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DETAILS
OF ESTIMATE IN WHICH COST IS NOT SANCTIONED |
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FOR THE
PERIOD FROM 01-04-2009 TO 31-12-2009 |
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Sr. No. |
ESTIMATE
NO. & YEAR |
ACCOUNT
HEAD |
AMOUNT
EXPENDED (Rs. ) |
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1 |
1726
APP 09-10 |
1150303 |
210000.00 |
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ANNEXURE
" B " |
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LIST OF
ESTIMATES IN WHICH COSTS ARE INCURRED ABOVE SANCTIONED AMOUNT |
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FOR
WHICH NO APPROVAL IS OBTAINED FROM COMPETENT AUTHORITY |
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FOR THE
PERIOD FROM 01-04-2009 TO 31-12-2009 |
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Sr. No. |
ESTIMATE
NO. & YEAR |
HEAD OF
ACCOUNT |
AMOUNT
SANCTIONED (Rs. ) |
AMOUNT
INCURRED (Rs. ) |
EXCESS
AMOUNT INCURRED (Rs. ) |
EXCESS
(%) |
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|
|
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1 |
1484
APP 07-08 |
1150303 |
55505.00 |
72793.00 |
17288.00 |
31.15% |
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2 |
1487
APP 07-08 |
1150303 |
47000.00 |
52269.00 |
5269.00 |
11.21% |
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3 |
1539
APP 09-10 |
1150303 |
110568.00 |
158014.00 |
47446.00 |
42.91% |
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4 |
1708
APP 09-10 |
1150303 |
60200.00 |
119393.00 |
59193.00 |
98.33% |
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5 |
1710
APP 09-10 |
1150303 |
153227.00 |
195002.00 |
41775.00 |
27.26% |
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|
6 |
1711
APP 09-10 |
1150303 |
153477.00 |
195002.00 |
41525.00 |
27.06% |
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Cash Book and daily
balancing
All the cash books required to be
maintained as per corporate office
instructions are maintained by the DDO (Drawing
and Disbursing Officer), written up regularly and the
balances in these books agree with the various allied records like, the bank
reconciliation statements, Trail Balance etc. The cash balance
for the unit is fixed and that the closing balance is
always maintained within the sanctioned limit. Sufficient reasons exist
wherever the balances exceeded the prescribed limit and that hey are
properly recorded in the cash books. The cash balance for the unit is
fixed and that the closing balance is
always maintained within the sanctioned limit. Sufficient reasons exist
wherever the balances exceeded the prescribed limit and that hey are
properly recorded in the cash books. Bank/Cash transactions are held with
the bank with which the unit has been authorized to transact and that the
authorization does not exist for more than one bank at one station.
Necessary security is obtained
from the employee being appointed to work as cashier. A cash
chest is embedded in the all and is properly secured. The cash
is kept overnight in the cash chest embedded. The closing
cash balances in all the four cash books are
checked at
least once in a month before signing the trial balance. these will provide
information that remittances into bank are not unnecessarily
delayed. The keys of the cash chest are kept in the
joint custody of cashier and the
DDO. A set of these key is handed over to the head of the office under
acquaintance duly
sealed. The claims of staff
are dealt with and settled promptly.
Call for the applications pending for action and ensure that here is
no abnormal delay in
settlement. The requisition for cash drawal is prepared keeping in view the
instructions from corporate office and is submitted on the due dates
prescribed. Proper receipts for cash and other valuables are
issued in the prescribed form ACG
67. The various returns to corporate office and Circle office where
necessary are submitted in time and a calendar of returns is maintained for the
same. Proper arrangement exists for signing of cheques by two
officers. The specimen signatures of officers authorized for
signing the cheques are communicated to the bank promptly. Register of
cheques cancelled is maintained properly and entries of all cheques cancelled
are made in the register following the instructions on the subject and proper
and complete for cancellation are recorded in the
register. The pay and allowances are drawn correctly drawn to
the employees A register of TALTC claims is
maintained and necessary watch is kept on the prompt settlement of TA/LTC
claims. Requisite allotment for loans advances is obtained from corporate office,
applications obtained, processed and paid to the eligible employees in time. Requisite allotment for loans advances is obtained from corporate
office, applications obtained, processed and paid to the
eligible employees in time. Proper accounting of
GPF contributions and recoveries in respect of GPF are maintained and the applications there of attended to without
allowing room for complaints. Proper broad
sheets are maintained for the short term and long term
loans advances and are submitted in time to the CCA. All dues for payment to CCA are made within the time schedule
prescribed for the purpose. All Claims due for payment by CCA
are raised in time and that their clearance is watched and reported to
corporate
office. The pay fixation in all case has been done promptly and is in
accordance wit the rules governing the same. The
service books of the employees are kept under proper control. The SBs are maintained and
postings are made
regularly. The pay bills are drawn in time and the disbursements are arranged
without delay.
The leave accounts are posted regularly and are complete in all
respects. Salary accounts are opened
for all staff and the salaries are remitted
into the salary accounts of the employees and an intimation of the remittance
is given to the employees concerned. All the nominations due
are received and kept with the service books and
that necessary entries are made in the service books of the
respective officials/officers. The
annual verification of services done regularly and is recorded
in the service books. Proper watch is kept over the retirements of employees due. Their
pension applications are obtained in time, the pension calculations are made
correctly and submitted to the CCA, sanctions obtained and the benefits
disbursed to the employee concerned as far as possible on the date of retirement. Cases
for revision of pension where ever due are processed quickly and revised
sanctions obtained from CCA.
I. Register of Works
(a) The total amount of monthly expenditure in an estimate under cash is posted in the register of works
so that a watch can be kept on the progress of expenditure against the
sanctioned cost.
(b) The registers are posted every
month from the ledger head register after submission of
the monthly accounts to the Circle IFA.
(c) After completion of the posting
for a month, the correctness is ensured by carrying out the reconciliation of
the monthly postings under cash with the
amounts booked under the monthly account (Trial Balance) for each
detailed head of account.
Misclassifications if any may come to light at
this stage and may be rectified by issuing journal slips
(d) After posting and reconciliation
for the month is over, a certificate to that effect should be furnished to the
Circle IFA. The work registers are now maintained in the form of loose leaf
Ledger or cardex system.
II. ACE-2 Accounts
As CAO(IFA) of the SSA in-charge of the works & Planning section, he should exercise
the following checks by calling for the necessary records every month and as
frequently as possible and review them with a view to ensure that --
1. The accounts are submitted in time by the field officers to the works
section. The temporary advances are utilized for the purpose for which they are
sanctioned and adjusted as soon as the disbursements, for which they were
sanctioned were made.
