The utility of human resource accounting to creditors

Includes bibliographical references (pages 90-92)Human resource accounting is the process of identifying and\ud measuring data about human resources and communicating this information\ud to interested parties--internal users (managers) of financial statements and external users (investors and creditors). A number of\ud controversial issues are inherent to the concept of measuring the\ud value of workers and communicating these measurements on financial\ud statements. Basic problems focus on the definition of human resources\ud as assets, the effect of measurement on workers, and the implementation\ud of a measurement system. The stochastic valuation model suggested in\ud this thesis offers an economic valuation which could be utilized to\ud evaluate the development and conservation of human resources. The major benefits to be gained from human resource accounting\ud center on more accurate decision making by all users of the financial\ud statements. Although at this time the cost/benefit ratio may reflect a\ud negative balance, this empirical study reveals that the inclusion of\ud hmnan resource measurements on the financial statements can affect the\ud decision making process of creditors. If all other factors are equal,\ud favorable human resource data may result in a decision for the firm\ud with increasing investments in its people