COSTS OF THE HUMAN CAPITAL AND DEVELOPMENT OF THE SOCIAL POTENTIAL IN ACCOUNTING SYSTEM FOR CENTRAL AND EASTERN EUROPE

Authors

DOI:

https://doi.org/10.35774/jee2020.01.182

Keywords:

Human capital, social potential, IFRS, accounting.

Abstract

Nowadays, human capital and social potential become the most valuable resource for the harmonious development of the national economy. Expenditure on human capital and social development should occupy a significant part in the state budgets of countries. Therefore, accounting of such expenses is extremely important.

The purpose of the study is to reveal the possibility of accounting for expenditures on the human capital and social potential development in the accounting system of the Central and Eastern Europe, provide recommendations for the current accounting system.

The research revealed the plurality and ambiguity of the interpretation for the categories «human capital» and «social potential». The regulatory and legislative uncertainty complicates the accounting of the human capital costs and development of the social potential. These categories must be defined by law. As per normative and methodological basis for the accounting of the human capital, it would be better to apply the International Financial Reporting Standards.

The absence or misrepresentation of information about available human capital are contrary to IFRS requirements and reduces or exaggerates the value of the organization. It is offered in IFRS, to provide a comprehensive accounting of the cost for the human capital and developing social capacity.

The budget of the Central and Eastern European countries includes only the costs of social protection, health, education, recreation, culture, religion. After the budget analysis was conducted, the authors proposed to develop new objects of accounting (human capital, social potential), accounting standards for it. A part of the GDP expenses should be directed to the financing of the human capital expenditures and social potential development.

JEL: E24, G41, H83.

Author Biographies

Alexander PSHINKO, Dnipro National University of Railway Transport named after Academician V. Lazaryan

Doctor of Technical Sciences, Professor, Rector

Liudmila GOLOVKOVA, Dnipro National University of Railway Transport named after Academician V. Lazaryan

Doctor of Economics, Professor, Head of Finance and Economic Security Department

Viktoriia KOLOMIIETS, Dnipro National University of Railway Transport named after Academician V. Lazaryan

PhD in Economics, Associate Professor, doctoral student at Finance and Economic Security Department

Liliia DOBRYK, Dnipro National University of Railway Transport named after Academician V. Lazaryan

PhD in Economics, Associate Professor, Finance and Economic Security Department

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Published

09.03.2020

How to Cite

PSHINKO, Alexander, et al. “COSTS OF THE HUMAN CAPITAL AND DEVELOPMENT OF THE SOCIAL POTENTIAL IN ACCOUNTING SYSTEM FOR CENTRAL AND EASTERN EUROPE”. Journal of European Economy, vol. 19, no. 1, Mar. 2020, pp. 182-96, doi:10.35774/jee2020.01.182.