2.
The cases
of utilization for purposes other than for which sanctioned are brought to the
notice of the respective officers and also to the Head of SSA in case of
recurrences and the filed officers concerned are instructed suitably.
3. The accounts received are checked by the works section as per
instructions contained in Rules 229 to 239 of FHB Vol. III and
disallowances if any are justified.
4. The disallowances are rectified by the respective authorities either by
complying to the observations or by obtaining proper justification.
5. Interest as per corporate office
instructions is levied in cases of delayed submission.
6. The register of temporary advances is reviewed regularly by the
CAO/AO(works) at regular intervals and necessary action is taken in cases
of delays by calling for the wanting bills.
7 The imprests / Ty. advances are closed quarterly as required by the
instructions from
corporate office.
8 The amount returned by the field
officers as unspent balance is properly
accounted for by AO(Cash). The remarks given by the spending
authorities in respect of return of cash are got certified by the
AO(Cash).
9. The ACE-2 Accounts are checked in the SSA. The accounts and all the
vouchers and
enclosures may be subjected to
cent percent check and all the vouchers are initialed by the
JAO in token of having conducted the check.
10. The classification of expenditure on these accounts is checked by the
works section and
indicated correctly.
11. The bills are
countersigned by the competent authorities.
12. The expenditure incurred
has been with in
the financial powers of the officer countersigning
the bill. The approval of
competent authorities in other cases is obtained and kept with the
voucher.
13. A brief notice of each case of difference of opinion in the matter of retrenchment between the countersigning officer and the A.O will be
recorded with full particulars of reference by the latter in a Register to be
maintained by him. This register will invariably be reviewed by the
Circle Internal check parties at the time of each inspection and
commented upon in their internal check reports
submitted through the Circle Accountant to the Head of the Circle.
II Measurement Books
The Measurement
books are maintained to effect
payments for all works done otherwise
than by daily labor.
The payments are made on the
basis of the measurements made in these
books. The Para 10.2.8 of CPWD Account code
deals with recording of measurements and upkeep of the Measurement
Books. The Measurement book is maintained in
Form-23. Since payments to contractors for the
work done is effected through
Measurement Books, these are regarded as
very important accounting record..
As CAO/IFA of the unit, it should it be ensured
that
All the MBs of a particular division are numbered
serially
A register is maintained in Divisional Office Headquarters with the
following details.
i. Serial number of each book
II Name of the sub-division to which
the MB is issued
III Date of issue and
IV Date of return
The completed measurement books are returned promptly by the field
units.
Stock register of MBs is maintained in sub-divisions also showing the
names of the SDO and JEs to whom the MBs are issued.
Books which are, no longer in use, are withdrawn
promptly even though it is not completely written up.
A record of movement of MBs should maintained
in order to keep a track of MBs issued to different JEs of a sub-division.
The detailed measurements are recorded
only by executive subordinates who
are in charge of works and to whom the MBs have been supplied for the purpose.
as required vide Note-1 of Rule - 178 of FHB Vol.III, The measurements are recorded
neatly in the MB with the dated initials of the person making the measurement.
The entries should ordinarily be made
in ink. When it is not possible to do so, the entry should be made in
indelible pencil and the pencil entries should not be inked over.
In case of running bills a reference to the
previous measurements is given. If the job is completed, date of
completion is noted in the prescribed place. If the measurements are first and
final or on a running account, fact should be mentioned suitably against the
entries in the MB.
\
IV Procurement
Bills :
Purchase orders are placed by the tendering authority or other subordinate
officers duly authorized for the said purpose, in terms of the agreements had
with the suppliers. The purchase may be of one time transaction where first and
final bill is preferred by the
supplier. In some type of agreements, 5% or 10% of the
amount due is withheld as per the terms and conditions of the
agreement as a performance security
or warranty of the material. The amount so withheld is released after completion
prescribed period of warranty or installation and acceptance of
the items
duly obtaining a certificate of the performance
from the user.
Each set of measurement should contain the following entries
i. Bills for work done---
ii. A)a) Full
name of work as given in the Estimate.
iii. b) Situation
of work
iv. c) Name
of Contractor.
v. d) Name
and Date of Agreement
vi. e) Date
of Work Order to commence work.
vii. f) Date
of actual completion of work.
viii. g) Date
of Measurement.
ii. Bills for
supply of materials :
a. Name
of supplier
b. No. and
date of agreement or Supply order.
c. Details
of source of supply like from stock or by purchase from other source.
d. Dt. Of
written order to commence supply
e. Dt. of
actual completion of supplies
f. Dt. of
recording measurements.
· If a Measurement Book is lost, an immediate
report of the facts of the case together with an explanation of all parties
concerned responsible for the loss should be made promptly to the Chief
Engineer, who is empowered to sanction the write-off of the lost Measurement
Books.
On receipt of the bill
along with MB, the contents of the bill will be subjected to precheck with
reference to the respective entries in the MB before pass order. Thereafter the
bill with MB shall be sent to AO/AO for check and for issue of pay order.
IV. Procurement Bills
Purchase
orders are placed by the tendering authority or other subordinate officers duly
authorized for the said purpose, in terms of the agreements had with the
suppliers. The purchase may be of one time transaction where first and final
bill is preferred by the supplier. In some type of agreements, 5% or 10% of the
amount due is withheld as per the terms and conditions of the agreement as a
performance security or warranty of the material. The amount so withheld is
released after completion prescribed period of warranty or installation and
acceptance of the items supplied duly obtaining a certificate of the
performance from the user. While dealing with the bills of suppliers, several
points are to be borne in mind and following checks are to be carried out:
_ The supply of stores is in accordance with
the Purchase order.
_ Consignee particulars are in accordance with
the Purchase order.
_ Quantity is in accordance with the Purchase
order i.e., neither excess nor less
_ Rate of the stores supplied, Sales tax,
excise duty are strictly in accordance with the clauses in the
purchase
order and necessary
excise gate pass produced along with the bill.
_ The Security deposit (or performance
security) is available in the form of Cash or Bank guarantee. If not
available, it is to be
ensured that the firm is exempted from payment of performance security and
valid proof
is to be produced by
supplier in support of his claim for having exemption.
_ Inspection certificate issued by the Quality
assurance wing is enclosed.
