The Institute of Chartered Accountants of India (ICAI), as a partner in nation building, has been taking various steps to improve the Government Accounting and Public Financial Management in India. During the Council Year 2019-20, Committee on Public Finance and Accounting Standards for Local Bodies (CPF&ASLB) has been constituted in ICAI to carry forward the initiatives of two erstwhile Committees (i.e., Committee on Accounting Standards for Local Bodies (CASLB) and Committee on Public Finance and Government Accounting (CPF&GA)). Amongst others, the primary activities of the erstwhile CASLB was to prescribe accrual based accounting framework, i.e., Accounting Standards for Local Bodies(ASLBs) which is being carried forward under the newly constituted Committee.
It is worth appreciating that the Local Bodies in India are shifting to accrual basis of accounting and are drawing accounting guidance from National Municipal Accounts Manual (NMAM) in this regard that was issued during 2004.
ASLBs are being issued by the ICAI as an extension of NMAM incorporating the accounting developments over these 15 years and also to address the areas that are not covered in NMAM. ASLBs are based upon the International Public Sector Accounting Standards (IPSASs - International best Accounting Standards for all level of Governments), and also takes into account the India’s unique governance & demographic features. Fifteen ASLBs were issued by the erstwhile CASLB. Moving forward in this direction, the CPF&ASLB has finalised the Exposure Draft of ASLB 13, ‘Leases’
(Download Exposure Drafts: https://www.icai.org/comments/caslb/)
Local Bodies enters into number of lease transactions, i.e., various assets are leased-in and leased out by the Local Bodies. The aforesaid ASLB sets out the principles for the recognition, measurement, presentation and disclosure of leases. The ASLB being issued by the ICAI would provide detailed accounting guidance for the same would be very useful for Local Bodies. The comments on the above Exposure Draft are invited which can be submitted using one of the following methods, so as to be received not later than September 8, 2019: