There are a set of accounting standards for commercial, industrial and business enterprises, and these accounting standards are issued by the Institute of Chartered Accountants of India (ICAI). Political parties fall under the commercial, non-industrial or non-business entities. Thus, the standard accounting formats of the other entities are not applicable to political parties.
The Election Commission of India (ECI) had requested recommendations from the ICAI to bring uniformity in the accounting and auditing practices of political parties. Thus, the “Guidance note on Accounting & Auditing of political parties” or the “Accounting guidelines” were formulated in February 2012 by the ICAI on the request of the ECI, in order to improve accounting and auditing standards of political parties and improve transparency in their finances.
These guidelines lay down principles of recognition, measurement and disclosure items of income, expenditure, assets and liabilities in the financial statements of political parties.
The Association for Democratic Reforms (ADR) regularly analyses assets and liabilities of the seven national
Business Standard presents here an extract of the report, which suggests that despite being out of power, the CPI (M)’s assets have not declined precipitately. The BJP retains its position as the top assets grosser. The Congress comes second, but is losing ground.
and Aditi Phadnis