In today's competitive era, knowledge and intangible assets are vital for the success of business enterprises. Most of the companies target return on investment, rather than return on knowledge and hence negligible efforts are taken by industries in this regard. However, in the last one decade, they have realized the importance of knowledge assets and their utility for the business organization. Now an attempt is being made to put a value to these intangibles, to highlight these hidden values to book, and identify human assets as one of the key intangible assets.

In the modern industrial system, the productivity of any organization is the result of the combined efforts of all the factors like, men, material, machine and money. Unlike other factors of production, human resource is an active factor which controls and coordinates all the other factors to get the maximum output at the minimum cost. The most specific asset that an enterprise has are its personnel. It takes advantage of their interdependent knowledge that would explain why some firms are more productive than others. To value the human resource and to communicate information to the interested parties, accounting for human resource is an important task in the hands of accountants in recent years. Human Resource Accounting (HRA) means accounting for people as organizational resources. It is the measurement of the cost and value of people to an organization.

The success of an organization or business largely depends on the quality, efficiency and character of the people. An organization which is having vast resources and the latest technologies, cannot succeed without the right people to identify and manage these assets. Actually, human beings in an organization are its living assets. Their value should be accounted. This is possible through HRA. HRA, as an approach, has been originally defined as, "The process of identifying, measuring and communicating information about human resources in order to facilitate management within an organization". It is an extension of the accounting principles, of matching concepts and revenues, and of organizing data to communicate relevant information in financial terms. This made us think about how to assess the value of human capital in addition to tangible assets and how to improve it for the sake of the organization, which led to proper human resource management.

With the latest improved technology and social awareness, the most valued assets of any organization consists of the trained personnel in the form of engineers, technicians, skilled workers, executives, accountants, etc. Hence, human resource continues to play a dominant role in the effective use of physical as well as financial resources. In fact, the contribution and importance of human workforce in any organization is precious but, at the same time, it is very difficult to evaluate the worth of human assets.

Accounting World Magazine, Human Capital in India, Business Organizations, Human Resource Accounting, HRA, Tangible Assets, American Accounting Association, Capital Assets, Human Capital Valuation Models, Knowledge Management, Insurance Sectors, Return On Investment, ROI.