ICAI, Railways ink pact for accrual-based financial statements

Chartered accountants' apex body ICAI today signed an agreement with the Indian Railways for moving its accounting system to the accrual format.
"Accrual based financial statement will support Indian Railways in better utilisation of available resources, estimation of future liabilities and prioritisation of spending.
"It will also pave way for best financial management practices to be introduced in Indian Railways," ICAI said in a release.
The pact is for "introducing the accrual-based financial statement as an additional set of accounts to existing cash-based government accounts".
It has been entered into between ICAI Accounting Research Foundation (ICAI ARF) and the Indian Railways. The foundation is the research arm of the Institute of Chartered Accountants of India (ICAI).

Accrual system of accounting would provide a better picture of the particular entity's financial position.
A pilot project for introduction of accrual-based financial statement as an additional set of accounts at North Western Railway at Jaipur (Rajasthan) and Rail Coach Factory at Kapurthala (Punjab) was successfully implemented by ICAI ARF, the release said.