154

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“…Pyle () and Likert and Pyle () proposed a method of valuing human capital based on the application of historical or replacement (Likert & Pyle, ) cost. Under this approach, an organization capitalizes, records, and treats as assets, employee costs that are expected to result in a future organizational benefit, including hiring and training costs.…”

Section: Human Capital As An Accountable Assetmentioning

confidence: 99%

“…Bassi and Van Buren (1999) extended this approach even further as a measure of investment in training and development, as derived by the average hours and total expense invested . Pyle (1970) and Likert and Pyle (1971) proposed a method of valuing human capital based on the application of historical or replacement (Likert & Pyle, 1971) cost. Under this approach, an organization capitalizes, records, and treats as assets, employee costs that are expected to result in a future organizational benefit, including hiring and training costs.…”

Section: Human Capital As An Accountable Assetmentioning

confidence: 99%

Human Capital: A Strategic Asset Whose Time Has Come to Be Recognized on Organizations' Financial Statements

Sollosy¹,

McInerney²,

Braun³

2016

J. Corp. Acct. Fin

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This article examines the issue of how organizations value human capital—are they treated as the intellectual resource within the asset side of the ledger, or are they an expense that drains the company of cash and risks their competitive advantage? The article will focus on the idea that the value of the human capital assets should be measure and considered part of the organizations market value. The exploration of knowledge‐based economies has strengthened the argument for setting value to those producing creative and innovative processes within the organization. Central to this article is the belief that human capital is an accountable asset that must be valued on corporate financial statements as Infosys has adopted since 2008. While some would argue that financial value cannot be attached to labor, this argument does not seem to be supported in the knowledge‐based economy. If an organization's most valuable asset is its people, then the argument must be broached that accounting standards (such as the Financial Accounting Standards Board [FASB] and generally accepted accounting principles [GAAP]) should keep current with the 21st century. If a true comparison of organizations takes place, can that comparison ignore its human capital? © 2016 Wiley Periodicals, Inc.

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The effect of accounting for high performing employee services as a right of use asset on the balance sheet on nonprofessional investors judgments

Ampofo

Barkhi

Nketia

2023

J Corp Accounting Finance

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We examine whether accounting for high performing employee services as a right of use (ROU) asset and related liability on the balance sheet provide decision‐useful financial statement information to nonprofessional investors (NPIs). We compare accounting for the right to use employees services as an asset on‐balance‐sheet (ONBS) and off‐balance‐sheet (OFFBS) to examine the extent to which a ROU asset and related liability provides NPIs with decision‐useful information in assessing investment opportunity and likelihood to invest in a company's stock. We analyze one hundred and fifty‐five usable responses of which 84 are in OFFBS control condition and 71 are in ONBS treatment condition. We find that accounting for high performing employees services as a ROU asset ONBS or OFFBS provides decision‐useful information to NPIs that is not statistically different. Further analysis indicates that accounting for high performing employees as a ROU intangible asset presented ONBS, measured at fair value, or amortized cost with enhanced disaggregation and roll forward disclosures provide decision‐useful information to NPIs. The likelihood to invest in a company's stock significantly increases if the ROU asset is measured at fair value with changes recorded in net income. Results have economic and practical implications for investors, standard‐setters, and researchers.

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Human Resource Accounting, Part I

Cited by 21 publications

References 0 publications

The Futility of Utility Analysis

The Futility of Utility Analysis

Human Capital: A Strategic Asset Whose Time Has Come to Be Recognized on Organizations' Financial Statements

The effect of accounting for high performing employee services as a right of use asset on the balance sheet on nonprofessional investors judgments

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