Friday, May 8, 2009

Tighter Secretarial Norm By Midpoint At Home 5 Years - May 08, 2009

The Comptroller and Auditor General of India (CAG) is looking at the option to move from cash to accrual basis within the next five years in order to change the way government accounts are presented. The accrual-based financial statements are expected to provide more appropriate financial performance''s presentation as well as position of the government.

The government currently follows the cash basis accounting, where the cash was recorded in the books only upon receiving it. However, it doesn''t consider the receivables. Under India''s constitutional provisions, the account of the Union and the states shall be kept in the way prescribed by CAG.

The accrual accounting system would be based on Indian Government Financial Reporting Standards (IGFRS) issued by the Government Accounting Standards Advisory Board (GASAB) of the CAG of India.

The CAG recently had held a conference on accrual basis accounting to deliberate on the issue of migration from cash to accrual basis accounting and it laid down the roadmap for migration process.

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