01-29-2006, 01:12 AM
<blockquote id="quote"><font size="1" face="Verdana, Tahoma, Arial" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by smraza</i>
<br />Dear all,
There are two methods of accounting being following by NGOs, Trusts etc in Pakistan, One the accrual basis of accounting and second cash basis of accounting,
If the accrual basis is being followed then it will present the Balance Sheet and Income and Expenditure Account (together with the notes), It will be capitalizing its fixed assets and allocate the depreciation charge on yearly basis follwoign the matching concept.
If the cash basis of accounting is being followed then only 'Receipt and Payment Account' (together with the notes) will be prepared, irrespective of nature and volume of payments. The NGO will simply show the outflow of cash for the fixed assets purchased during the a particular period.
Thanks,
SMR
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
AoA
If the NGO is duly registered under section 42 of the Companies Ordinance, 1984 then the NGO shall be construed as 'company' for the purpose of applicability of the provisions of Companies Ordinance, 1984 with modification where specified.
It means that NGO registered under section 42 of the Companies ORdinance, 1984 has no option whether to follow accrual basis or cash basis of accounting. NGO shall follow accrual basis of accounting by following IFRS pursuant to provisions of the Companies Ordinance, 1984.
NGOs not registered under section 42 of the Companies Ordinance, 1984 have option whether to follow accrual basis or cash basis of accounting.
And I think the original question raised by Mr. Zahid relates to implication/penalties if the NGO do not follow requirments of IFRS.
Implications have been explianed earlier, (which shall apply only on NGO registered under section 42). Other NGOs following cash basis and are not registered under the Ordinance have no status of 'a company'.
ICAPians, the unparalleled..
<br />Dear all,
There are two methods of accounting being following by NGOs, Trusts etc in Pakistan, One the accrual basis of accounting and second cash basis of accounting,
If the accrual basis is being followed then it will present the Balance Sheet and Income and Expenditure Account (together with the notes), It will be capitalizing its fixed assets and allocate the depreciation charge on yearly basis follwoign the matching concept.
If the cash basis of accounting is being followed then only 'Receipt and Payment Account' (together with the notes) will be prepared, irrespective of nature and volume of payments. The NGO will simply show the outflow of cash for the fixed assets purchased during the a particular period.
Thanks,
SMR
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
AoA
If the NGO is duly registered under section 42 of the Companies Ordinance, 1984 then the NGO shall be construed as 'company' for the purpose of applicability of the provisions of Companies Ordinance, 1984 with modification where specified.
It means that NGO registered under section 42 of the Companies ORdinance, 1984 has no option whether to follow accrual basis or cash basis of accounting. NGO shall follow accrual basis of accounting by following IFRS pursuant to provisions of the Companies Ordinance, 1984.
NGOs not registered under section 42 of the Companies Ordinance, 1984 have option whether to follow accrual basis or cash basis of accounting.
And I think the original question raised by Mr. Zahid relates to implication/penalties if the NGO do not follow requirments of IFRS.
Implications have been explianed earlier, (which shall apply only on NGO registered under section 42). Other NGOs following cash basis and are not registered under the Ordinance have no status of 'a company'.
ICAPians, the unparalleled..