_ Proof of dispatch like copy of Railway
receipt or parcel way bill is produced (in case of road transport,
necessary certificate of
receipt of stores from the consignee is to be enclosed in the bill.)
_ The supply has been made within the due date
(or the date duly extended by the competent authority) of
delivery. The date of
offering the stores for testing will be criteria for this purpose.
If the stores have not
been supplied on or
before the due date, liquidated damages at the rate prescribed in the purchase
order is to
be recovered.
Certificate of guarantee or warranty is enclosed.
_ Stores have been dispatched in accordance
with the terms & conditions of the purchase order. It has to be
ensured that in case of
supplies where freight is to be borne by the supplier, the material has been
sent on
"freight paid"
basis and the amount is not claimed in the bill.
_ Documentary evidence towards the cost of raw
material has been produced whenever price variation is
involved as per the
Purchase Order.
_ If the payment is for the first bill against
a purchase order, necessary indemnity bond is produced in the
prescribed proforma and
accepted by the competent authority and the latest income tax clearance
certificate
is produced if not done
earlier.
_ In case of a final bill, it is also to be
ensured that:
_ The bill is accompanied with the bill copy
payable challan issued by the consignee.
_ The bill has been claimed for the actual
quantity received by the consignee in good condition.
In some contracts, a
stipulation is made in the agreements that a part payment will be made on proof
of dispatch of stores. In case of some PSUs even 100% payment is made on proof
of dispatch of stores. In such cases, invoices, inspection reports, railway or
lorry receipts etc., are received by the paying officer even before the stores
reaches consignee or stores is received, but the packing cases have yet to be
opened. In such cases, terms & conditions in purchase orders/agreement
indents issued by the purchasing officers, consignee particulars, contract
period, documents received with the invoice or proforma bill, inspection report
of Quality assurance or departmental officer issued before packing etc., have
to be checked properly before authorizing payment. This payment has
to be treated as advance payment to contractor under the concerned schedule.
Whenever material is acknowledged by the consignee and goods received note or
necessary intimation is received by the stores accounts section, necessary
adjustment has to be made in accounts debiting the concerned head like India inventories, works in
progress etc. and crediting advance payment to contractor. The clearance of APC
should be reviewed every month and follow up action taken by making reference
to the suppliers and indenting officers.
Monitoring of Works Expenditure
Financial Stock Taking Reports
Financial stock taking report '(FST) is prescribed to examine the
progress of work and correlated expenditure against each component of each
project. These Financial Stock Taking Reports are prepared half yearly. The
reports are of very important nature, where the Accounts Wing (IFA & AO)
are to involve with executive for
correct preparation and certification. These FST reports
indicate physical targets, procurements, utilisation, percentage of work done
and correlated percentage of expenditure against each component.
Preparation of FST Reports
• The FST reports are drawn up in the
prescribed proforma in respect of all telecom projects costing Rs.5 crores and
above and submitted to the Corporate
Office twice a year for the period ending 30th September and 31st
March and should reach the by 30th November and 30th May respectively. The accuracy of the
information furnished in the FST reports will be duly verified by the Heads of
Circles and IFA attached to them and the
prescribed certificates of having carried out such check will be given
by them before submission to the HQ.
• The FST reports for projects costing Rs.1
crore and above but less than Rs.5 crores will also be drawn up in the same
manner as mentioned above. Such reports will be reviewed by the Head of Circle
and IFA attached to them very carefully. These FST reports are not however
required to be submitted to Corporate Office, but a consolidated
review report in the prescribed proforma will be submitted to it along with the
FST reports for projects costing Rs.5 crores and over.
• FST reports in respect of projects costing
between Rs.25 lakhs and Rs.1 crore will however continue to be reviewed by the
Head of Circle and IFA of the Circle concerned. No review on such reports will
be submitted to the Corporate Office.
Works in Progress
Major portion of works execution mostly relate to building, works,
installation of equipments under A&P, Erecting Lines & Wires, Masts
& Aerials, Laying of cables/fiber optical fiber cables. This expenditure is
booked initially under "works in progress" and whenever
"management certificates" are received certifying completion
of work, the expenditure will be transferred to "fixed assets"
for asset formation according to accounting policy.
In this connection it is imperative to ensure the "works in
progress" are completed well in time and converted into Fixed Assets. Only
when the work-in-progress is converted into asset, the claim for benefit of
"depreciation" can be obtained for Income Tax purpose. While the
work-in-progress should be completed at the earliest in any case, it should
also be ensured that more than one year oild item is not allowed to remain in
work-in-progress without valid reason.
Register of Works
Register of works is in one way form as Sub ledger of works expenditure
compiled from works vouchers, journal entries, schedules etc. This collective
record of the expenditure on works in SSA is maintained by them in form ACE-23.
This register brings together from month to month the total amount of cash and
adjustments
chargeable to each sub or detailed head of account included in an
estimate and thus enables a watch being kept on the progress of work and of
expenditure against the sanctioned amount of the estimate, and against the
amount allotted for the execution of the work. This register will be reviewed
by CAO/IFA and agree with booked figures in Trial balance.
Completion Reports
As soon as any work is completed, completion report in prescribed form
is prepared and indication is made against respective estimate in the Estimate
Register. This completion report will be subjected for scrutiny by IFA of the
unit. There should not be undue delay in release of Completion Report of any
work which has been physically completed. SSA head/IFA are required to keep
this important matter under constant observation and take such steps which will
ensure that delays do not occur.
Settlement of Outstanding CRs
The position of pending CRs will be reviewed by IFA of SSA and put up
the SSA Head with his observations. Statement of outstanding completion reports
will be prepared quarterly for scrutiny and necessary action by the Head of the
SSA/Unit. Completion report is different from "Management
Certificate". Management certificate will be issued as soon as a certain
portion of work is completed and ready for use according to Accounting Policy.
This certificate is only to facilitate capitalization of that portion as Fixed
Asset. The completion report is with reference to total expenditure on
completion of work as a whole in respect of certain detailed estimate, after
allowing any credit etc., This enables for review of excess expenditure etc.
over provision made, calling for revised estimate where necessary.
