The Effect of Amortizing the Value of Human Resource Cost on the Financial Performance of Nigeria Banks

Odewusi Oyetola

Babcock Univeristy, Ilishan Remo, Ogun State, Nigeria.

Olalere Mayowa David *

Babcock Univeristy, Ilishan Remo, Ogun State, Nigeria.

*Author to whom correspondence should be addressed.


This study looked into how Nigerian banks' financial performance was affected by depreciating their human resource costs. The research design used in this study is the survey research design. Reliability and validity of the data sources were established by the questionnaire. The data were analyzed using the descriptive and Regression statistical technique. It was discovered that human resources had a major influence (Adj R2 = 0. 858, F (9.064)). The findings showed that financial performance benefited from the expense of human resource training. FP was significantly impacted by HRTC (β = 0.3.86, t = - 1.586, p< 0.05), and FP was significantly impacted by HRAC (β = 0.911, t = 4.143, p<0.05). According to the study, using acquisition costs for human resources has a favorable effect on an organization's financial performance. The management boards of the banks under examination are advised by the study to work toward implementing the policy of classifying human resource costs as assets. To guarantee that their employees have the technical know-how and understanding to perform their tasks more efficiently, banks must plan regular training sessions for their HR department. Since the organization's most significant asset is its human resources, the Central Bank of Nigeria ought to ensure that the funds allocated to them are appropriately declared and acknowledged as assets in bank annual reports. By doing this, the genuine financial performance of the institutions will be more accurately depicted.

Keywords: Financial performance, human resource cost, human resource acquisition cost

How to Cite

Oyetola , Odewusi, and Olalere Mayowa David. 2024. “The Effect of Amortizing the Value of Human Resource Cost on the Financial Performance of Nigeria Banks”. Asian Journal of Economics, Business and Accounting 24 (6):120-34.


Download data is not yet available.


Alekhya & Lakshmi, Impact of Corporate Social Responsibility on Organization Performance. International Journal of Advanced Science and Technology. 2020; 29(6s):2256-2261.

Khan S. Impact of human resource accounting on organizations’ financial performance in the context of SMEs. Accounting. 2021;7:621–628.

Jena BM, Maharana N, Chaudhury SK, Mohanty S. Human Resource Accounting and Financial Performance of Select Small-Scale Industries of Odisha: An Empirical Analysis. Orissa Journal of Commerce. 2022;43(1):80-92.

Bassey EB, Tapang AT. Capitalized human resources cost and its influence on Corporate productivity: A study of selected companies in Nigeria. International Journal of Financial Research. 2012;3(2):48–59.

Brummet RL. Accounting for human resources. The Journal of Accountancy. 1970;4:62–66.

Hermanson RH. Accounting for human assets. Research Monograph No. 99. (Atlanta. Georgia: Business Publishing Division, College of Business Administration, Georgia State University); 1986.

Likert R, Pyle WC. Human resource accounting; A human organizational Measurement approach. Financial analyst Journal. 1971;75-84.

Flamholtz EG. Human resources accounting, Los Angeles: Jossey-Bass Publishers; 1985.

Flamholtz EG. Human resource accounting: Advances, concepts, methods and applications, Boston, MA; Kluwer academic publishers, London; 1999.

Dobija M. How to place human resources into the balance sheet. Journal of Human Resources Costing and Accounting. 1998; 3(1):83-92.

Sydenham RW. Human Resource Accounting Measurement. Unpublished MSc Dissertation, University of Birmingham; 1979.

Toulson PK, Dewe P. HR Accounting as a Measuring Tool. Human Resource Management Journal. 2004;14(2):75-90.

Srinivasan R. Human resources accounting practices in India; 2009 Available:

Hendriksen ES, Van Breda MF. Accounting Theory, 5th Ed. Richard D. Irwin Inc., Homewood, USA; 1992.

International Accounting Standard (IAS) 38, Intangible Assets. Available: 6BABEB783D90/0/ias38sum.pdfias38

Ozovehe BF. Effect of Human Resources Accounting (HRA) Cost Information on Investment Decisions of Listed Assurance Companies in Nigeria. International Journal of Research And Scientific Innovation. 2024;11(2):65-85. DOI:

Chen M, Cheng S, Hwang Y. An Empirical investigation of the relationship between intellectual capital and firms' market value and financial performance. Journal of Intellectual Capital. 2005;6(2):159-176.

Mueller JM. Amortisation of certain intangible assets: Journal of Accountancy; 2004 Available: http://www.journal

Cascio WF. The future world of work: implications for human resource costing and accounting: Journal of Human Resource Costing and Accounting. 1998; 3:9-19.

Choi WW, Kwon SS, Lobo GJ, Market valuation of intangible assets: Journal of Business Research. 2000;49: 35-45.

Kajola SO, Adedeji SB. Human resources accounting: Old myth and new realities. Babcock Journal of Economics, Banking and Finance. 2011;1:110–121.

Salisu A. September. Retrieved from web site; 2011.

Available: _ Financial_Reporting_of_Quoted_Service_Companies_in_Nigeria

Luthans F, Youssef C. Human, social and now positive psychological capital management: Investing in people for competitive advantage. Organizational Dynamics. 2004;33(2):143–160.