Institute of Chartered Accountants of India (ICAI) has presented a report on accounting standards to HRD Minister. ICAI recommended the accounting standards to be made mandatory for educational institutions in India. The report has been brought out by a working group consisting of members from ICAI and those nominated by the Ministry of HRD for the purpose, namely CA. G. Ramaswamy, President, ICAI, CA. Jaydeep N. Shah, Vice-President, ICAI, CA. Amarjit Chopra, Chairman, Professional Development Committee and representatives from the school and university sector besides experts in accounting.
The objectives of the accounting standards prepared by the ICAI committee is as below:
(i) to define transparently the revenue earned through various sources – tuition fees and other charges, income from consultancy or from intellectual property owned by the institution (for higher educational institutions) etc;
(ii) to recognize segment reporting of accounts (each school under the same institution being considered as a separate segment for accounting purposes);
(iii) to recognize costs and revenue separately for UG and PG programmes and for research and teaching activities;
(iv) to define relevant financial ratios derived from accounts for inter se comparison on research to total expenditure, income from fees to total income, salary expenditure to total expenditure etc). These ratios could enable greater understanding of funding needs especially in respect of government funding.
(v) to identify if surpluses are being generated and the manner in which the surpluses are utilized or invested;
(vi) to disclose related party transactions;
The Ministry of Human Resource Development would be organizing consultations with higher educational institutions and schools on the recommendations of ICAI Committee.
The accounting standards would be made applicable to all Central Educational Institutions, universities under the regulatory ambit of UGC or receiving grants from UGC, technical institutions under regulatory ambit of AICTE, teacher education institutions under the regulatory ambit of NCTE and schools affiliated to CBSE.
The recommendations made by ICAI would also be placed before the State Education Ministers in the next meeting. The Ministry in coordination with ICAI shall organise capacity building programme to train the staff of educational institutions.
Source: Press Information Bureau
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