Budgeting and Cash Flow Management
1. Budget
Introduction
Budget is a best tool in the hands of management to overview:
• Funds Management
• Projects undertaken in the
business, its expenditure and its further requirement
• Exercising expenditure
control
• Assessing financial
capability of the organisation
• To modify / Augment the
business planning
Budget in
The budget in is compiled under three categories:
• Revenue Budget
• Capital Budget
• Cash Budget
The following tabulation will indicate the composition of different
Budgets:
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BUDGET |
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Revenue (Op.Exp) |
Capital (Cap.Exp) |
CASH |
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Requirement of fund |
Monthly Cash flow Statement |
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Salary |
Land |
For Operation Account Every 10 days |
Collection Accounts |
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Medical |
Building |
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Wages |
A&P |
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Overtime |
Elect. Instln |
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LTC |
Lines & Wires |
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Pension/Leave Salary Cont |
Cables |
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Maintenance Exp |
Subscr.Instnl. |
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Business Promotion & Mkg. |
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Budget Heads
Capital Works
: Schedule
105 to1 07 - Fixed Assets
Schedule 114 to 116 - Works in Progress
Operating
Expenses: Schedule 150 to 166 - Remuneration
Schedule 171 to 185, 192 - Office & Administration
Schedule 189 to 191 - Depreciation
Schedule 195 – Interest
Capital Works Programme
• The capital works programme
containing proposals for budgeting of the capital works to be submitted to
Corporate Office, during Feburary in the forms 'A','B' and 'C'.
Capital Works Programmed (February)
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The capital works programme should be
thoroughly scrutinized before submission to the corporate Office by the
planning branch and the IFA of the circle office.
Capital Budget
Capital Expenditure in primarily relates to Acquisition of Land,
Constructing Telephone Exchanges, Procurement of equipments, Line and Wires,
Laying of cable etc.
Formulation of RE/BE
Points to be kept in view while formulating
Budget-Estimates are:
• The necessity for
individual projects, newly proposed as well as works –in progress should be
fully examined from the point of view of the relevance of the project to the
expansion or improvement of the network, the essentiality of the specific
project and its profitability.
• The works-in-progress may
turn out to be not relevant and therefore not justifying further expenditure
for the following reasons.
(i) Prolonged gestation of the
projects concerned.
(ii) Recent developments, like policy decisions
regarding changing technology, such as digitalization,
change in
Product-mix, from factories, like phasing out of electro-mechanical system etc.
• Decision should be taken in
such cases regarding abandoning of the project, taking care to find ways and
means of salvaging the investment already made.
• In case of projects which
have been included in the Demand-for-grants after the above scrutiny, the
listing may be done on the basis of priority, so that the directorate could
decide about any possible deletion in the context of inadequacy of allotment of
funds.
• In the case of works
costing less than Rs.5 Cr each, where a lump sum allotment is asked for, a
similar exercise, as mentioned above should be under taken so that only
essential and remunerative projects are included in the programme.
• The above mentioned
exercises should be conducted by both the planning and
budget branches jointly.
RE/BE Statements in respect of Capital works is to be submitted to CO, in forms 'A' to F during September.
STATEMENT “A”
a. Works costing Rs.5 crores and above each (WIP & New works ) which
are already sanctioned should be included. Instructions issued from time to
time regarding Zero based budget may be taken into account in framing these
estimates. Whenever a Budget project (new works or WIP) is proposed to be
dropped reasons for the same may please be given against the entry concerned
item.
b. Care should be taken to give “sanctioned estimated cost” component
wise with reference to the project estimate sanction only. The practice of
giving the sanctioned cost with reference to detailed estimates leads to
confusion.
c. The sanctioned cost, expenditure and funds requirements be shown
component wise strictly in columns prescribed. At the same time the
total sanctioned cost, total expenditure and total requirement for each work
should be indicated at the foot of the entry under each of the columns.
d. No demand under Stores may be made as there is no store item in
Corporate set up.
STATEMENT ‘AA’
This will include service wise, account head wise and component wise
consolidation of demand in respect of works included in Statement “A”. The
statement is found necessary as the circles carry the demand under Category “A”
to the consolidation of total demand and it has not been possible to verify the
correctness of such carry over conveniently within a short time and to compile
important analysis of demand.
STATEMENT ‘B’
a. Lump sum requirements for works costing less than Rs.5 crores
including all overheads should be included. The requirement should be arrived
at after consolidating the work wise demands. But work wise details need not
be furnished in the copies or statement sent to Corporate office.
Demands may be compiled and minor head wise and vertical and horizontal columns
total should be struck.
b. From the year 1996-97 onwards the expenditure incurred on the
provision of Village Public Telephone is to be classified separately
under the new head of account 1150600.
STATEMENT ‘C’
The requirement of works originally estimated to cost less than rs.5
crores (including all over heads) each but where the expenditure has exceeded
Rs.5 crores should be included. Revised sanctions should invariably accompany
or reasons as to why the estimates could not be revised should be indicated. It
may be ensured that the requirements for these works are not included in
Statement “B”.
STATEMENT ‘D’
This is the final consolidation.
STATEMENT ‘E’
Material input wise break up of requirements
on capital works should be furnished in duplicate separately for the total
projections made. The requirement is to be worked out based on physical targets
under different schemes for current year and for ensuing year.
STATEMENT ‘F’
This is the statement showing the
profitability of projects under Capital works to enable the to assess the expenditure on non remunerative
projects for the purpose of “USO” funding.
Allotment of Funds for Capital Works
Expenditure:
• The funds for Capital works expenditure
comprise -
(i) Specific provision for each project
costing Rs.5 Cr and above.
(ii) Lump sum provision for all other works.
• This distinction made in the budget
determines the method by which allotments are placed at the disposal of the
various authorities for execution of works.
• Funds for major works, costing Rs.5 crores
& above are allotted by the Corporate Office to Heads of Circles according
to the components of each project.
• In respect of all other works, allotments are
made account head-wise in lump.
• Allotments of funds are made, subject to the
following conditions:-
a) That no appropriation of funds is to be made against any unsanctioned
detailed estimate.
b) That no appropriation of funds is made beyond 10% of the sanctioned
cost of a detailed estimate, and
c) That no appropriation of funds is made which has the effect of
exceeding the sanctioned cost of the project beyond 10%
Expenditure Control
The Corporate office is ultimately responsible for controlling the whole
expenditure against the sanctioned grant and in turn Heads of Circles are
required to cooperate in the exercise of this control. Control in relation to
budget allotments:
EXPENDITURE CONTROL
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(i) That expenditure should not be incurred under any head in
excess of the funds allotted.
(ii) That if any time it becomes apparent that there is likely to be a
surplus under any head, then the
amount of the probable excess must
be promptly surrendered.
These two objects can be attained only by the adoption of a systematic
watch over expenditure and by a monthly comparison with grants. For purpose of
control every administrative officer should insist on the submission by each of
his subordinate officers amongst whom he subdivides his allotment of a regular
monthly basis. The same can be watched through the registers and various
statements prescribed.
