Accounting+-+Segmental+Reporting+Policies - ACCOUNTING...

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ACCOUNTING POLICIES (Schedule T) 1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS The financial statements of Bharat Sanchar Nigam Limited (the “Company” or “BSNL”) are prepared under the historical cost convention adopting the accrual method of accounting in accordance with Indian Generally Accepted Accounting Principles and in accordance with the provisions of the Companies Act, 1956 and it requires the management to make estimates & assumptions and actual may differ from these which are recognized in the period it is ascertained. 2. REVENUE RECOGNITION Income from services is accounted for on accrual basis and in conformity with Accounting Standard – 9 . Accordingly, a) Revenue for all services is recognized when earned and are realizable at the time of billing. Un- billed revenues from the billing date to the end of the year are recorded as accrued revenue during the period in which the services are provided. Provision is made in respect of bills considered to be disputed (by the management), debts outstanding for more than two years and for debts due for less than 2 years, to the extent considered necessary by the management. b) Installation Charges recovered from subscribers at the time of new telephone connections are recognized as income in the first year of the billing. c) In terms of the arrangement between Department of Telecommunications (“DoT”) and the Company, the charges for telecommunication services and other infrastructural services provided by BSNL to DoT are neither being billed nor provided for. d) Sale proceeds of scrap arising from maintenance and project works are taken into miscellaneous income in the year of sale. e) Income from SIMs, recharge coupons of Mobile, Prepaid Calling Cards, and Prepaid internet connection cards are treated as income of the year in which the payment is received since the extent of use of these cards within the financial year could not be ascertained. f) Wherever there is uncertainty in realization of income, such as liquidated damages, claims on Government Departments & local authorities etc., these are recognized on collection basis. g) The claims receivable on account of provision of infrastructure, operation and maintenance of Village Public Telephones (VPTs) & Rural Household Connections (RDELs) etc. and operational sustainability of rural wireline network from U.S.O. fund are accounted for as other operating income. h) The interest on surplus fund which are placed generally in fixed deposits with banks is recognized on accrual basis. i)
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This note was uploaded on 07/29/2010 for the course ACCOUNTS 2332 taught by Professor Piyush during the Fall '10 term at Amity University.

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Accounting+-+Segmental+Reporting+Policies - ACCOUNTING...

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