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ACCOUNTING AND CLASSIFICATION OF GRANTS-IN-AID

IGAS - 2 - Rule - Companies Law - IGAS - 2 - INDIAN GOVERNMENT ACCOUNTING STANDARDS IGAS - 2 NOTIFICATION NO. S.O.1113(E), DATED 19-5-2011 In exercise of the powers conferred by article 150 of the Constitution of India, the President of India, on the advice of the Comptroller and Auditor General of India, hereby makes the following accounting standards, namely, - Indian Government Accounting Standards (IGAS)2,- "Accounting and Classification of Grants- In- Aid." 2. The Indian Governmen .....

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t Accounting Standards are not intended to apply to immaterial items. Introduction 1. Grants-in-aid are payments in the nature of assistance, donations or contributions made by one government to another government, body, institution or individual. Grants-in-aid are given for specified purpose of supporting an institution including construction of assets. The general principle of grants-in-aid is that it can be given to a person or a public body or an institution having a legal status of its own. .....

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the Local Bodies (LBs) consisting of the Panchayati Raj Institutions (PRIs) and the Urban Local Bodies (ULBs) at the grass root level. Accounts of these three levels of Government are separate and consequently the assets and liabilities of each level of government are recorded separately. Grants-in-aid released by the Union Government to the State Governments are paid out of the Consolidated Fund of India as per Articles 275 and 282 of the Constitution. The Union Government releases grants-in-a .....

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ing, 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, cooperative institutions and others. 3. The Article 243 of the Constitution endows the Panchayats and the Municipalities with such powers and authorities to enable them to function as institution of self-government in relating to the matters listed in the Eleventh and the Twel .....

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o prescribe practical solutions to remove any difficulties experienced in adherence to the appropriate principles of by way of appropriate disclosures in the Financial Statements of Government. Scope 5. This Standard applies to the Union Government and the State Governments in received or given by them. The Financial Statements should not be described as complying with this Standard unless they comply with all the requirements contained therein. This Standard encompasses cases of Pass-Through Gr .....

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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 Governments for transfer to an ultimate grantee. Recog .....

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tee at the time of their receipt by the grantee. Accounting and Classification 9. Grants-in-aid disbursed by a grantor to a grantee shall be classified and accounted for as revenue expenditure in the Financial Statements of the grantor irrespective of the purpose for which the funds disbursed as Grants-in-aid are to be spent by the grantee except in cases referred to in paragraph 13. 10. Grants-in-aid, that are in the nature of Pass-Through Grants, from the Union Government to the State Governme .....

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ived 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 .....

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xcept in cases specifically authorized by the President on the advice of the Comptroller and Auditor General of India, be debited to a capital head of account in the Financial Statements of the Government. 14. Grants-in-aid are classified and accounted for as revenue expenditure in the Financial Statements of the grantor irrespective of its ultimate application by the grantee. This position holds true even in those cases where Grants-in-aid are utilized by the grantee for the purpose of creation .....

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termediate grantee for transfer to ultimate grantee. Such Grants-in-aid are also accounted for as revenue expenditure both in the books of grantor and the intermediate grantee as stated 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 rele .....

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the format prescribed in paragraph 25. 20. Grants-in-aid in kind shall be disclosed in quantitative terms as per paragraph 12 of this standard. Grants-in-aid in kind shall be disclosed in the financial statements of the grantor at the time of their receipt by the grantee. Grants-in-aid in kind shall be disclosed in the financial statements of the grantee at the time of their receipt by the grantee. 21. The details required in paragraphs 17 and 18 shall be provided for by the accounting classific .....

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compiled by respective departments/ministries of Government and consolidated for grantor (Government) by the concerned Accounting Authority for preparation of above disclosure format. 23. In order to ascertain the extent of Grants-in-aid disbursed by the grantor to the grantee for the purpose of creation of capital assets, the Financial Statements of the grantor shall disclose the details of total funds released as Grants-in-aid and funds allocated for creation of capital assets by the grantee .....

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nting Standard becomes effective for the Financial Statements covering periods beginning from 1-4-2011. Format for Disclosure 25. Suggested format is given below: Statement Containing Details(1) of Total Funds Released During the Year _____as Grants-in-aid and Funds Allocated for Creation of Assets (Rs. in lakhs) Name/Category of the Grantee Total Funds Released as Grants-in-aid Funds Allocated for Creation of Capital Assets out of Total Funds Released Under Column No. (2) (1) (2) (3) State Gove .....

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