MEASURING THE BENEFITS OF
HUMAN RESOURCE ACCOUNTING
To establish a new organisation, numerous resources are required. One of the most important elements to start an organisation is human resources. As a matter of fact, there is no organisation that can operate without the presence of people as a part of it. For example, in a manufacturing company, people are the personnel responsible for managing every stage in a production process. Although automation is now becoming common in modern business, it still needs operators to monitor and control the machineries and robots. This condition will be more important as in the case of service organisations, which involves human assets as the most essential component of the “product” delivery. Organisations such as banks or airline companies require many high-skilled employees to provide their service. These persons should be recognized closely due to their significant roles to the organisations. Failure to acknowledge their existence may result in their job dissatisfaction. Moreover, it may also cause the termination of their contracts with the organisations. A sport organisation is another form of service institution that strongly relies on its human resources. Athletes are the major and most vital assets in this sort of institution where most of the funds are allocated towards the athletes’ development. Therefore, this outflow should be treated as an investment, rather than expenditure, because it will bring economic benefits for the organisation in the future. According to that reason, it becomes an essential requirement for the organisation to disclose the human resource costs and value explicitly in the financial report, so that the report is able to portray the real condition of the organisation. This concept is known as human resource accounting. It was defined earlier by the American Accounting Association in 1973 as “the process of identifying and measuring data about human resources and communicating this...