HRA--Journal, Is, BS, Lecture Sheet

8/9/2019 HRA--Journal, Is, BS, Lecture Sheet

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HRM-5503: Human Resource Accounting

Topics:

--Journal Entries

--Income Statement

--Balance Sheet

Instructor:

Md. Hafij Ulla

Assistant !rofessor

"epartment of #usiness Administration

International Islamic Uni$ersit% &ittagong


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HRM Major: Human Resource Accounting, Dept. o Business A!ministration, II"#.

HRM-5'0': Human Resource Accounting

!rogram: M#A( "#A( IIU&.

) *teps in Accounting for Human Resources+

$. %he first step is to !etermine &hat HR costs are to 'e capitali(e!. %his is

essentiall) a matter o classi)ing HR costs into assets an! e*pense components.

+. %he second step is to amorti(e the cost incurre! ') an organi(ation on its

emplo)ees or recruiting, hiring, orienting, amiliari(ing, training an! !eelopingthem 'ase! on careerserice !uration.

. %he tird step is to appreciate the alue o emplo)ees eer) )ear at a particular

percentage rate. %his step is nee!e! 'ecause human resources appreciate in alue 'ecause o their e*perience oer )ears. %he more an emplo)ee ages, the more

heshe gains e*perience an! alue.

/. %he fourt step is to a!just human asset accounts. 0hen a material change inorgani(ation emplo)ee1s e*pecte! &or2ing lie occurs 3'ecause o an) o the

actors, namel), 'a! health, earl) retirement plan, emplo)ee turnoer,technological o'solescence4, the emplo)ee asset nee!s to 'e a!juste!.

5. %he fift and final step is to present organi(ation1s manpo&er alue as an assetalue in the inancial statements.

) &osts to ,e capitalied for HR aluation:

$. 6Social #osts7 inclu!ing all the e*penses incurre! on the emplo)ees ') their parentsguar!ians an! the StateSociet) rom their intra-uterine lie to the point o

entr) into serice.

+. 6Ac8uisition costs7 inclu!ing recruitment, selection, hiring an! placement costso emplo)ees 'orne ') the emplo)ing organi(ation.

. 69rientation an! on-the-jo' training costs7 inclu!ing salaries pai! to the

emplo)ees !uring their orientation perio!./. 6ormal training an! !eelopment costs o emplo)ees7 'orne ') the emplo)ing

organi(ation.

5. 6Separation costs o emplo)ees7 3pa)ment in case o earl) retirement,

termination, or resignation4, costs !ue to re!uce! eicienc), cost o acant position !uring the search or a ne& emplo)ee, etc.

;. 6#osts incurre! ') the emplo)ing organi(ation on the emale grai! 3pregnant4

emplo)ees7.


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&hose emplo)ment is rather casual or temporar) an! not permanentC hence these are not

to 'e sho&n as human asset.

) Recording of &osts Related to Human Resources:

/. or recording 1*ocial costs2cost of e4perience gained from oter

organiations+ Human Resources Inestment ') Societ) Ac----------Dr.

Human Resources Resere Ac--------------------------#r.

. or recording 1Ac6uisition costs2 17rientation and on-te-jo, training

costs2 1ormal training and de$elopment costs of emplo%ees2 1*eparation

costs of emplo%ees2 1&osts incurred ,% te emplo%ing organiation on te

female gra$id 8pregnant9 emplo%ees2 1Reard for e4tra ordinar%

performances and academic attainments2 1;4tra ordinar% ealt costs2+

Human Resources Inestment ') 9rgani(ation Ac--------Dr.

#ashBan2 Ac-------------------------------------------#r.

3. HR Maintenance ;4penses+ a9 roit oss Ac-----------------------Dr. oss on %urnoer9'solescence o Emplo)ees Ac----#r.

@. Re$ersal of ;ntr% against !resent !ractice+

Human Resources Inestment ') 9rgani(ation Ac-------Dr. >roit an! oss Ac-----------------------------#r.

M!. Haij "llah, Assistant >roessor, DBA, II"#, haij?$@=)ahoo.com #ontact: $=$=$


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. Recording of Bratuit%( !ension on Retirement and !ro$ident und+ a9 roit an! oss Ac------------------Dr. >roision or Fratuities Ac--------#r.,9 roision or Fratuities Ac--------Dr. #ash Ac-----------------------------------#r.

/0. Recording of Appreciation in te $alue of ;mplo%ees 8"ue to increase

efficienc% or inflation effect9+

Human Resources Inestment ') 9rgani(ation Ac----------Dr.

