There are several methods of HR valuation and accounting and these are broadly divided into two categories: The monitory measures and non-monetary measures.

Monetary measures include
(a) Historical cost method
It suggests capitalizing the expenditure of the firm incurred on recruitment and selection, training and development of the employees and treats them as the assets of the organization for the purpose of HR accounting. This method suffers from a limitation that the capitalization of costs does not reflect its true value. The total performance has to be judged in relation with the total cost associated with the HR to reflect its value.

(b) Replacement cost method
The cost of replacement of individual and the re-building cost of organization is assessed to reflect the HR asset value of the individuals and the organization. However this method may not reflect either the actual cost or the contribution associated with HR

(c) Opportunity cost method
This model envisages the computation of monetary value and the allocation of people to the most promising activity and thereby assesses the opportunity cost of main employees through competitive bidding among the investment centre.

(d) Economic value method
The value of human resource is evaluated on the basis of contribution they are likely to make in the organization during their stay with the organization. The payments made to the employees in the form of salary, allowances and benefits are estimated and discounted appropriately to arrive at the present economic value of the individual.

(2) Non-monetary measures:
(a) Expected realizable value method
The elements of expected realizable value like the productivity, transferability and promote-ability are measure using personal research, appraisal techniques or other objective methods. The productivity is measured by objective indices and managerial assessment. The promote-ability and transferability are measured in terms of potential using psychometric tests and subjective evaluations.

(b) Discounted present value of future earnings
This method was use by Rencis Likert who proposed three sets of variables-casual, intermediate, output. These helped in measuring the effectiveness over a period of time. Casual variable include leadership style and behaviour, the intermediate variable are morale, motivation, commitment to goals etc. and these in turn affect the output variables like production, sales, profit etc.

HR valuation tells the potential investors about the human assets of a company. The investors can assess the returns from human assets which infect is the return they get from the people who are managing their investments. It also assures the customers the company that it has the requisite human capital reserves to service their demand. The employees of the company also feel assured when they come to know that they are counted as assets by the company and not expenses. HR valuation also serves as a tool for improved performance appraisal and man power assessment. It also helps the management in realizing the present value of its future commitment of providing employee compensation. It also helps the management in taking appropriate decision regarding the use of human assets. Managers get valuable feedback regarding the effectiveness of their HR policies and practices.

Human Resource Valuation
Human resource valuation means the identification and measurement of the value of human resources and then supplying this information to the interesting parties. It is sometimes also defined as a method of assigning value to the employees on the basis of their future economic services to the organization.. The employees of value at the present worth of the services they are expected to render during their stay in the organization or a particular period of time.

Human Resource Accounting
Human resource accounting deals with the investment made by an organization in its employees and the changes that occur in this value over a period of time. HRA is defined as a process of identifying and measuring data about human resources and communicating to the information to the interesting parties. The costs incurred by an organization in recruiting, selecting, hiring, training and developing the human assets are taken into account by HR accounting.

With change in the organizational environment the role played by the HRD professionals has also undergone a change. At present the HRD Professionals acts as:

Strategic adviser to help the decision makers on issues related with HRD. They also play the role of an HR systems designer and developer by assisting the HR management in designing and developing HR systems in an organization to increase its performance.

They also act as organizational change agents by helping the management in designing and implementing change strategies to transform the organization. The result is more efficient work teams, intervention strategies, quality management and change reports. The role of organization design consultant is also played by them when they advised the management on work systems design and efficient use of available human resources. HR professionals work as instructional designer or learning programme specialist when they identify the needs of the employees and develop and design the required learning programmes. They also prepare materials and other learning aids for these programmes.

An HRD professional dons the role of career counselor when he assists individual employees in assessing their knowledge and skills to development realistic career development plan for the employee. The role of a coach or a performance consultant is played by them when they advised line managers about the appropriate intervention designed to improve the performance of the group or an individual. HRD Professionals act as researchers when they assess the human resource development practices and programmes with the help of appropriate statistical procedure to find out their effectiveness and then they communicate the results to the top level management.

The common challenges faced by HRD professionals are:-

(a) Culture or attitude:
Different countries have different culture and as the world has become a global village HRD Professionals have to face the cultural challenges in different countries or with the employees belonging to the different countries.

(b) Technology or skills:
The pace of technological development is very high and the new technologies are replacing the older ones quickly. Same is the case with techniques and technologies use for training. An HR professional has to upgrade his skills and knowledge to meet the requirements of the new generation.

(c) Values of behaviour:
The HRD professionals have to adjust themselves to the emerging new values as principle centric leadership is becoming trend in the corporate world. Values like trust credibility timeliness and the simpler rules are becoming the corners stone of many businesses.

(d) Knowledge or information:
Enhancement of knowledge is also a big challenge for HRD professional as they have to understand the different philosophies demonstrated at different places in the world. For example the philosophy related to leadership changes dramatically in organizations from different parts of the world

(e) Life style or habits:
The life style of an employee is also important for HRD professionals because they have to understand the habits of the employees and then decide the training that needs to be imparted for bringing a change in the habits of the employees.

(f) Knowledge of new practices:
An HRD professional has to be aware of the new practices adopted by the organization around globe. An HRD professional should know about the practices like dignity of individual, retention of employees, leadership by examples, clear conscience relationship with employees share holder, vendors, suppliers, customers and society at large.

(g) Environment:
An open environment is required for the success of an organization. The organizational environment should have meritocracy, fearless, justice, speed imagination and accountability. It is the job of the HRD professional to inspire the employee to perform better ones this environment is created in the organization.