Non Budgeted Works (Project Costing 5 Crores
& Above)
Works not provided for in the sanctioned
budget are termed as “Non-Budgeted works. No expenditure can be
incurred on Non Budgeted works with out the prior approval of the competent
authority. In case of urgency, recourse can be had with the approval of the
competent authority.
Demands for funds for execution of projects beyond sanctioned cost
In some cases funds are demanded in BE/RE/FG for individual projects
beyond the sanctioned cost, stating that the revised project estimates are
under preparation. Orders of the are
clear that funds cannot be allotted beyond the sanctioned cost.
Since the projects should not be starved of funds during advanced stages
of execution, it has been decided that as soon as the expenditure on a project
reaches the level of 75% of the sanctioned cost, a review should be under taken
to examine if the project can be completed within the sanctioned cost. If it is
anticipated that the cost is likely to go beyond 10% of the sanctioned
estimate, immediate action should be taken to prepare a revised project
estimate and have it sanctioned well in advance.
Revenue Budget
The Revenue receipts and Working Expenses are forecasted and worked out
and RE/BE statements are compiled in Annexure-A, B and C.
Annexure-A (Working Expenses):
The Estimation is projected in Part-A and Part-B distinctly for
Employment (Remuneration) and expenditure on Office and Administration
respectively. The actual expenditure for last three years are taken for
comparison. The actual for the first four months of current financial year and
estimation for remaining eight months are worked out. The estimation for BE is
also worked out and projected. While furnishing requirements of
funds care is taken to provide pension and leave salary contribution of
employees. Instructions are issued by HQ
from time to time for compiling the RE/BE statements keeping in view of economy
measures and control of expenditure.
Annexure-B (Revenue Receipts)
The Estimation of revenue is worked out on the basis of number of
telephone lines, telex lines, WLL lines and CMTS by applying average revenue
for such lines. A target of additional lines for the current year and also the
expansion programme for ensuing year are taken into account for estimation of
revenue receipts.
Annexure-C (Establishment Expenditure)
The Establishment expenditure on salary is estimated in relation to the
actual / estimated number of posts. Proposals for creation of new posts are
also taken into account for estimation of salary expenditure.
New Items of Expenditure
No provision for new expenditure may be included in the budget without
the prior approval of competent authority. All proposals for new expenditure
will be submitted for the approval of the competent authority. All proposals
for new services, expansions to existing services expenditure and proposals for
additional expenditure likely to involve excess over grants necessitating an
application for a supplementary grant should be placed in the statement. No
expenditure should be incurred without the approval of the competent authority.
It is most important that proposal involving new expenditure that it is desired
to introduce during any particular year, should be submitted in ample time
before the prescribed date to admit of their being fully considered and
approved and taken into
account for purposes of the preliminary schedule of demands relating to
that year. In preparing this statement of new items of expenditure should be
made in respect of increase which is of a permanent nature and those which are
seasonal or temporary. These should be grouped separately.
Cash Budget
The Cash requirement of each SSA and Circle HQ are forecasted once in 10
days against Capital and Working Expenditure with reference to proportionate
Budget Allotment. Funds are released by Corporate Office after scrutiny of
requirement through banking channel. This arrangement gives effective control
on spending units for regulating the expenditure within budget allotment.
Monthly cash flow statement of Collection Accounts is prepared & sent by
SSA to Circle Office. Circle Cash flow statement of Collection Accounts is prepared
by Circle & sent to Corporate Office. It will ensure smooth flow of funds
from SSA/PAU/Circle to Corporate Office.
Cash Flow Management
1. Introduction:
Cash, the most liquid asset, and also referred to as the life blood of a
business enterprise is of vital importance to the daily operations of business
firms. Its efficient management is crucial to the solvency of the business
because cash is the focal point of the fund flows in a business. 'Cash' refers
to the cash as well as the bank balances of the company at the end of the
accounting period, as reflected in the balance sheet of the company. While
profits reflect the earning capacity of a company, cash reflects its liquidity
position.
What is Cash?
There are two ways of viewing the term 'cash'. In a narrow sense, it
includes actual cash in the form of notes and coins and bank drafts held by a
firm and the deposits withdrawable on demand. And in a broader sense, it
includes even marketable securities which can be immediately sold or converted
into cash.
2. Need For Cash Management:
• Transaction Motive
A company is always entering into transactions with other entities.
While some of these transactions may not result in an immediate inflow/outflow
of cash (eg: Credit purchases and sales), other transactions cause immediate
cash inflows and outflows. So firms always keep a certain amount as cash to
deal with routine transactions where immediate cash payment is required.
• Precautionary motive
Contingencies have a habit of cropping up when least expected. A sudden
fire may break out, accidents may happen, employees may go on strike, creditors
may present bills earlier than expected or debtors may make payments later than
warranted. The company has to be prepared to meet these contingencies to
minimize its losses. For this purpose, companies generally maintain some amount
in the form of cash.
• Speculative motive
Firms also maintain cash balances in order to take advantage of
opportunities that do not take place in the course of routine business
activities. For example, there may be a sudden decrease in the price of raw
material which is not expected to last long or the firm may want to invest in
securities of other companies when the price is just right. These transactions
are of a purely speculative nature for which the firms need cash.
• Lack of proper synchronization
between Cash Inflows & outflows
In the case of reasonably well-managed profitable companies, the total
amount of cash inflows for the year is usually higher than the total amount of
cash outflows. However, the company can have spells of cash deficits and
surpluses. This kind of a situation arises mainly due to lack of proper
synchronization between cash inflows and outflows. Seasonal industries such as
tea, jute are typical examples for mismatching of inflows and outflows.
• Asymmetry in the consequence
of 'shortages' and 'surpluses' of cash
An argument comes out with an interestingly that the Finance Manager is
more worried about the situation of an 'uncovered cash deficit' than the
situation of surplus cash lying idle in the bank. This attitude on the part of
the Finance Manager is quite understandable as the deficiencies in cash
management are more likely to come out into the open during a period of cash
crunch than in a period of cash surplus. As the opportunity loss sustained by
the company for keeping excess cash at bank is not likely to affect all
sections of the employees while inability to meet wages and salaries
does, the Finance Manager may feel tempted to err, if at all, on the
conservative side. This will have the impact of the need for additional cash
lying in bank.
