The Effect of Non Disclosure of Human Capital Investment in the Financial Statement

International Journal of Economics and Management Studies

© 2015 by SSRG - IJEMS Journal

Volume 2 Issue 5

Year of Publication : 2015

Authors : Ijeoma, Ngozi Blessing

10.14445/23939125/IJEMS-V2I3P102

How to Cite?

Ijeoma, Ngozi Blessing, "The Effect of Non Disclosure of Human Capital Investment in the Financial Statement," SSRG International Journal of Economics and Management Studies, vol. 2,  no. 5, pp. 6-19, 2015. Crossref, https://doi.org/10.14445/23939125/IJEMS-V2I3P102

Abstract:

Human capital accounting has been found to possess the potential to lead to a profound reconceptualiztion for the management of people any organization. Specifically, it can contribute to organizational culture in which they believe that people are valuable organizational resources are manifested in decision and actions. This study assessed the effect of non-disclosure of human capital accounting in the financial statement of an organization. The objectives of this research work includes: to establish the need to measure the value of human asset and disclose it in the organization’s balance sheet; to establish the implication of its non-inclusion in the balance sheet and to establish the importance of human resources accounting to the organization. The source of data was primary data collected from managers and staff of two banks in Anambra State, Nigeria. The result of the analysis found that non-inclusion of human capital in balance sheet has significant material effect on the financial statement; disclosure of human capital will significantly enhance the net worth of the organization; and accounting for human resources significantly enhances the competitive position of an organization. It was deduced from the finding that human capital is an unavoidable concept as far as business transactions are concerned, that it is important for accounting profession and the Accounting Standard Boards to promote and sponsor the legislation of its proper disclosure in the statement of accounting standard.

Keywords:

Accounting standard, financial statement, management, balance sheet, managers

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