The study examined the impact of Human Capital on firms’ performance in Nigeria considering Deposit

Money Banks. The selected deposits money banks are United Bank for Africa (UBA) Plc, First Bank Nigeria

Plc, Wema Bank Plc, Zenith Bank Plc, Guaranty Trust Bank Plc, First City Monument Bank Plc, Fidelity Bank

Plc, Diamond Bank Plc, Eco Bank Plc and Access Bank Plc in Nigeria. The study adopted Ex-Post Facto

resource like those relating to training, education, welfare, recruitment, selection, contribution to pension fund,

and subsistence allowance are better accounted for when they are capitalized rather than expensed. Therefore,

it is a necessity to capitalize them. In recommendation; International Accounting Standard Board should

consider human resources accounting as an inclusion of non-current asset. Further research should expand the

The global economy has for the past few decades witnessed gradual transition from industry based

environment; with a focus on physical assets such as factories, plants, machines and equipment; to a high

technology, information, and innovation based environment, which focuses on the expertise, talents, creativity,

Many organizations have explicitly acknowledged the vital place of their human capital by designating it as

their most valuable assets. Human capital is considered veritable because the human capital is indispensable in

the success of any organization as it controls and coordinates the other factors of production. There are so

many methods available to measure the success of physical capital and assess its impact on financial

performance. For measuring the effectiveness or efficiency of the use of the physical capital the well-known

conventional tools like profit, return on investments (ROI), return on equity (ROE), and return on assets

(ROA) can be used.

The specific objectives of the study are:

i. To examine the impact of Staff Salaries on firms’ profitability in Nigeria.

ii. To assess the impact of Directors’ Emolument on firms’ profitability in Nigeria.

The following null hypotheses are formulated for this study:

identification and measuring process and also its communication to the interested parties.” Human Resource

Accounting (HRA) is one of the latest concepts adopted by companies in recent times particularly in India.

Most of the enterprises which follow Human Resource Accounting spare a separate section in their annual

reports for a detailed account of their human resources. Human asset reporting in India usually includes a

profile of human assets, the compensation pattern, training and development, human asset productivity, human

asset value, and the total wealth of the organization. The concept of human resource accounting can be

basically examined from two dimensions: the investment in human resources; and the value of human

resources. The expenditure incurred for creating, increasing, and updating the human resource quality is known

as investment in human resources. Such investment yields fruitful results like higher productivity and higher

income to the organization.

Micah and Ihendinihu (2015) discussing the philosophy of human resource development stated that Human

and that investment in it benefits all the stake holders of the organization.

dependent variable in organizational research today, yet it remains one of the most vague and loosely defined

constructs. They further confirmed that the struggle to establish a meaning for performance has been ongoing

for many years and it is not limited to the field of strategic Human Resource Management (SHRM).

Thus performance was defined as an organization’s ability to exploit its environment for accessing and using

the limited resources (Zehri et al., 2012). Also in the years between 80s and 90s, identifying organizations

objectives became more complex than it was originally considered. This made managers to consider

organization as a successful one, if such organization is able to accomplish its goal (effectiveness) using

communicated and how they ought to be presented (Jacob and Sherine, 2013).

The theory has its root from labour economics which is a branch of economics that focuses on general work

force in quantitative term. The theory postulates that expenditure on education or training and development is

costly, and should be considered as investment since it is undertaken with a view to increasing personal

incomes. On the other hand, specific skills provide value only to a particular firm, and such skills are of no

value to competing firms. An instance of this is the knowledge of how to use a particular technology used only

by one firm, or knowledge of a firm’s policies and procedures provided to that firm, but usually would not be

valuable to other firms.

employee personal income, it will also serve as a means of achieving corporate competitive advantage which

reflects ultimately in organizational performance

Enyi and Adebawojo (2014) examined the effect of Human Resource Accounting on the decision making

process and business valuation method on the premise that firms in post industrial economy operate within a

competitive economic environment which require timely, effective and efficient decisions to ensure success

and survival. The study which is empirical was carried on 16 publicly quoted Nigerian Banks.

Okpako et al. (2014) examined the relationship between human resource accounting and firm performance.

Their study conducted a survey on seven (7) companies quoted on the Nigeria Stock Exchange. The study used

primary data and secondary data. 260 questionnaires were distributed and 246 questionnaires were retrieved on

HRA in order to unveil its strengths and weaknesses. Descriptive and content analyses were used in collecting

data through documented texts, journal articles and other publications.

However, there is no legal regulation for accounting human resources in any of the organization’s annual

report. Their main aim of this review is to study the benefits of HR practices to the firm. Their review

highlights the theoretical definitions for HRA and challenges faced during implementation of HRA

measurement models to predict the organization’s performance. The Human Resource Accounting was

resource accounting disclosure of companies in Nigeria. They considered five years financial data from 2005-

2009 of fifty two companies across all sectors as listed on the Nigeria stock exchange fact book of 2005-2009

were extracted using simple random sampling techniques. Descriptive, correlation and regression statistical

techniques were used in analyzing the data. Their findings show that the combined effect of Firm Financial

Performance accounted for 75.9% of the variation in Human Resource Accounting Disclosure (HRAD) with

an F– ratio 3.581 being significant at 5% confidence level.

Adebawojo et al. (2015) stated that human beings are the most critical assets in organizations as established in

most important asset is not being accounted for or disclosed in the organizations’ statement of financial

position like other physical assets and intangible assets.