Assertion (A) : Human Resource Accounting is the measurement of the cost and value of people to the organization. Reasoning (R) : Human Resource Accounting involves measuring costs incurred by the organizations to recruit, select, hire, train and develop employees and judge their economic value to the organization. Codes :
Assertion (A) and Reasoning (R) are correct and (R) is the right explanation of (A)
Assertion (A): Human Resource Accounting (HRA) treats employees as assets and tries to measure both what the organisation spends on its people (cost) and what those people are worth to it (value). The American Accounting Association described it as identifying and measuring data about human resources and communicating this information to interested parties. So (A) is correct.
Reasoning (R): In practice HRA records the historical cost of acquiring people (recruitment, selection, hiring) and of developing them (training and development), and then uses valuation models, such as the Lev and Schwartz present value of future earnings model or the Flamholtz model, to judge their economic value. So (R) is correct.
(R) spells out exactly how the cost and the value of people are measured, which is why HRA is defined as in (A). Therefore (R) is the right explanation of (A).
Hence, Assertion (A) and Reasoning (R) are correct and (R) is the right explanation of (A).
Similar Questions
Assertion (A) : Human Resource Accounting is the measurement of the cost and value of people to the organization.
Reasoning (R) : Human Resource Accounting involves measuring costs incurred by the organizations to recruit, select, hire, train and develop employees and judge their economic value to the organization.
Codes :
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