Human Resources Resere Ac------------------------------#r.

;4ample: /

%he ollo&ing are the summar) o transactions relating to Human Resources o Agrani

Ban2 t!. !uring +@. Recor! the transactions in the 'oo2s o account:

$. Social #osts at the 'eginning o +@-------------%2. +,;;5.$/ la2h

+. Rate o inlation---------------------------------------+G. Social costs or resigne!retire!terminate! e*pire!---%2. +=. la2h

/. Ban21s inestment at the 'eginning o +@------------%2. ;$=./ la2h5. Rate o appreciation in the alue o emplo)ees---------+./G

;. >resent oerall eicienc) o all the emplo)ees----------$$$.5G 3increase $$.5G4


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Human Resources Resere Ac---------------------------Dr.

Human Resources Inestment ') Societ) Ac-----#r.3A reersal entr) or the social costs incurre! on the o'solete an!

retire! personnel ') their parentsguar!ians an! statesociet).4

+=.

+=.

/

3i4

Human Resources Inestment ') Ban2 Ac------------Dr.

>roit an! oss Ac---------------------------------#r.3A reersal ') cre!iting to proit an! loss Ac or A9DS>H costs

to sho& these as inestment.4

;$=./

;$=./

3ii4 Human Resources Inestment ') Ban2 Ac------------Dr.

Human Resources Resere Ac--------------------#r.3or giing inlationar) eect to HR inestment o %2. ;$=./ la2h

') 'an2 +G.44

$+.;@

$+.;@

5 Human Resources Inestment ') Ban2 Ac------------Dr. Human Resources Resere Ac--------------------#r.3or appreciation in the alue o 'an21s inestment A9DS>H costs

+./G 'ecause o their gaining e*perience an! eicienc) &ith the

passage o time 3;$=./$+.;@4* +./G%2. $=. la2h.4

$=.$=.

; Human Resources Inestment ') Ban2 Ac------------Dr.

Human Resources Resere Ac--------------------#r.3or giing eect o increasing oerall eicienc) $$.5G on totalinestment 3;$=./$+.;@$=.4 %2. =roit oss Ac-------------------------------------------Dr.oss on %urnoer9'solescence o Emplo)ees Ac---#r.3or the unamorti(e! 'alance o Ban2 Inestment in A9DS>H

costs on the o'solete or retire! personnel &ritten o as 'an21s loss.4

$5.$5.

= Human Resources Inestment ') Ban2 Ac------------Dr. Ban2 >roit an! oss Ac-------------------------#r.3A reersal entr) or cash pai! ') the 'an2 on account o

A9DS>H costs or emplo)ees in the )ear +@ alrea!) !e'ite! to proit an! loss Ac. %he amount o cash 'eing pai!: $+.5/5.5

5=.+.$


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Agrani #anC Ftd.

Income *tatement 8or HR transactions onl%9

or te %ear ended 00

E*penses %a2a Income %a2aHR Maintenance e*penses------------3Salaries, Allo&ances, Bonus, an!

>roi!ent un!4

oss on %urnoer 9'solescence o

Emplo)ees----------------------------3unamorti(e! 'alance o Ban2

Inestment in A9DS>H costs4

HR Amorti(ation---------------

$,=$.

$5.

5@.$@

$,==/.$@

Human Resources Inestment ')Ban2 Ac 3#apitali(ation o costs on

HR ') reersal entr)4

Human Resources Inestment ')

Ban2 Ac----------------------

et oss rom HR---------------

$@+.+5

;$=./

$,roessor, DBA, II"#, haij?$@=)ahoo.com #ontact: $=$=$


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;4ample: %he ollo&ing are the summar) o transactions relating to Human Resources o Agrani Ban2 t!. !uring

+$. Recor! the transactions in the 'oo2s o account:

$. Social #osts at the 'eginning o +$-------------%2. +;,5;+. la2h Ban21s inestment at the 'eginning o +$------%2. @;5.; la2h

#ash Balance at the 'eginning o +$------------%2. +$@. ,,

HR Resere 'alance at the 'eginning o +$----%2. +;,H costs +.


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3or the unamorti(e! 'alance o Ban2 Inestment in A9DS>H

costs or emplo)ees treate! as turnoer loss upon their

turnoero'solescence.4

3ii4 >roit oss Ac-------------------------------------------Dr.

oss on %urnoer9'solescence o Emplo)ees Ac---#r.

