OVERVIEW OF GOVERNMENT ACCOUNTING STANDARDS Presented by Shefali S Andaleeb Principal Director O/O CAG of India

Overview of the session and session objective  Government Accounting framework and policy- theoretical precept  Role of GASAB  Introduction to IGAS and IGFRS  Questions and comments 23/11/2015 2

Government Accounting-1 The Premise In public financial management cycle, accounting follows budgeting and precedes auditing A measurement of financial consequence of actual transactions and events- regulated by rules to ensure quality of inputs and outputs of accounts 23/11/2015 3

Government Accounting-2  Situation as it exists…  In commercial context  Accounting in dual contexts : internal ( budget, cost, performance evaluation), external ( financial reporting)  Dichotomy not appropriate in government accounting  Budgeting : political process  Accounting : budget control and budget reporting  Financial accounting : comparatively recent emergence in public sector 23/11/2015 4

Government Accounting-3 The conflict Business-oriented financial accounting not deferential to the rules of government budgeting, thus the potential for misunderstanding and conflict Budget rules founded on Law, budget accounting follows budget rules 23/11/2015 5

Government Accounting-4  The solution Financial Accounting Rules / Standards Defined by concern for credible and comparable financial information Recognised standard setting process / Body 23/11/2015 6

Features of a typical Government Accounting Framework  Accounting structure which provides an authoritative basis to governments to :  Asset ownership, effective control, and protection of economic value of public property  Types, Amounts, Timing of public debt and other obligations- inlcuding uncertainties if any  Assess financial condition and perfromance 23/11/2015 7

Purpose and Scope  Scope : applicable to all public authorities whihc are ”accounting / reporting entities”  Purpose: ensure consistent application of Standards for presentation of financial information 23/11/2015 8

Structure and Role of GASAB  Constituted by C&AG of India in August 2002 with the support of Governement of India  Board Chair : Dy CAG (GA)Member Secy: DG/PD, GA Members Financial Commissioner, Railways Member Finance, DoT Secy, Deptt of Posts CGDA CGA ADS/JS, MoF RBI, NCAER, ICAI, ICWAI 23/11/2015 9

Structure and Role of GASAB  Formulate and improve standard of government accounting and reporting  Formulate and propose standards that improve usefulness of financial reports  Keep standards current  Provide implementation guidelines 23/11/

OVERVIEW OF GOVT ACCOUNTING AND REPORTING STANDARDS Indian Government Accounting Standards (IGAS) formulated by GASAB are for cash system of accounting Indian Government Financial Reporting Standards (IGFRS) accrual basis accounting standards alongside cash basis standards. The accrual basis standards are issued initially as recommendatory for pilot studies on accrual accounting 23/11/

Notified Standards IGAS 1 Guarantees given by Governments: Disclosure Requirements IGAS 2 Accounting and Classification of Grants in Aid IGAS 3 Loans and Advances made by Governments 23/11/

Standards Under Consideration IGAS 9 Government Investments in Equity IGAS 7 Foreign Currency Transactions and Loss and Gain due to Exchange Rate Fluctuations IGAS 10 Public Debt and other Liabilities of Governments:Disclosure Requirements 23/11/

Reporting Standards Under Consideration IGFRS 1 Presentation of Financial Statements IGFRS 2 Property Plant and Equipment IGFRS 3 Revenue from Government Exchange Transactions IGFRS 4 Inventories IGFRS 5 Contingent Liabilities and Assets : Disclosure Requirements 23/11/

Questions and Comments THANK YOU 23/11/