Advantages of HRA - Management Duniya

Advantages of HRA

Advantages of HRA:

HRA help in knowing whether human asset is being build up the business or not. An executive may show good results in producing goods etc., but he might not have build human resources properly.

1. HRA will give the cost of developing HR’s in the business.


2. The investment on the development of HR’s can be compared with the benefits & results derived.


3. The return on investment can realistically be calculated only when investment on HR’s is also taken in to accounts. The return on investment may be good because there is an investment on human beings. On other hand a low investment may be the reason of low investment on human asset. So ROI can give accurate results only when expenditure on employees is treated as an asset.


4. It will help management in planning & executing personal policies.


5. It can be seen whether the business as made proper investment in human resources in terms of money or not.


6. HRA will help in improving the efficiency of the employees.

Source: Books & Notes

Tags: accounting, accounts, Advantages, Advantages of HRA, Cost, Employee, Employer, Expenditure, expenses, finance, goods, HRA, HUMAN RESOURCE ACCOUNTING, income, Loss, Management, Profit, profit & loss account, revenue, sales, volume
By: Management Duniya