Open AccessExclusion of Human Resource Accounting in Statement of Financial Position and its Effects on Performance: Empirical Evidence of Ghana
Author(s) -
Osei-Assibey Mandella Bonsu,
Li Kao Dui,
Liu Ruiwen,
Evans Kwabena Asare,
Agyemang Fredua Sylvester Prempeh
Publication year - 2019
Publication title -
business and economic research
Language(s) - English
Resource type - Journals
ISSN - 2162-4860
DOI - 10.5296/ber.v9i2.14419
Subject(s) - human resource accounting , accounting , financial statement , accounting management , human resources , position (finance) , income statement , valuation (finance) , business , equity (law) , stock exchange , financial ratio , financial statement analysis , financial accounting , accounting information system , economics , return on equity , finance , balance sheet , management , audit , political science , law
Human Resource is the most critical, very significant assets in any business organizations but it is not incorporated in the statement of financial position. The study examined the factors that have accounted for the exclusion of Human Resources Accounting in the statement of financial position of companies listed on the Ghana Stock Exchange. The paper also ascertained the relationship between human resource Accounting and firms performance. The study used both primary and secondary data. A regression model was used to ascertain the effects of Human Resource Accounting on a firm's performance. The study used secondary data from a published annual financial statement of all the listed companies on the Ghana Stock Exchange on the period of 2015-2018. The findings revealed that, the exclusion of human resources in the statement of financial position is due to these key obstacles such as: there is no proper clear-cut and specific guidelines for measuring costs and value of human resources; the period of existence of Human Resource is uncertain; there is no universally accepted method of valuation of human resources; no active market for human resource and the financial position of the business may be misleading. Despite the difficulties for the inclusion of HR into financial statement, it is worthy to note from the findings that, human resources contributes positively to a firm’s financial growth as evidenced by the positive effect on Return on Equity (ROE). Therefore, the paper recommends that the International Accounting Standard Board (IASB) should consult prime actors and professionals in the accounting field to debate on the arguments against and considerations for human resource inclusion in the Statement of Financial Position