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Accounting based on govt directions

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alok

AAO

21 Points Posted on 07 October 2020

A State Govt company is doing the accounting of Grant rec'd from State Govt on the basis of specific state govt circular and is disclosing the fact in the notes to account. However, the method quoted in circular in contrary to the Accounting standard on Govt Grants. Should the Govt company follow the state govt directions or the AS/ IndAS for accounting rhe same. what should Statutory auditor do/comment in this case.

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Quick Summary

A state government company is accounting for grants based on a specific government circular, even though this method contradicts relevant Accounting Standards (AS/IndAS). The discussion explores whether the company should adhere to the government's directive or the official accounting standards. It also considers the role and comments of the statutory auditor in such a situation, suggesting checking the applicability of AS/IndAS and consulting relevant government officials.