The 165-year-old Indian Railways will usher in its most profound accounting reform since Independence as it prepares its financial statements for the current fiscal under the accrual-based accounting system, the process widely followed by the corporate sector.
Railways has been preparing its financial statements through the dated cash-based accounting system. It will continue to prepare cash-based accounts as that is a constitutional requirement. But the shift to the accrual system gives a more accurate financial picture of an organisation. Accrual-based accounting is being rolled in the railways in association with the Institute of Chartered Accountants of India (ICAI).
“As a part of accounting reforms, accrual-based financial statements will be rolled out by March, 2019. Around 130 chartered accounts placed in the field by ICAI are assisting the roll-out,” a senior railway ministry official said.
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