COSTS OF THE HUMAN CAPITAL AND DEVELOPMENT OF THE SOCIAL POTENTIAL IN ACCOUNTING SYSTEM FOR CENTRAL AND EASTERN EUROPE
DOI:
https://doi.org/10.35774/jee2020.01.182Keywords:
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.
References
Ali M., Egbetokun A., Memon M. (2018). Human capital, social capabilities and economic growth. Economies, 6(2), pp. 1-18, Retrieved from: https://doi.org/10.3390/economies6010002.
Kvilinskyi O., Mieshkov A., Bondaryeva I. (2017). Investigation of the social factors of development of society in the territories with transforming environment. Research Papers in Economics and Finance, 2(2), pp. 13-19, Retrieved from: http://ref.ue.poznan.pl/index.php/REF/article/view/36. https://doi.org/10.18559/ref.2017.2.2
Kurganskaya E. (2017). The System of the Treasury in Ukraine. Actuality and prospects of development. Research Papers in Economics and Finance, 2(3), pp. 15-22, Retrieved from: http://dx.doi.org/10.18559/ref.2017.3.2.
Mahmood H., Alkahtani N. (2018). Human resource, financial market development and economic growth in Saudi Arabia: a role of human capital. Economic Annals-XXI, 169(1-2), pp. 31-34, Retrieved from: https://doi.org/10.21003/ea.V169-06.
Siddiqui A., Rehman A. (2017). The Human Capital and Economic Growth Nexus: in East and South Asia. Applied Economics, 49 (28), pp. 2697-2710, Retrieved from: https://doi.org/10.1080/00036846.2016.1245841.
Fisher I. (1930). The application of mathematics to the social sciences. Bull. Amer. Math. Soc., 36 (4), pp. 225-243, Retrieved from: https://doi.org/10.1090/S0002-9904-1930-04919-8
Nicholson J. (1891). The Living Capital of the United Kingdom. Economic Journal, 1, pp. 95-107. https://doi.org/10.2307/2955843
Smith A. (1976). An Inquiry into the Nature and Causes of the Wealth of Nations. The Glasgow Edition of the Works and Correspondence of Adam Smith, Vol. II, edited by R.H. Campbell and A.S. Skinner. Oxford University Press, Retrieved from: https://www.ibiblio.org/ml/libri/s/SmithA_ WealthNations_p.pdf.
Becker G. S. (1964). Human Capital. N.Y.: Columbia University Press.
Mincer J. (1974). Progress in Human Capital Analysis of the Distribution of Earnings. Stanford: Junipero Serra Blvd. https://doi.org/10.3386/w0053
Mincer J. (1981). Human Capital and Economic Growth. NBER Working Paper, 803, Retrieved from: http://www.nber.org/papers/w0803.pdf. https://doi.org/10.3386/w0803
Bontis N., Dragonetti N., Jacobsen K., Roos G. (1999). The Knowledge Toolbox: A Review of Tools Available to Measure and Manage Intangible Resources. European Management Journal, 17(4), pp. 391-402. https://doi.org/10.1016/S0263-2373(99)00019-5
Schulz T. W. (1961). Investment in Human Capital. American Economic Review, 51, pp. 1-17.
Pelinescu E. (2015). The Impact of Human Capital on Economic Growth. Procedia Economics and Finance, 22, pp. 184-190, Retrieved from: https://doi.org/10.1016/S2212-5671(15)00258-0.
Kolomiiets V., Golovkova L. (2017). The institutional content of the human capital of the national economy. Baltic Journal of Economic Studies, 3(5), pp. 289-293, Retrieved from: http://www.baltijapublishing.lv/index.php/ issue/article/view/297.
https://doi.org/10.30525/2256-0742/2017-3-5-289-293
Simchenko N. O., Zhaldak G. P. (2014). Scientific approaches to assessment of social innovations at industrial enterprises. Actual Problems of Economics, 1, pp. 376-382, Retrieved from: http://nbuv.gov.ua/UJRN/ape_2014_1_46.
Sardak S., Bilska O., Simakhova A. (2017). Potential of economy socialisation in the context of globalisation. Economic Annals-XXI, 164(3-4), pp. 4-8, Retrieved from: https://doi.org/10.21003/ea.V164-01. 1
McClelland D. (1973). Testing for Competence Rather Than for «Intelligence». American Psychologist, January, pp. 1-14. https://doi.org/10.1037/h0034092
Precob C., Mironiuc M. (2016). The Influence of Reporting Intangible Capital on the Performance of Romanian Companies. The Audit Financiar journal, 1(133), pp. 103-114, Retrieved from: https://doi.org/10.20869/AUDITF/2016/133/103
Boronos V., Plikus I., Aleksandrov V. (2016). Financial and accounting approaches to definition of the intangible factors impact on the value of the company. Economic Annals-XXI, 160(7-8), pp. 121-125, Retrieved from: http://soskin.info/userfiles/file/Economic-Annals-pdf/DOI/ea-V160-24.pdf https://doi.org/10.21003/ea.V160-24
Necula S.-C. (2017). Accounting decisions from the perspective of profitability. Economic Annals-XXI, 166(7-8), pp. 72-75, Retrieved from: https://doi.org/10.21003/ea.V166-14
Pająk K., Kamińska B., Kvilinskyi O. (2016). Modern trends of financial sector development under the virtual regionalization conditions, Financial And Credit Activity. Problems Of Theory And Practice, 2(21), pp. 204-217, Retrieved from: http://fkd.org.ua/article/view/91052/92128. https://doi.org/10.18371/fcaptp.v2i21.91052
Radyeva M. N., Porokhnia V. M., Kuznetsov V. I. (2017). Modeling the Impact of Intellectual Capital on Macroeconomic Processes in the State. State and Regions. Series: Economics and Entrepreneurship, 2, pp. 22-25. (in Ukrainian)
Rekun I. (2015). Personnel management in the system of economic security of the railway transport company. Economics and State: International Scientific and Practical Journal, 11, pp. 28-32. (in Ukrainian)
Tkach A. A. (2013). Formation of the institutional paradigm of economic theory. Bulletin of International Nobel Economic Forum, 1, pp. 329-334. (in Ukrainian)
Required IFRS Standards 2018. (2018). Retrieved from: https://www.ifrs.org/issued-standards/list-of-standards/
Vaitkevičius S., Čiutienė R., Meilienė E., Savanevičienė A. (2015). Typology of Human Capital Development in EU Countries. Procedia Economics and Finance, 23, pp. 1641-1648, Retrieved from: https://doi.org/10.1016/S2212-5671(15)00520-1.
Conceptual Framework for Financial Reporting (Conceptual Framework). (2018). Retrieved from: https://www.ifrs.org/-/media/project/conceptualframework/fact-sheet-project-summary-and-feedback-statement/conceptualframework-project-summary.pdf.
International Integrated Reporting Framework. (2013). International Integrated Reporting Council («IIRC»). Retrieved from: http://integratedreporting.org/ resource/international-ir-framework/
Price of the state. (2018). Retrieved from: http://cost.ua/budget/expenditure/
Glaeser E. W. (1993). The Formation of Social Capital. OECD Conference Papers. Chicago-L, Retrieved from: http://www.oecd.org/innovation/ research/1824983.pdf.
Putnam R. (1996). Who Killed Civic America? Prospect, March, pp. 66-72, Retrieved from: https://www.prospectmagazine.co.uk/magazine/ whokilledcivicamerica.
Downloads
Published
How to Cite
Issue
Section
License
Authors who publish with this journal agree to the following terms:
- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).