The Institute of Chartered Accountants of India (ICAI) has set up a standard format for higher educational institutes of the country. As per the body, all higher education institutes will have to report their financial information in that standard format set by the ICAI.
As per the format, the institutes will now have to disclose their balance sheet and the income and expenditure account. The new system is a shift from the present cash basis of accounting to accrual-based system.
While the balance sheet will include sources and applications of funds along with liabilities and assets, the income and expenditure statement would reflect the academic receipts, grants and donations. With education being a not for profit activity, the ministry of human resource development (MHRD) wants to enforce these standards in order to check how much profit the educational institutes are making.
