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| Type | Commercial Circular |
|---|---|
| Topic | reservation |
| Currency | Currency not verified |
Accrual Accounting in Traffic Accounts of Railways.
TRAFFIC ACCOUNTS- ACCRUAL ACCOUNTING PERSPECTIVE
-V.A.PADMANABHAM, IRAS
ADDL. DIRECTOR/ Ctara
Indian Railways is planning to switch over to Accrual Accounting as
recommended by Debroy Committee in its report on the study of Indian railways.
Traffic Accounts of IR which brings into account earnings of railways is also to be
geared up in this direction. The earnings of IR are projected at Rs.1.80 lakh crores
during 2015-16 garnered from passengers, other coaching, goods and sundries arising
over 8000 stations of Indian Railways.
Accounting of Earnings and their realization in Railways are regulated by the
provisions envisaged in Indian Railway Accounts Code Vol II and the following are
main source of documents to capture the earnings.
PRS, UTS, EFT, BPT and PCTs are main sources of passenger earnings.
Ticketing through e ticket, ticket through mobile phones also occupy a
major segment ticketing in Railways.
Several schemes of issue of unreserved ticketing is also in vogue like
JTBS, YTSK, AVMs to clear the rush at booking offices of stations.
Invoice forms the basic document freight earnings
Parcel Way Bill for parcel traffic
Several agencies help IR in the accountal of earnings like CRIS, FOIS & RITES .
At the outset, it is necessary to bear in mind that Traffic Accounts Branch has
been following Accrual Accounting in most of the areas even though in some cases
Cash based accounting is followed. Even in the best of the commercial organizations,
this practice is in vogue and cannot be overcome totally.
Accrual Accounting in Traffic Accounts of Railways.
Traffic Accounts follows accrual accounting by virtue of operating traffic
suspense in the accounting of earnings. The underlying principle in accrual
accounting or commercial accounting system is that accounting method should follow
accounting period concept which is usually a year-financial or calendar year.
Accordingly, accounting should recognize incomes pertaining to the period and
account for irrespective of the fact whether the income is realized or not. To a large
extent, Traffic Accounts of Indian Railways follow this principle thus conforming to
accrual accounting system.
PRESENT ARCHITECTURE OF TRAFFIC ACCOUNTS IN IR
Salient features of present architecture of Traffic Accounts in Indian Railways is
outlines as under:
Station Balance Sheet which is prepared separately prepared monthly by every
station over Indian Railways is deftly designed on accrual accounting basis long
back. Station Balance Sheet takes into account all the earnings on its debit side
irrespective of realization. It reflects closing balance which forms part of traffic
suspense of IR and it is absolutely on the principles of commercial accounting.
Similarly, Traffic Accounts branch compiles Accounts Office Balance Sheet
every month separately for coaching and goods transactions. It brings into
account all the carriage bills billed against all government departments,
Central/State Government from whom moneys to be realized for journey
performed by police personnel, defence personnel etc. against warrants.
Amounts on account of carriage bills are debited in the Accounts Office Balance
Sheet and realized subsequently. Pending realization, the outstanding balance
forms part of traffic suspense the realization of which is the responsibility of
Traffic Accounts Department. This is another example of accrual accounting
followed on Railways.
Traffic Book is a compilation of earnings of a zonal railway which brings into
account all the earnings whether accrued at stations or otherwise, irrespective
of their actual time of realization.
Operation of Traffic Account and Traffic Suspense ensures that all the earnings
are accounted in the accounting period irrespective of their realization. The
unrealized earnings as reflected in Traffic suspense of railways is closely
monitored and watched for re
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