3. Objectives of Cash Management:
All or some of the reasons explained above give rise to the company's
need for cash. The question will naturally arise as to the amount of cash to be
maintained by a company. While trying to answer this question, one should not
lose sight of the fact that cash is the most liquid of all the assets and can
be put to alternative uses. So, idle cash has an opportunity cost as they could
have been invested to fetch a positive return. Thus the objective of cash
management can be regarded as one of making short-term forecasts of cash
position, finding avenues for financing during periods when cash deficits are
anticipated and arranging for repayment/investment during periods when cash
surpluses are anticipated with a view to minimizing idle cash as far as
possible. Towards this end, short-term forecasts of cash receipts and payments
are made in the structured form of cash budgets, information is monitored at
appropriate intervals for the purpose of control and taking suitable measures
as arranged by the situation.
4. Factors of Efficient Cash Management:
Cash reports help in monitoring actual data for comparison with the
budgeted amounts, understanding the reasons for the deviation between the two
and in the light of this knowledge, controlling and revising the budget on a
regular basis. The efficiency of cash management can be enhanced considerably
by keeping a close watch and controlling a few important factors briefly
described and illustrated below.
Prompt billing and mailing
A time lag occurs from the date of dispatching goods to the date of
preparing invoice documents and mailing the same to the customers. If this time
gap can be minimized early, remittances can be expected, otherwise remittances
get delayed. In case of one organization, it had been observed that the time
lag was as high as one week. Subsequent scrutiny revealed that the reason for
delay was due to the practice of preparing bills and mailing them in 'bunches'.
As a result, the bills on earlier ales got delayed resulting in late
realization. Once the reason for the delay was identified, corrective measures
were taken to prevent the bunching bottleneck of bills. This resulted in the
reduction of delay in remittances. Thus accelerating the process of preparing
and mailing bills will help reduce the delay in remittances and early
realization of cash.
Collection of cheques and remittance of cash
Delay in the receipt of cheques and depositing the same in the bank will
inevitably result in delayed cash realization. This delay can be reduced by
taking measures for hastening the process of collection and depositing
cheques/cash from customers. Here also an example will help in understanding
how this can be achieved. An organization having branches in all the districts
of West Bengal had been selling fertilizers to a great extent by a vast network
of consignees who will get a margin for the services rendered. Quite often the
consignees were making remittances to the Head office in Calcutta resulting in
delays in realization of cash. An in-depth study revealed that delays can be
considerably reduced by adopting the following procedure:
• The consignees should be asked to prepare
challan-cum-invoice on credit sales which would cut-short the work of raising
separate bills.
• Non-operating collection accounts had to be
opened in the district level branches of the Head Office bank into which
cheques and cash from sales are to be deposited by the consignees, under advice
to the Branch Manager. The amounts so deposited are to be transferred to the
main bank account of the Head Office telegraphically, under advice to the Head
Office. The Branch Managers/their assistants should make occasional visits to
the bank branches as also to the consignees for ensuring compliance with the
instructions issued.
The above procedure considerably reduced the delay in receipts with a
resultant decrease in the incidence of interest on the cash credit account of
the Head Office.
Centralized purchases and payments to suppliers:
The Company can get some advantages, as listed below when purchases and
payments to suppliers are centralized at Head Office.
• By the sheer size of purchase there is a
scope to obtain bulk purchase discounts on certain items which will effectively
reduce the cost.
• As cash receipts get consolidated at the Head
Office, the disbursement schedule can be more effectively implemented. As far
as possible, the company can make an arrangement with suppliers so that the
payment schedule matches with the schedule of cash receipts.
• As far as possible, cash discounts on
purchases can be utilized, preferably by remitting cheques on the last day for
utilizing such facility. This will release cash within the discount period and
the company6 can also avoid the implicit rate of interest underlying the
failure to avail cash discount as this rate will be considerably high.
• Under the centralized purchase system,
arrangements can be made with the suppliers for direct shipment of materials to
the company's units located at different parts. This will reduce to some extent
the total cost of transportation, handling and storage.
5. Treasury:
The treasury in the finance department deals with liquid assets and thus
the treasurer has a major responsibility of being a custodian of cash and other
liquid assets. The other functions of the treasurer are:
• Formulate capital structure for the organization
in accordance to business goals and implementation of the same.
• Management of liquid assets including cash.
• Acting as a Cashier
• Role of an authorized signatory on payment of
cheques including the authority to approve such cheques.
• Reconciliation in checking accounts.
• Overall management of the credit functions of
the firm.
• Authority to utilize surplus cash of the
company in short term beneficial investments.
• Establishes the company policy with respect
to decision on trade discounts and vendor payment aging.
• Establishing relationship with the Bankers
and investors.
All the above functions are implemented by the treasury with the
cooperation of the Cash manager, finance manager and the credit manager.
Controlling Functions:
Just as the treasurer deals with the liquid assets, the controller of
the organization has to record the transactions of these liquid assets. It is
the combined and effective working of both the departments that gives rise to
an effective system of internal controls. Some of the functions of the
controller are:
• Records all the transactions in the general
ledger, the accounts receivables and the accounts payables sub ledger,
transactions with respect to fixed assets such as depreciation, inventory
control etc.
• Looks into the aspect of taxes and insurance.
• Keeps track of the company's short-term
investments by recording and reconciling the transactions with those of the
brokerage firms.
• Looks into the regulatory aspects and
implementation of the company's policy on trade discounts and receivables
aging.
• Acts as a Planning director
• *Keeping a record of the attendance of the
employees, their movement timings so as to facilitate in preparing pay roll.
• Reporting information to the management. To
assist the controller in accomplishing the above are the Tax Manager, Data
Processing Manager, Cost Accounting Manager and Accounting Manager. Thus, the
function of financial accounting, internal audit, taxation, management
accounting and control, budgeting - planning and control are accomplished.
6. Other Aspects:
The size of the treasury depends on the size of the organization. Big
companies usually the public limited companies and large private sector giants
may have the structures as mentioned above or similar to it. However, small
fledging organizations usually have the Directors to take major policy
decisions and fulfill the role of both the treasurer and controller. He will
have the Finance Manager, Accounts Officer and cashier to look into the aspects
of the implementation and thus assist him or even in some cases some of the
officials are responsible for more than one of the above listed functions. Once
the rules and regulations are framed in respect of various functions of the
treasury, it is important that these standards of accounting and control are
properly implemented and strictly adhered to.
