Changes in Accounting Policy of railways
	14:32 IST

Rajya Sabha Only one accounting change for capitalization of capital repayment component of lease charges payable to Indian Railways Finance Corporation was made with the approval of Comptroller & Auditor General of India during 2005-06. During 2006-07, following two accounting changes have been carried out in consultation with Ministry of Finance, in accordance with the generally accepted accounting practices and to reflect correct picture of financial status in the financial statements of railways with due disclosure in the budget documents: • Accountal of reimbursement of loss on Strategic lines received from General Revenues as reduction in working expenses of concerned Railways. Previously, this amount was deducted from dividend payable by Indian Railways to General Revenues. • Accountal of interest earned on Railway Fund balances to Railway Revenues as Miscellaneous Receipt. Previously, this amount was credited to fund balances directly without routing through railway revenues. The matter is under reference with Comptroller & Auditor General of India for their approval. The accounts of 2006-07 are yet to be finalized. However, the accounting changes would increase the cash surplus by Rs. 2,183.47 crore in 2006-07, whereas these had no effect on the cash surplus of 2005-06. The fund balances of Indian Railways available for investment remains unaffected. The accounting change for capitalization of capital repayment component of lease charges payable to Indian Railway Finance Corporation carried out in 2005-06 has approval of Comptroller & Auditor General of India. As regards accountal of reimbursement of loss on Strategic Lines received from General Revenues as reduction in working expenses, Audit has suggested to account for the amount as sundry other earnings instead of reduction in working expenses as proposed by Railways. The contention of Audit for accountal of interest earned on Railway Fund Balances as Railway Revenues is that this would lead to accountal of interest on fund balance as expenditure by both Ministry of Finance as well as Ministry of Railways. The matter is under discussion and will be finalized in consultation with Ministry of Finance and Comptroller & Auditor General of India. This information was given by the Minister of State for Railways Shri R.Velu in written reply to a question in the Rajya Sabha Sabha today. AKS/HK/CK/TR