TaxTMI 
TaxTMI 
Indian Government Accounting Standard on Prior Period Adjustments
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....n some State Finance Accounts) as 'Summary of Balances'; And whereas, the Prior Period Adjustments in Union Finance Account is governed by the Paragraph 5.15.3 of the Civil Accounts Manual but in States there are no such rules in "Accounts code for Accountant General"; And whereas, in a study of various Finance Accounts of States, it was observed that majority of the States are not taking cognizance of Prior Period Adjustments in their accounts or following a wrong practice of passing transfer entries to correct Prior Period Adjustments; And whereas, the present Standard not only aims to disclose such information which pertains to prior period errors but also covers entries requiring Prior Period Adjustments arising out of ....
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.... (3) This Standard shall not include in its ambit, defaults of loans and grants-in-aid dealt in IGAS-2 and IGAS-3 exclusively as it is only a process for rectification or adjustment of financial statements of prior periods. D. Definitions (a) "Accounting Authority" means the authority which prepares the financial statements of the Governments; (b) "Capital Expenditure" means an expenditure incurred to create future benefits like acquisition of tangible assets of material and permanent nature such as land, building, machines, upgradation of the existing facilities or assets to add values to the same and includes investment in shares and loans and advances given by the Government; (c) "General Purpose Fina....
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....inancial statements and such errors include the effects of mathematical mistakes, mistakes in applying accounting policies, oversights or misinterpretations of facts; (j) "Reporting Date" is the last day of the financial year to which the financial statements relate that is to say, the 31st March; (k) "Revenue Expenditure" means all charges for maintenance, repair, upkeep and working expenses, which are required to maintain the assets in a running order as also all other expenses incurred for the day to day running of the entity, including establishment and administrative expenses; E. Presentation and Disclosure Requirements.- (1) Prior Period Adjustments shall be presented and disclosed in accordance with Anne....
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....d heads of account involved except heads Closed to Government Accounts which may include cases such as: (i) conversion of Loans to equity and vice versa, conversion of loans to grants-in-aid and vice versa etc., arising due to Government decisions which may impact Head closed to Balances entries thereon; (ii) even after sanction for conversion of loans to equity and vice versa, conversion of loans to grants-in-aid and vice versa etc., issued (as referred in clause (i) above) and any entity continues to book expenditure under previous heads then such cases will be considered as 'Error'; (iii) cases involving Prior Period Adjustment to transfer balance of discharged loans from Market Loans bearing Interest to Ma....
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....nbsp; E. Expenditure Heads (Revenue Account) F. Expenditure Heads (Capital Account) G. Inter -State Settlement H. Miscellaneous (Net) I. Transfer to Contingency Fund J. Closing Balance XXXX GRAND TOTAL XXXX *Net effect (Dr. or Cr.) of Prior Period Adjustments in Government Accounts of 'Statement of Summary of Balance' (Annexure 1) will be zz (i.e. difference of xx and yy) given in Annexure 2. Details of Prior Period Adjustments Annexure 2 (Rs. in thousands) Sr. No. Type of Corrections (Adjustments/Errors) Heads of Accounts (Major / Minor Heads wise details of both the affected he....