Human Resource Accounting Disclosures and Financial Performance: Empirical Evidence from Manufacturing Companies in Nigeria

Abstract

Human Resource Accounting can be viewed as a measurement process that recognises the resources of an organisation as an intangible asset whose cost and value are included in the financial statement of the organisation. The study was carried out with an objective of assessing the effect of Human Resources Accounting Disclosures on Financial Performance of Manufacturing Companies in Nigeria with the use of secondary data, obtained from the published annual reports of five (5) purposively identified manufacturing companies from 2015-2019.The study employed the multiple regression analysis (MRA) and findings showed that both the HR Training & Development Cost (HRTDC) and HR Remuneration Cost (HRRC) jointly and individually have noticeable effect on the financial performance of manufacturing companies in the country, Nigeria. The study also found  that financial performance is dependent upon human resource accounting. HR Training and Development Cost and Remuneration Cost have significant contributions to the financial ability of a firm. The study, therefore, concluded that financial performance is dependent upon some individual performance that makes up the HRA disclosure such as staff rebuilding and retraining for development and HR remuneration. Finally, the study recommends that companies should expend more on the need to develop and train staff and also ensure that there are good staff remuneration and a low rate of employee turnover to avoid wastage of knowledgeable investment. Also, the accounting bodies should ensure a guideline that regulates the process of HR reporting in organisations.