Exposure Draft Revised Guidance Note on Accounting of Political Parties

(Last date of Comments: April 6, 2019)

Issued By
Accounting Standards Board
The Institute of Chartered Accountants of India
(Set up by an Act of Parliament)
New Delhi

Index

S.No. Contents
1. Introduction and Background Information
2. Requirements of Various Acts
3. Objectives of this Guidance Note
4. Scope
5. Definitions
6. Accrual Basis of Accounting
7. Accounting Framework for Political Parties
8. Application of recognition and measurement principles to transactions of Political Parties
9. Books of Accounts to be maintained by Political Parties
10. Formats of Financial Statements under Accrual Basis of Accounting
Appendix I Guidelines on transparency and accountability in party funds and election expenditure matter issued by Election Commission of India
Appendix II Applicability of Accounting Standards issued by ICAI to Political Parties
Appendix III Books of account and records
Appendix IV Formats of Financial Statements for Political Parties
Appendix V Notification regarding Electoral Bonds

Exposure Draft

Revised Guidance Note on Accounting of Political Parties

During the year 2012, ICAI had issued a Guidance Note on ‘Accounting and Auditing of Political Parties’ as desired by the Election Commission of India. The Guidance Note is now being upgraded to incorporate certain improvements and changes in the operating environments since then. It has also been decided to issue the guidance for Auditing of Political Parties separately in detailed manner, if required.

Accordingly, Following is the Exposure Draft of the revised Guidance Note on “Accounting of Political Parties” issued by the Accounting Standards Board of the Institute of Chartered Accountants of India, for comments. The Board invites comments on any aspect of this Exposure Draft. Comments are most helpful if they indicate the specific paragraph or group of paragraphs to which they relate, contain a clear rationale and, where applicable, provide a suggestion for alternative wording.

How to Comment:

Comments are invited on the Exposure draft of the revised Guidance note. Comments can be submitted using one of the following methods so as to be received not later than April 6, 2019

Electronically: click on http://www.icai.org/comments/asb/to submit comments online

Email: Comments can be sent at commentsasb@icai.in

Postal: Secretary, Accounting Standards Board,
The Institute of Chartered Accountants of India,
ICAI Bhawan, Post Box No. 7100,
Indraprastha Marg, New Delhi 110 002

Questions:

1. This Guidance Note uses the term “net assets/equity” (please refer explanation to faithful representation under section 8) in place of the term “equity” which is used in case of commercial entities to refer to residual interest in the assets of the entity after deducting all its liabilities. Do you agree with the term used in this Guidance Asset? If not, please suggest any alternative/ relevant term along with the rationale for the same.

2. This Guidance Note uses the term “members” in place of the term “owners” used in case of commercial entities (please refer definition of Expenses and Income under section 5). Do you agree with the term used? If not, please suggest any alternative/ relevant term along with the rationale for the same.

3. The Political Parties receive grants and donations (in cash/kind). The analogy has been drawn from existing AS 12, “Government Grants” for accounting treatment for the grants received by Political Parties. In addition, political parties may also receive services-in-kind. This Guidance note does not require entities to measure the same but requires the disclosure of the nature and type of services-in-kind received by political parties. Do you agree with the treatment prescribed? If not, please provide rationale for your view.

Download Revised Guidance Note on Accounting of Political Parties

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