The Consensus Accounting Model

By Carnevale, Anthony P.; Schultz, Eric R. | Training & Development Journal, July 1990 | Go to article overview

The Consensus Accounting Model


Carnevale, Anthony P., Schultz, Eric R., Training & Development Journal


The Consensus Accounting Model

Accounting measures the economic track record of organizational activities and functions. Managers have long recognized that a standardized accounting model for training would facilitate decision making and enhance training department effectiveness. But until now, no standardized model for accounting for training has been widely accepted.

Now there's a new standardized accounting model for training. The model represents the consensus of training and accounting experts (see page S-30) who contributed ideas to a research project underwritten by a grant from the U.S. Department of Labor and conducted under the auspices of ASTD.

This consensus accounting model ties the procedures of existing accounting practices to the desired outcomes sought by management in a specific organization. The model's four steps support strategic accounting. For example, using the model could help a manager determine the percentage of a department's resources spent for training, which departments or individuals require training, and important training considerations that should influence future budgets.

Step 1: Establish an organization-specific

definition of training

Accounting for training begins when decision makers in an organization reach agreement about what training is. For purposes of this discussion, training will be defined as "a structured program with identified objectives and learning plans to improve the knowledge, skills, and attitudes of trainees for use in their current and future job assignments." According to that definition, a consultant-provided program in which new employees learn how to use an organization's computer software is training. But an executive meeting convened to introduce a new corporate product or a performance appraisal to set employee work objectives is not.

This definition of training encompasses the following activities:

* formal training courses offered by the organization or by outside training providers;

* structured on-the-job training conducted by an employee's immediate supervisor or a qualified substitute and supplemented by written learning objectives and schedules;

* satellite broadcasts, job rotation assignments, and assessment center activities--if their primary purpose is employee development.

But this definition of training does not include activites such as these:

* conferences, seminars, meetings, and performance appraisals--unless employee development is their primary purpose;

* self-development that an employee carries out on non-work time or using personal resources.

Step 2: Determine all training cost

categories

It isn't easy to establish a uniform accounting system Supplement to the Training & Development Journal, July 1990 within an organization or across organizations. But identifying and defining training costs leads to a clear understanding of where training monies go. In reviewing expenses for a training program, an organization must explore direct, indirect, and miscellaneous costs.

Direct costs

Personnel. Personnel costs include total costs for people involved in training:

* Salaries and employee benefits of supervisory and non-supervisory training department directly engaged in developing, delivering, evaluating, and supporting training programs; for example, instructors, program designers, needs analysts, in-house evaluators of training, and clerical staff;

* Salaries and employee benefits of other company personnel who assist training staff by serving as resources for developing or delivering training; for example, subject-matter experts and line managers;

* Salaries and employee benefits of training participants;

* Fees and expenses of people from outside the organization who render training department services; for example, temporary clerical staff, training consultants, and outside evaluators of training. …

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