3or the unamorti(e! 'alance o Ban2 Inestment in A9DS>H

costs on the o'solete or retire! personnel &ritten o as 'an21s loss.4

=.=

=.=

< Human Resources Inestment ') Ban2 Ac------------Dr. #ash Ac---------------------------------------------#r.

3or cash pai! or grai! emale emplo)ees.4

=.5=.5

=3i4

Human Resources Amorti(ation Ac--------------------Dr. Human Resources Inestment ') Ban2 Ac---------#r.

3or HR amorti(ation e*penses charge! to proit an! loss Ac.4

=.5==.5=

3ii4 >roit an! oss Ac-----------------------------------------Dr. Human Resources Amorti(ation Ac--------------#r.

3or the amount o HR inestment ') 'an2 amorti(e! !uring the

)ear +$ %2. =.5=.4

=.5==.5=

@ Human Resources Resere Ac---------------------------Dr.

Human Resources Inestment ') Societ) Ac--#r.

3or the amount o HR inestment ') societ) &ritten o !uring the)ear +$ %2.+,5;[email protected]

+,5;.=@

+,5;.=@

Agrani #anC Ftd.


or te %ear ended 0/0

E*penses %a2a Income %a2a


Emplo)ees----------------------------

3unamorti(e! 'alance o Ban2Inestment in A9DS>H costs4


=.=

[email protected]@

et oss rom HR--------------- =@[email protected]@

Agrani #anC Ftd.

#alance *eet 8or HR transactions onl%9

As on 3/st "ecem,er( 0/0

ia'ilities %a2a Assets %a2aHR Resere-----------------+;,@


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;4ample: 3%he ollo&ing are the summar) o transactions relating to Human Resources o Agrani Ban2 t!. !uring

+$$. Recor! the transactions in the 'oo2s o account:

$. Social #osts at the 'eginning o +$$---------------------%2. +@,=/.$ la2h Ban21s inestment at the 'eginning o +$$--------------%2. $,$9s

came rom other 'an2 an! %2. /@. la2h or $ ne& recruits.4

@+./+

@+./+

/ Human Resources Inestment ') oter #anC Ac----Dr. Human Resources Resere Ac--------------------#r.3or the amount o ineste! ') other 'an2 %2. .55 la2h or 5

e*perience! S>9s came rom other 'an2.4

.55

.55



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5 Human Resources Resere Ac---------------------------Dr.

Human Resources Inestment ') Societ) Ac-----#r.3A reersal entr) or the social costs incurre! on the o'solete an!

retire! personnel ') their parentsguar!ians an! statesociet).4

+H costs

G 'ecause o their gaining e*perience an! eicienc) &ith the

passage o time 3$,$H

costs or emplo)ees treate! as turnoer loss upon their

turnoero'solescence.4

$=.$=.

3ii4 >roit oss Ac-------------------------------------------Dr.

oss on %urnoer9'solescence o Emplo)ees Ac---#r.3or the unamorti(e! 'alance o Ban2 Inestment in A9DS>Hcosts on the o'solete or retire! personnel &ritten o as 'an21s loss.4

$=.

$=.

@ Human Resources Inestment ') Ban2 Ac------------Dr. #ash Ac---------------------------------------------#r.3or the amount incurre! ') the 'an2 as A9DS>H costs !uring the

)ear .$;..+/. +.5.4

+.5+.5

$

3i4

Human Resources Amorti(ation Ac--------------------Dr.

Human Resources Inestment ') Ban2 Ac--------#r.3or HR amorti(ation e*penses charge! to proit an! loss Ac.4

$/./@

$/./@

3ii4 >roit an! oss Ac-----------------------------------------Dr.

Human Resources Amorti(ation Ac--------------#r.3or the amount o HR inestment ') 'an2 amorti(e! !uring the)ear +$$ %2. $/./@.4

$/./@

$/./@

$$ Human Resources Resere Ac---------------------------Dr. Human Resources Inestment ') Societ) Ac--#r.

3or the amount o HR inestment ') societ) &ritten o !uring the

)ear +$$ %2.+,+;/.;/.4

+,+;/.;/+,+;/.;/

Agrani #anC Ftd.


or te %ear ended 0//E*penses %a2a Income %a2a


Emplo)ees----------------------------

3unamorti(e! 'alance o Ban2Inestment in A9DS>H costs4


$=.

$/./@/.=

et oss rom HR-------------------- $++./@/.=



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Agrani #anC Ftd.#alance *eet 8or HR transactions onl%9

As on 3/st "ecem,er( 0//


HRA--Journal, Is, BS, Lecture Sheet

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