India to Introduce Accrual System New Accounting Method

The government of India is going to introduced a new accounting system. The new system will be a good option to make the system  transparent and accountability in financial reporting of government institutions.

According to the IANS reports:

The government has already accepted the recommendation of the 12th Finance Commission for introduction of the accrual accounting in principle. For the new system, Government Accounting Standards Advisory Board; a part of the Comptroller and Auditor General of India has prepared an operational framework and a detailed road map for implementation of the new accounting standards.

How the current system works:

The present cash-based accounting system lacks an adequate framework for accounting of assets and liabilities, depicting consumption of resources and presenting the full picture of the government’s financial position at any point of time

How will new system work:

Under the accrual system, transactions are recorded at the time when economic value is created, exchanged, transferred or impaired, irrespective of whether cash is actually exchanged or not.

You can download the Press Release and Speech By Pranab Mukherjee from here

Features of New accounting system:

  • The new accounting system present the real financial position of the government institution.
  • It will help to maintain the accuracy and transparency of the system.
  • It covers a broad spectrum of activities including budget preparation and execution
  • It will comprises  internal audit, audit by the Comptroller and Auditor General of India, monitoring and reporting arrangements
  • The system will help the government  in planning, policy making and budgeting process of public resources

About Shweta Mohta

A housewife with a passion for travel, maps and India. She loves to find new places to visit, map the directions and can talk on, So you get smoother experience to Travel in India.