The Measurements of Human Resources Accounting: The Applications and Challenges in Facing the Industrial Revolution 4.0

The idea of Human Resource (HR) measurement and reporting has developed over the last four centuries. The economic theory and concept of Human Resource Accounting (HRA) have been debated by accountants. HR is a company's most important asset, however, there are no formal regulations to recognize, measure and report it in financial reports. This study used literature in the form of secondary data such as documents, journal articles. Descriptive and content analysis approaches were used to collect and filter HRA information. The researchers looked at the contribution and controversy of the concept, the application, the development of HRA, and the methods for each stage. The valuation methods were classified according to the measurement type, and then the strength and weaknesses of each method were analyzed. Basically, the existence of HRA reporting will increase the quality of financial information for decision-makers. It shows corporate responsibility to external parties. Lev and Schwartz's model was a Human Asset valuation method that has been mostly applied in India. However, in some industries, different countries implement HRA differently; for instance the football industry in England, the artist management industry in South Korea, the financial industry in Sweden and the mining industry in Indonesia. In Indonesia, HRA is implemented only on disclosures in a sustainability report.