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TMI BlogIndian Government Accounting Standards (IGAS) 1 - Guarantees given by Governments : Disclosure RequirementsX X X X Extracts X X X X X X X X Extracts X X X X ..... ent of borrowings within such limits, if any, as may be fixed upon the security of the Consolidated Fund of India or of the State, as the case may be, in terms of articles 292 and 293 of the Constitution. Guarantees are also given by the Union Government for payment of interest on borrowings, repayment of share capital and payment of minimum annual dividend, payment against agreements for supplies of materials and equipments on credit basis on behalf of the State Governments, Union territories, local bodies, railways, Government companies or corporations, joint stock companies, financial institutions, port trusts, electricity boards and co-operative institutions. Guarantees are also given by the Union Government to the Reserve Bank of India, other banks and financial institutions for repayment of principal and payment of interest, cash credit facility, financing seasonal agricultural operations and for providing working capital in respect of companies, corporations, co-operative societies and co-operative banks. Further, guarantees are also given in pursuance of agreements entered into by the Union Government with international financial institutions, foreign lending agencies, fore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rements. (2) The Authority in the Government which prepares the Statement of Guarantees for inclusion and presentation in the Financial Statements shall apply this Standard. The Accounting Authority is responsible for inclusion and presentation of the Statement of Guarantees in the Financial Statements as provided by the Authority in the Government. D. Definitions In this Standard, unless the context otherwise requires, - ( a ) Accounting Authority. means the Authority which prepares the Financial Statements of the Government; ( b ) Authority in the Government. means the tracking (monitoring) unit or Authority for Guarantees and in its absence, the Ministry or the Department of Finance, as the case may be; ( c ) Automatic Debit Mechanism. means the arrangement whereby the Government's cash balance is affected on a specified date or on the occurrence of specified events to meet certain obligations arising out of Guarantees given by it; ( d ) Financial Statements. mean the Annual Finance Accounts of the Governments; ( e ) Guarantee. means an accessory contract, by which the promisor undertakes to be answerable to the promisee for the debt, de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istry or Department of Finance in the respective Governments. The Financial Statements disclose the details concerning the tracking unit for guarantees or any concerned authority in charge of this responsibility. H. Many Governments have set up either a Guarantee Redemption Fund or a Guarantee Reserve Fund. Some Governments have made; arrangement for Automatic Debit Mechanism for discharging the obligations arising out of such Guarantees executed by the Government. There are also Structured Payment Arrangements. The Financial Statements disclose full details concerning these arrangements. I. When Guarantees are invoked and payments made, the payment is treated as loan to the beneficiary on whose behalf the Guarantees were given and recoveries there against are monitored. The expenditure, loan and recoveries are distinctly classified in the Financial Statements. If, in due course, the whole or part of the loan amount is finally held to be irrecoverable, the same is adjusted ( a ) where a Guarantee Reserve Fund exists, by debit to such Fund and ( b ) where the guarantee Reserve Fund does not exist, by debit to "Irrecoverable loan written off under the function for which the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or class-wise disclosures in the Financial Statements of the Union Government and sector-wise disclosures in the Financial Statements of the State Governments and Union Territory Governments (with legislature). L. Sector-wise disclosures for each class, as per the format specified in paragraph M are encouraged to be made in the Financial Statements of the Union Government as well as the State Governments or Union Territory Governments with legislature. Sector (No. of Guarantees within bracket) Maximum amount guaranteed during the year (Rs.) Outstanding at the beginning of the year (Rs.) Additions during the year (Rs.) Deletions (other than invoked) during the year (Rs.) 1 2 3 4 5 Invoked during the year (Rs.) Outstanding at the end of the year (Rs.) Guarantee Commission or fee (Rs.) Other material details Discharged Not Discharged Receivable Received 6 7 8 9 10 11 Formats ..... X X X X Extracts X X X X X X X X Extracts X X X X
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