Cash Flow SSA Statement
a) The IFAs of the SSAs/PAUs are having much important role to play in
ensuring that the funds collected at various collection centers in the
SSAs/PAUs reach the Corporate Office with minimum possible delay through the
Focal point branch. But it is observed that the funds that have been collected
are not reaching the Corporate Office expeditiously. The factors adversely
affecting smooth funds flow and remedial measures suggested are indicated in
the enclosed 'APPENDIX'.
b) With a view to strength the hands of IFAs to exercise more control on
certain sensitive areas, a revised format called ' Cash Flow SSA
Statement' has been designed along with 2 Annexure. These formats have been
prescribed keeping in view the requirement of pursuit action to be taken at SSA
level and to give feed back to circle and Corporate Office. The formats have
been designed in a simplified manner that the data can be complied with ease,
soon after closer of collection cash/bank books.
c) This statement is to be prepared by each of the Primary Accounting
Units/SSA in triplicate, along with Annexure A and Annexure B furnishing
specific review remarks, wherever, they are prescribed. Two copies of the
statement are to be forwarded so as to reach Circle Office by 10th of the following month, retaining the other
office copy.
d) The IFA of the SSA/PAU should constantly monitor to ensure that:
i) All collections are remitted to bank on the same day by arranging
special remittance in the evening if need be, with the cooperation of /
coordination with the banks by ensuring that minimum cash balance only is kept
in office at the end of the day,
ii) Cheques / DD received are deposited into bank on daily basis and
their clearance are periodically watched with an ultimate aim of keeping the
un-cleared items always at less than 3 months old and in any case not beyond 6
months, as the validity of any instrument is 6 months only( For Govt. Cheques
it is 3 months) iii) The banker remits the total amount ( cash remitted to bank
plus amount cleared buy it) to Focal point branch in such a way, that the
closing balance at credit in collection account in the bank at the end of the
day should be less than Rs.1000/-, failing which , interest is to be claimed on
the amount in excess of Rs.1000/-
iv) Special efforts are to be taken to liquidate excess debit/ clear
excess credit, by deputing a responsible officer / go himself to the Bank so
that these items should not appear / continue in the next month.
Cash Flow Circle Statement along with an annexure
a) The information as received from SSAs/PAUs vide para 3 above is to
be consolidated in the Circle Statement striking the totals of each column, to depict the status of the Circle as a whole and
forward it to " the Dy. Director General (BBF) Room NoB:-501, Statesman
House, 148 Barakhamba Road, New Delhi 110001, So as to reach by 15th of the
following month. The statement for April, 04 should reach this office by 17th May, 2004 along with the annexure; and one
copy of statement received from SSA/PAU along with Annx A and B, retaining the
other as office copy.
b) The Circle IFA will review the statements received from SSAs/PAU
along with annexure A&B and satisfy himself about the remarks furnished by
the IFAs of the SSA/PAU, and on the status of the work of the SSA/PAU
particularly keeping in view the instructions contained in para 3 above and
furnish clear remarks in the Cash Flow Circle Statement against the SSA/ PAU
concerned, besides indicating the nature of action taken against erring units
to bring the position up-to date, So as to appraise the position to the
Director (Finance). The Circle IFA will further review and arrange to ensure
that the Focal Point Branch remits the amount to Corporate Office New Delhi branch
on daily basis, of all amounts in excess of Rs.1000/-
( HQ.No 1-1(2)/BBF-/Cash Flow Stt. /2004-05 Dated 25th March, 2004)
APPENDIX
FACTORS AFFECTING SMOOTH FLOW OF FUNDS FROM
SSAs/PAUs AND SUGGESTIONS FOR IMPROVEMENT.
|
SL |
Factors affecting smooth funds flow |
Remedial measures suggested/ Nature of
corrective actions to be taken by the IFA of the
SSA/PAU |
|
1 |
Retention of heavy cash balances in office |
a) Every effort should be made to remit the entire collections of the
day, to the bank on same day. If not, collections made up to a specified time
should invariably be remitted to Bank. b) Proper liaison is to be maintained with the bank so that more than
one remittance can be made during the day, to keep the minimum cash balance.
Evening Counters if any available may be utilized for making remittance of
money. c) The cash collected after making last remittance of the day, should
invariably be remitted on the next working day. |
|
2 |
Delay in clearance of Cheques deposited in to bank |
a) Bill collection
systems wherever computerized should be in a position to print the challans
with reference to Code Names of the bank already fed into
computer system. On closure of day's transactions, Cheques are to
be attached to the printed challans and remitted to bank. b) Arrange to prepare
separate challans for Banker's Cheques / Cheques issued on the same branch,
so that these can be cleared on the same date. Mixing up of outstation
Cheques with these instruments may some times contribute for delay for
clearance of total amount of the challan. c) If the volumes of
cheque received are more, preparation of separate challans for each bank
under same bank code will quicken the process of clearing. d) Arrange to obtain
credit scroll/bank statement at frequent intervals , depending on size of
transactions and tendency, e) The register of
Cheques received / deposited in to bank and cleared (ACG 28) is to be |
|
3 |
Excess debit adversely affecting funds position |
a) Collections account will have debits on account TT sent and bank
charges (in respect of SBI). Any other debits including regularization of
earlier excess credits should be properly explained in the bank statement.
Immediately on noticing of such debits, necessary accounting adjustments must
be made/ the case must be taken up with the bank for rectification. Immediate
attention is required to be paid, as any delay may ultimately leads to frauds
and non-availability of records. b) Cheques issued by the unit might have been wrongly debited by the
bank in collection account instead of in operation account. Non-pursuance
with bank will affect bank reconciliation work of both collections and
operation accounts. |
|
4 |
Excess credit |
Normally no bank gives excess credit. Such things may occasionally
happen due to clerical mistakes, which can be rectified by a simple visit/ a
phone call to bank. The banker will not give any credit under the
nomenclature "excess credit". It is the SSA/PAU that finally arrives
at this amount after pairing the credits as available in the bank statement
(and credit scrolls given separately if any) with the Register of Cheques
received, deposited and cleared. The possible excess credits are generally
due to: a) Mis-match of amount credited with the amount contained in the
challan. The bankers at both the ends might have deducted charges and
credited for a lesser amount than the amount indicated in the challan for '
outstation Cheques'. The banker is to be approached to supply details and difference
if found within the tariff, can be classified to ' bank charges' and the
total amount can be cleared. b) Non-furnishing of details of credits given.
The SSA may find it difficult to pair the lump credit given by the bank, without furnishing details properly.
