Exploration of Merits and Demerits of Human Resource Accounting and International Financial Reporting Standards in Nigeria

Background: Human Resource Accounting (HRA) has gained significance in recent years, recognising human resources as vital assets for organizational success. However, its integration with International Financial Reporting Standards (IFRS) remains a subject of debate. Objective: This study aims to explore the merits and demerits of HRA and IFRS in Nigeria, examining their intersection and implications for financial reporting and human resource management. Method: An exploratory research methodology was employed, involving a comprehensive review of existing literature on HRA and IFRS. Result: The study reveals that HRA provides valuable insights into human resource management, enabling informed decision-making and strategic planning. However, limitations such as the lack of specific provisions or guidelines for valuing human resources, uncertainty and unpredictability of human life, and potential resistance from trade unions hinder its effective implementation. Conclusion: The study concludes that HRA has the potential to enhance financial reporting and human resource management in Nigeria, but its integration with IFRS requires careful consideration of the associated challenges and limitations. Unique Contribution: This study contributes to the existing literature by providing a comprehensive analysis of the merits and demerits of HRA and IFRS in Nigeria, offering valuable insights for policymakers, practitioners, and researchers. Key Recommendation: The study recommends prioritizing HRA, encouraging the adoption of IFRS, and conducting further research to develop specific standards for HRA, facilitating its widespread adoption in Nigeria.