The correct answer is D. All of the above.
Human resource accounting (HRA) is a process of identifying, measuring, and reporting the value of an organization’s human resources. HRA can be used to assess the cost of human resources, the value of human resources, and the return on investment (ROI) of human resources.
There are three main methods of HRA:
- The capitalization of historical cost model values human resources at the cost of hiring, training, and developing them.
- The replacement cost model values human resources at the cost of replacing them.
- The present value of future earning model values human resources at the present value of their future earnings.
Each of these methods has its own advantages and disadvantages. The capitalization of historical cost model is simple to use, but it does not take into account the future value of human resources. The replacement cost model is more accurate, but it is more difficult to use. The present value of future earning model is the most accurate, but it is also the most difficult to use.
The choice of method depends on the specific needs of the organization. For example, an organization that is trying to assess the cost of its human resources may use the capitalization of historical cost model. An organization that is trying to assess the value of its human resources may use the replacement cost model or the present value of future earning model.
HRA can be a valuable tool for organizations that want to better understand the value of their human resources. However, it is important to note that HRA is not a perfect science. There are many factors that can affect the value of human resources, and it is difficult to accurately measure all of these factors.