The article presents information on first step toward a theory of human resource value in formal organizations. This theory seems to have relevance to accounting's objectives of measuring and reporting information for decision-making, management of human resources, custodianship of human resources and social controls over the utilization of people. Thus, the model can potentially help enlarge the scope of accounting in accordance with the recommendations in A Statement of Basic Accounting Theory. There are, of course, some limitations involved in the model. First, the model's scope is restricted to the nature and determinants of an individual's value to an organization. Thus it should not be inferred that the model purports to explain the value of groups of people in formal organizations. Similarly, it should not be inferred that the model purports to fully explain the nature of an individual's value. Future research may find that other variables should be included or that present variables are unnecessary.

The article deals with the problem of measuring the value of people to formal organizations, and presents a normative model for the economic valuation of individuals. It also examines the practical difficulties involved in operationalizing the normative valuation model as well as certain measurement approaches, which hold potential for surmounting the difficulties. The findings of some preliminary empirical research to develop a reliable and valid method of measuring an individual's value are also briefly reviewed. The implications of measuring an individual's value are explored in terms of the expected costs to be incurred or value to be lost from liquidating human assets as well as in terms of the cost-savings expected to be derived. An assessment of the project in these terms might lead to a decision to reject such a program. Similarly, once undertaken, the results of cost control programs should be evaluated in terms of the real net benefits derived and not merely in terms of the conventional accounting representations of these benefits.

This article presents criticisms of aspects of the major concepts, methods, and implications of human capital measurement and reporting proposed by Baruch Lev and Ada Schwartz. Although Lev and Schwartz do not formally define the concept of human capital, they do state that it is a source of income embodied in a person. Neither the set of services an individual can potentially provide nor the value of those services to an organization are "embodied" or inherent in the person. Rather, an individual's service potential is a function of the interaction between the person's skills and the role or set of tasks he performs in a given situation. A major limitation of the valuation model proposed by Lev and Schwartz is that it ignores the possibility and probability that the individual will exit from the organization for reasons other than death or retirement. Thus the application of the model may very significantly overstate an individual's expected service life, and, in turn, overstate or inflate the value of human capital.

Reviews the book "Investment in Human Capital: The Role of Education and of Research," by Theodore W. Schultz.

Reviews the book `Accounting From the Outside,' edited by Anthony G. Hopwood.

Reviews the book `Accounting for the Human Factor,' by Lee D. Parker, Kenneth R. Ferris and David T. Otley.

The article focuses on the problems faced by the accountants in measuring human resources. Although financial reports do not recently provide the information necessary to answer all the questions related to this problem, a growing number of corporate managers are showing concerns that their accounting systems are not adequate. As corporate managers make expenditures which they justify as investments in human resources , accountants reflect them as immediate charges to income without considering the timing of expected benefits. Human resource information is essential for each of the several phases of management's planning and control functions. Management of human resources should assist in recognizing and defining problems . There is some evidence to indicate a degree of meaningful correlation between profitability of organizations and their expenditures on acquisition, training, and relation of human resource. This suggests that firms with a high human asset investment ration will ultimately generate high profits.