Human Resource Accounting: The Missing Element in the Statement of Financial Position. Empirical Evidence from Ghana

Dawuda Abudu, Matthew Kwabena Valogo, Osman Chilala


The human resource is the most valuable asset of any business organization. This is because it utilizes other resources to create value for the organization yet it is not incorporated into the statement of financial position of the business. This paper examines what accounts for its exclusion and the way forward. A descriptive research design was deployed for the study. A purposive sampling method was used to select 140 members from the Institute of Chartered Accountants (Ghana) with a response rate of 82.1%.  It was revealed that the inclusion of the human resource in the Statement of Financial Statement cannot be achieved now until broader consultation and participation of key actors in the accounting field. The key challenges include initial and subsequent measurement problem; distortion of shareholders’ networth; there is no standard or law that supports its inclusion and lack of active market for human resource. Developing an appropriate and acceptable model for Human Resource Accounting is very difficult to achieve because of the variables to include in the model. The paper, however, recommends that the International Accounting Standard Board (IASB) should engage key actors and experts in the accounting field to debate on the pros and cons of human resource inclusion in the Statement of Financial Position.

Keywords: Human Resource; Statement of Financial Position; Model; Standards; Value; Measurement; Assets


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