Pursuance with bank for getting of challan wise/ credit wise details solves
the problem. c) Mixing up of credit of other units working in the same station / other
Govt. Depts.: In stations where there are more than one unit and if the accounts of all of them are
maintained in the same bank, the banker might have wrongly credited the
collections of one unit (say electrical, civil, maintenance, projects,
factory, stores etc.,) into another account. Immediate pursuance with bank
will solve the problems of both units. |
|
5 |
Bank charges |
Any excess of bank charges over the scheduled tariff will have an
impact of reducing the credit balances of . Such cases are to be reviewed and
pursued with bank for regularization. |
|
6 |
Delay in transfer of Funds by link branches by retaining funds with them |
a) Cash remitted by units and
amount cleared by bank in respect of Cheques/ DD remitted to Bank forms
credit balance in collection accounts. This amount in excess of rupees
1,000/- is required to be remitted to Focal point branch for outward
transmission to the accounts of Corporate Office. It is observed that most of
the Link Branches are not promptly remitting the amount, particularly on
Fridays, in order to maintain their cash reserves. This is adversely
affecting the funds position of corporate office, as they become the main
sources of revenue. The IFAs of the SSAs/PAUs should monitor to ensure that
banks remit the TT promptly. b) Any delay in clearance of Cheques / DD deposited into Bank; heavy
retention of cash in collection accounts, attract interest. The IFAs are
therefore required to monitor the position and claim interest in all cases of
delay, so that not only earns interest
, but also brings pressure |
|
7 |
Time limit of clearance of Cheques / DDs deposited in to collection account |
As per Negotiable Instruments Act, the validity of any instrument is
only 6 months from the date of issue (3 months for Govt. cheques from the
first of following month). It is seen that in some SSAs/PAUs, Cheques
deposited into collection accounts from October 2000 Onwards are still shown
under "Cheques deposited into bank but not cleared". The IFAs of
SSAs/PAUs should continue to review all cases where the validity exceeds the
prescribed time limit, take proper action to write back them after getting necessary
confirmation from banks besides taking action to recover the dues from the
concerned parties and ensure that no outstanding should be more than 6 months
old. |
|
8 |
Dishonor of Cheques |
This is an important area, which affects the revenue of . As per
existing orders, Cheques cannot be accepted from the persons whose Cheques
are frequently being dishonored and their names are to be black listed. When
Cheques are dishonored immediate action should be taken to get the amount realized besides passing necessary entries in records. |
Accounting Standards
Accounting Standards:
If accounts is the language of business, Accounting Standards may
be stated to be the grammar of that language. These established standards that
are mandatorily to be complied with to ensure that financial statements are
prepared in accordance with the generally accepted accounting practices and
that auditors carry out their audits also accordingly. Accounting standards
provide for appropriate disclosure norms to add value to the preparation of accounting
statements. The need for accounting standards flows directly from the
objectives of financial statements and reporting. Accounting standards address
the core issue of information needs of the stakeholders in a business.
Accounting standards are also an effective way of ensuring managements’
compliance to ethics, consistency and business transparency. It is also
important to note that the Accounting Standards are supplementary to the laws
of the land and do not substitute their provisions in any manner.
Accounting Standards are therefore
• Guidelines to direct as to how the items
which go to make up the financial statements should be dealt with in Accounts
and presented in the Annual Accounts
• Norms of Accounting Policies and practices by
way of codes i.e., codification of Generally accepted Accounting principles
• Provides a structural framework within which
credible financial statements can be produced
Objectives of Accounting Standards
• Brings about uniformity in financial reporting
• Ensures consistency and comparability in the data published by the
enterprises
• Consequently enhances the Quality and the degree of dependability
of the financial statements
Significance of Accounting Standards
• Useful to investors assessing the yield and
risk of alternative investments
• Will raise the standards of the audit in its
task or reporting on the financial statements
• Meaningfulness of the numbers in the
accounting reports for the purpose of economic planning, market analysis etc,
• Confidence that user groups have in the
fairness and reliability of the financial statements
Accounts to comply with Accounting Standards
The Companies (Amendment) Act, 1999 has prescribed this
requirement by amending Section 211 that every profit and loss accounts and
balance sheet shall comply with accounting standards. It is further provided by
the amendment that if there is any deviation from the prescribed standards, the
annual accounts shall state:
1. The fact that there has been a deviation,
2. The reason for such deviation, and
3. The financial implication of the deviation.
is further provided by the amendment that for the purposes of this
section ‘Accounting Standards’ means such standards of accounting recommended
by the Institute of Chartered Accountants of India as may be prescribed by the
Central Government in consultation with the National Advisory Committee on
Accounting Standards.
List of Accounting Standards
• Disclosure of Accounting Policies (AS-1)
• Valuation of Inventories (AS-2)
• Cash Flow Statements (AS-3)
• Contingencies and Event occurring after the Balance Sheet Date
• Net Profit or Loss for the Period, Prior Period Items and Changes
in the Accounting Policies (AS-5)
• Depreciation Accounting (AS-6)
• Construction Contacts (AS-7) Revised
• Accounting for Research and Development
(AS-8)
• Revenue Recognition (AS-9)
• Accounting for Fixed Assets (AS-10)
• Accounting for the effect of changes in
foreign exchange rates (AS-11)
• Accounting for Government Grants (AS-12)
• Accounting for Investments (AS-13)
• Accounting for Amalgamations (AS-14)
• Accounting for Employee Benefits (AS-15)
• Borrowing Costs (AS-16)
• Segment Reporting (AS-17)
• Related Party Disclosures (AS-18)
• Leases (AS-19)
• Earning Per Share (AS-20)
• Consolidated Financial Statements (AS-21)
• Accounting for Taxes on Income (AS-22)
• Accounting for Investments in Associates in
Consolidated Financial Statements • (AS-23)
• Discontinuing Operations (AS-24)
• Interim Financial Reporting (AS-25)
• Intangible Assets (AS-26)
• Financial Reporting of Interest in Joint
Ventures (AS-27)
• Impairment of Assets (AS-28)
• Provisions Contingent Liabilities and
Contingent Assets (AS-29)
Questions in Accounting Standards
1. What do you understand by Accounting Standards ?
2. What are the Objectives and significance of Accounting
Standards ?
3. What is the relevance of Sec 211 of the Companies Act 1956 in
relation to
Financial Statements ?
4. What are the Accounting Standards issued by the ICAI and
notified by the GOI
so far ?
5. “ If accounts is the language of business, Accounting Standards
may be stated to
be the grammar of that language” Comment ?
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