The Effects of Human Asset Statements on the Investment Decision: An Experiment

Elias, Nabil

doi:10.2307/2489876

Cited by 60 publications

(36 citation statements)

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“…As early as the 1960s, academic debate on human resource accounting and utility analysis attempted to bring HC into the balance sheet (Brummet, Flamholtz & Pyle, 1968;Elias, 1972;Heckmian & Jones, 1967;Johanson, Mårtensson & Skoog, 2001), providing evidence of the importance of HC information in the valuation of companies. Difficulty in measuring the monetary value of HC was the weakness of the human resource accounting movement.…”

Section: Human Capital Disclosure Literaturementioning

confidence: 99%

An explanation of human capital disclosure from the resource‐based perspective

Abhayawansa

Abeysekera

2008

Journal of Human Resource Costing &Amp; Accounting

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Though the importance of human capital (HC) in firm value creation is firmly established in the literature the level of emphasis placed on human capital disclosure (HCD) by preparers of financial statements and sell-side analysts is minimal. The purpose of this paper is to address this dilemma by critically analysing the conceptualisation of human capital in disclosure literature and introduce a more germane explanation. Keywords AbstractPurpose -Though the importance of human capital (HC) in firm value creation is firmly established in the literature the level of emphasis placed on human capital disclosure (HCD) by preparers of financial statements and sell-side analysts is minimal. The purpose of this paper is to address this dilemma by critically analysing the conceptualisation of human capital in disclosure literature and introduce a more germane explanation.Design/Methodology/approach -The paper begins by reviewing the literature on intellectual capital disclosure (ICD) to examine the level of HC disclosure in various company media and use of such information by the capital market. It then critically analyse the conceptualisation of HC in those studies with a view to form an opinion about the adequacy of that conceptualisation. Then resource based view is justified as providing a more appropriate conceptualisation of HC to meet demands of the capital market.Findings -Substantial ICD literature conceptualise HC using human capital theory as a collection of knowledge and competences possessed by employees individually and collectively in firms. This has resulted in HC disclosure scores being considerably low compared to external and internal capital disclosure and does not portray HC in a way that is useful to the capital market. Resource based perspective enable HC to be depicted in a way that closely resembles the value creation potential of firms' employees.Practical implications -Guidance is provided for future HCD and ICD studies to operationalise HC to reflect its value creation potential by encompassing not only the firm specific stock of knowledge and capabilities of employees but also the strategic human resource management practices, enabling corporate culture and the idiosyncratic systems and practices of the firm in place to reap the benefits of these.

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Section: Human Capital Disclosure Literaturementioning

confidence: 99%

An explanation of human capital disclosure from the resource‐based perspective

Abhayawansa

Abeysekera

2008

Journal of Human Resource Costing &Amp; Accounting

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“…Additionally investigations were also centred on the impact of HRA knowledge on decision making (Herman & Mitchell, 2008;Flamholtz et al, 2003;Ogan, 1988;Chris Dawson, 1994;Flamholtz, 2004;Lev & Schwartz, 1971;Elias, 1972;Hendricks, 1976). Herman and Mitchell (2008) illustrated the way to report under a human capital liability concept which corresponds with the conventional accounting structure of contingent liabilities; scrutinize the fiscal influences of these reporting on market assessment, internal scheduling and investigate extents of human resource liabilities.…”

Section: Hra and Organizational Performancementioning

confidence: 99%

A Review of Human Resource Accounting and Organizational Performance

Jacob

Farouq²

2013

IJEF

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Human Resources are important assets of an organization. However, there is no legal regulation for accounting human resources in any of the organization's annual report. The main aim of this review is to study the benefits of HR practices to the firm. This review highlights the theoretical definitions for HRA and challenges faced during implementation of HRA measurement models to predict the organization's performance. The Human Resource Accounting is defined as "the process of identifying and measuring data related to human resource and communicating this information to interested parties" (American Accounting Association's Committee on Human Resource Accounting 1973). However, several challenges are faced by organizations during the execution of HRA. Since disclosures on human assets act as an evidence for wealth creation, it is resisted by several entrepreneurs. Human Resource Accounting helps to calculate the human resource capital, worth of management development, and enhances the value of management accounting.

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“…During the two last decades, several advocates of HRA, including Herman & Mitchell (2008) , Flamholtz et al (2003), Pekin Ogan (1988), Chris Dawson (1994, , Lev & Schwartz (1971), Elias (1972), Hendricks (1976) and others have suggested that HRA could benefit external users of financial statements. External decision makers must know the changes in human assets in order to evaluate properly assets and income.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Nabil Elias (1972) provided 2 groups of financial reports (one, traditional report and another, reports containing HRA information) in his research to the sample including accounting students, financial analysts and accountants. Research results showed that HRA information had meaningful impact on decisions statistically, although the relationship between HRA information and the adopted decisions was not strong.…”

Section: Asian Journal Of Finance and Accountingmentioning

confidence: 99%

Decision-Making Based on Human Resource Accounting Information and Its Evaluation Method

Avazzadehfath¹,

Raiashekar²

2011

AJFA

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Skillful and specialized human resources are of vital importance for an organization just like its physical properties and investments. Managers of the organizations spend a lot of money for training and educating their workers and employees in order to increase the efficiency of the organization under their control, but human resources accounting system which should be used for human resources information processing have not been used practically by any organization in Iran. This paper explores firstly, whether investment decisions are affected by human resource accounting information disclosed in the financial statements or not? Secondly it explores as to what factors can interfere in this effect? Thirdly it examines which evaluation method of human resource is the most appropriate method consistent with Iranian companies in terms of qualitative characteristics of accounting information? The results indicate that human resource accounting (HRA) information disclosure in financial statements is relevant and affect on the optimal investment decisions. Furthermore, other results state that the most effective and appropriate evaluating method of human resource consistent with current status of Iranian companies and institutions is the original cost method (Historical cost).

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The Effects of Human Asset Statements on the Investment Decision: An Experiment

Cited by 60 publications

References 0 publications

An explanation of human capital disclosure from the resource‐based perspective

An explanation of human capital disclosure from the resource‐based perspective

A Review of Human Resource Accounting and Organizational Performance

Decision-Making Based on Human Resource Accounting Information and Its Evaluation Method

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