Common Accounting System

COMMON ACCOUNTING SYSTEM INTRODUCTION 1. Most of the State Cooperative Societies Acts have provisions regarding preparation and submission of financial statements such as Balance Sheet, Profit and Loss Account and Trading Account of PACS. However, the formats for financial statements of PACS have not been prescribed in many States. The existing formats have evolved over a period of time on the basis of instructions from the RCS, Director of Audit, etc., There is no uniformity and transparency in the formats adopted by PACS within the States 2. The Task Force on Revival of Short-Term Cooperative Credit Structure observed that PACS, in many states, do not follow standard accounting systems and do not make adequate provisions against NPAs and follow proper income recognition norms. While PACS, in some States, make provisions for bad and doubtful debts as per the guidelines issued by the erstwhile Agriculture Credit Department (ACD) of Reserve Bank of India, PACS in other States like Andhra Pradesh, Uttarakhand and Kerala follow Income Recognition and Asset Classification (IRAC) norms as applicable to DCCBs/SCBs as prescribed by the Registrar of Cooperative Societies of the State concerned. A large number of PACS in many States continue to adopt single entry system of accounting, even though a number of PACS in these States have adopted double entry system of book-keeping. 3. The introduction of a Uniform Accounting System for the PACS would depend upon a number of factors like adoption of Common Financial Statements by PACS, exhaustive list of General Ledger Heads of Accounts, applicability of various accounting principles like following double entry, netting concepts, introduction of prudential norms (IRAC), viz., Income Recognition, Asset Classification and Capital Adequacy Norms. As indicated in the Revival Package, implementing States will have to adopt prudential norms for PACS in consultation with NABARD, while recapitalization assistance would provide for