MANU/EAFF/0014/2023

Ministry : Ministry of Finance

Department/Board : Economic Affairs

Notification No. : SO1033(E)

Date of Notification : 02.03.2023

Date of Publication : 02.03.2023

Indian Government Accounting Standard on Prior Period Adjustments

S.O.1033(E).--Whereas, accounting on cash basis recognises prior period items for rectification of errors or adjustment of financial statements for one or more prior periods for which the accounts have been closed;

And whereas, Prior Period Adjustments are being presented as a part of Statement No. 5 (in Union Finance Accounts) and Statement No. 13 (in 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 changes in Government decisions which may impact current balances and progressive amounts during the earlier years for which accounts have been closed.

Now, therefore, in exercise of the powers conferred by article 150 of the Constitution, the President, on the advice of the Comptroller and Auditor General of India, hereby makes the following accounting standards, namely:-

1. Short title.--

These accounting standards may be called the Indian Government Accounting Standards (IGAS) 4-Prior Period Adjustments.