TaxTMI 
TaxTMI 
Indian Government Accounting Standards (IGAS)2, - “Accounting and Classification of Grants-In-Aid.”
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...."Accounting and Classification of Grants- In- Aid." 2. The Indian Government Accounting Standards, (IGAS) 2-"Accounting and Classification of Grants- In- Aid", prescribes the principles of following accounting and classification of Grants-In-Aid in the Financial Statements of Government both as Grantor as well as Grantee, namely,-- "Accounting and Classification of Grants-in-aid" The Standard, which has been set in bold italic type, should be read in the context of the explanatory paragraphs in this Standard, which are in plain type and in the context of the "Preface to Indian Government Accounting Standards". The Indian Government Accounting Standards are not intended to apply to immaterial items. Introduction 1. Grants-in-aid are pay....
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....etimes, the Union Government disburses funds to the State Governments in the nature of Pass-through Grants that are to be passed on to the Local Bodies. Funds are also released directly by the Union Government to District Rural Development Agencies (DRDAs) and other specialized agencies including Special Purpose Vehicles (SPVs) for carrying out rural development, rural employment, rural housing, other welfare schemes and other capital works schemes like construction of roads, etc. Similarly, the State Governments also disburse Grants-in-aid to agencies, bodies and institutions such as universities, hospitals, co-operative institutions and others. 3. The Article 243 of the Constitution endows the Panchayats and the Municipalities with such ....
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....repares the Financial Statements of the Government. Financial statements mean the Annual Finance Accounts of the Governments. Grants-in-aid are payments, transfers of funds, in cash or in kind, in the nature of donations or contributions by one Government (grantor) to another Government, body, institution or individual (grantee). Government means all departments and ministries of a Government taken together, whether of the Union Government or State Government or Union Territory Government with Legislature. Local Bodies include Panchayati Raj Institutions and Urban Local Bodies under the provisions of Article 243 and Schedule 12 of the Constitution. Pass-Through Grants means grants-in-aid given by the Union Government to the State Gover....
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....nts irrespective of the purpose for which the funds received as Grants-in-aid are proposed to be utilized, except in cases referred to in paragraph 13. 12. Grants-in-aid in kind shall be valued or disclosed as per the following: (a) Grants-in-aid in kind in the nature of consumables, or of value as given by the grantor of less than Rupees one crore must be disclosed in appropriate quantitative terms, (b) Grants-in-aid in kind relating to natural calamities or emergency purpose must be disclosed in appropriate quantitative terms. This disclosure is in addition to the monetary value thereof, (c) In other cases, Grants-in-aid in kind would be valued as per cost given by the grantor. In cases where the grantor is unable to indicate the c....
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....ated in paragraph 10. Disclosure 17. Where grants-in-aid given is classified and accounted for as revenue expenditure by the grantor, the Financial Statements of the grantor shall disclose quantum of total funds released to the grantee(s) and funds allocated for creation of capital assets out of the Grants-in-aid released during the financial year in the format prescribed in paragraph 25 of this Standard. 18. Information regarding Grants-in-aid in the format prescribed in paragraph 25 shall be generated from the accounting records except for such grants as mentioned in paragraph 20 of this Standard. 19. Exceptional cases specifically authorized by the President on the advice of the Comptroller and Auditor General of India, as referred t....
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....nts-in-aid and funds allocated for creation of capital assets by the grantee during the financial year, in the form of an Appendix to the Financial Statements in the format prescribed in paragraph 25. This will enhance transparency and lead to improved disclosure of information in the Financial Statements of the grantor. Such disclosures shall also enable the users of Financial Statements to assess the quantum of future capital formation activity to be undertaken by different grantees supported by funds from the Government. Effective Date 24. This Indian Government Accounting Standard becomes effective for the Financial Statements covering periods beginning from 1-4-2011. Format for Disclosure 25. Suggested format is given below: Statem....