Showing papers on "Accounting period published in 1987"

Human Asset Accounting: Where Are We Today?

Abstract: The theory of human asset accounting first became an issue in the 1960s. The concept has met with little acceptance due to the feeling that it has little to offer in a practical sense. There are limitations to its use outside an organisation, but its real benefit is internally with the decision‐making process. It has been broadly defined by the American Accounting Association as “the process of identifying and measuring data about human resources and communicating this information to interested parties”. This implies that human resources or assets should be capitalised on the financial statements. Traditionally, the costs of all human resources are added up and charged against the income of the period in which they were incurred. The reason for capitalising these or some of these costs is because there could be benefits derived from these costs in future periods. This method of “expensing” these costs, which include recruitment, selection, and training and development of employees, for example, goes against the principle of matching costs and benefits together in the same accounting period.

Year End Adjustments

Abstract: In the examples which we have looked at so far we have considered that the expenses and income which we have entered in our accounts relate exactly to the period for which we are preparing the profit and loss account. For example, if there was a debit of £550 on the rent account, we assumed that that was the rent expense for that accounting period. We shall now consider the accounting treatment where that is not the case and either there is rent owing at the balance sheet date or there is rent paid in advance at the balance sheet date. In both of these cases the amount appearing in our rent account does not represent the true rent expense for that accounting period.