AN ASSESSMENT OF HUMAN ASSET ACCOUNTING TECHNIQUES AND ITS APPLICATION TO NIGERIA PRIVATE SECTOR
AN ASSESSMENT OF HUMAN ASSET ACCOUNTING TECHNIQUES AND ITS APPLICATION TO NIGERIA PRIVATE SECTOR
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Date
2002-11
Authors
LAMIDI, LAWAL I.
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Abstract
ABSTRACT
The most important asset in the knowledge economy is the Human asset. It is an
economy where a large amount of the value of the company resides in the heads of the
employees instead of the tangible assets of the company. This realization made us to
undertake a study of evaluating the present human accounting techniques. It is an attempt
to study what is available along with what ought to be.
We found out that most Human asset accounting has been around since 1960s. And its
perceived weakness centered mainly on the clash with generally accepted accounting
principles. There is also the problem of coming up with a model of valuing Human asset
acceptable to all. These are the drawbacks in the practical application Human asset.
We discovered that there are various methods of valuing Human assets that can be
classified into three namely: Historical cost approach, opportunity cost and discounted
present value method.
We also found out that compliance with human asset accounting will assist users of
financial statement especially investors and employees. We discovered that it is not the
absolute value of human asset that is critical, but more its significance as an indicator of
the importance that management should pay to it. There is a growing consensus that
employees have moved from being a cost to becoming a resource and today they are
considered to be an asset or a capital.
Our recommendation is that Lev and Schwartz method of accounting for Human asset
with some modification should be used because of it simplicity and appeal for
acceptability. Therefore, to compute the value of human capital, multiply the number of
employee by their salaries; multiplied by the average length of tenure for employee;
multiplied by average increase in wages per year; all discounted back to year one. The
resulting figure represents the human asset value for the firm.
We also recommend that for convenience sake, the following organisations can readily
apply it, namely sport clubs, management consultancy firm, Accounting firms and Banks.
Human asset accounting information in our opinion should be included in our present
financial statement as an additional statement unaudited as presently being practiced by
twelve Indian companies.
Description
A DISSERTATION SUBMITTED TO THE POST-GRADUATE
SCHOOL,AHMADU BELLO UNIVERSITY, ZARIA IN PARTIAL
FULFILMENT OF THE REQUIREMENTS FOR THE AWARD OF
MASTER OF SCIENCE DEGREE IN ACCCOUNTING AND
FINANCE
Keywords
ASSESSMENT,, HUMAN, ASSET, ACCOUNTING, TECHNIQUES, APPLICATION, NIGERIA, PRIVATE, SECTOR