Submitted To: Submitted By:

Dr. Ranjit Singh Kunal Sharma(IMB2018013)

Gokul Krishana(IMB2018012)
A non-profit organization (NPO) is one which
is not propelled by profit but by dedication
to a given cause that is the target of all
income beyond what it takes to run the
organization.

 Non-profit organizations are often used for

trusts, cooperatives, advocacy, charity,
environmental and religious groups.

 In India, NPOs operate in varied fields such

as health, poverty reduction, education,
etc., and act as effective movers in a socio-
economic change of the country.
 Main Aim is to Service the society
 Profit is not the Criteria
 Surplus or deficit is not distributed among its
members
 Separate Entity
 Run and managed by elected members
 Major Funds from Donation and Contribution
 Norwegian School of Economics and Business
Administration highlight the case study of British
Red Cross, which is a nonprofit organization
(NPO) which is based in United Kingdom. The
analysis done on this NPO was focused on their
book keeping and their financial statement and
finding new ways that will improve their book
keeping procedures. It is found that the
organization is following these practices, The
Whole Organization as a Reporting Entity,
Convergence of Accounting Regulations for All
NPOs, Divergence from Commercial Accounting,
furthermore the suggestion made for
improvement are as follows, Historic Accounting
Figures, Budgetary Figures, Verbal Comments,
Key Ratios. [Jin, Zi. 2010]
The objective of this study is to understand the
following things.

 Understand the procedure of NPO accounting.

 Tocheck that NPO (Akshaya Patra) is following

the standards and guidelines laid down by IAS
for making financial statement.
 TheFinal Accounts of non-trading concerns
consists of:

 1. Receipts and Payments Account

 2. Income and Expenditure Account,

 3. Balance Sheet.
 Summary Of Cash Transactions
All cash receipts and payments made by the concern
during the accounting period are recorded in this book.
Therefore, receipts and payments account can be taken as
a summary of cash transactions.
 Cash And Bank Items In One Column
All receipts either cash or bank are recorded in receipts
column of receipts side where all cash and bank payments
are recorded in one column of payment column of receipts
and payments account. The cash and bank transactions are
merged to avoid contra entries of cash and bank
transactions.
 No Distinction between Capital and Revenue
All cash receipts and cash payments irrespective of capital
and revenue nature are recorded in receipts and payments
account. No distinct is made for capital receipts , revenue
receipts, capital expenditures and revenue expenditures.
 Opening and Closing Balance of Cash
Receipts and payments account starts from
opening balance of cash and bank ends with the
closing balance of cash and bank.

 Recording of Cash Receipts And Payments

All cash and cheque receipts are recorded on
debit side where as all cash and cheque
payments are recorded on credit side of receipts
and payments account.

 Ignores Non-cash Transactions

Receipts and payments account does not record
non-cash transactions
 It is in fact like a Profit and Loss Account of a
profit-seeking concern.
 All expenses are recorded on Debit side and
all revenues on Credit side.
 Only revenue transactions are included in it.
No capital items is taken into account.
 All the items of income/revenue concerning
current year — whether received in cash or
not—and all items of expense —whether paid
in cash or not—are taken into account. But
no item of income or expense concerning last
year or next year is included in it.
 Surplus or deficit of a concern is ascertained
through this account. Credit balance
"indicates surplus, while debit balance
indicates deficit.
 Its balance is transferred to Capital Fund
Account.
 It is prepared on the last day of an
accounting year.
 It does not start with any opening balance.
 Surplus or deficit of a fixed, period of time is
ascertained through this account. So it's heading will
be:
Income and Expenditure Account for the year ended
31.12.2016.
 Income and Expenditure Account is a Nominal
Account. Hence, only revenue (no capital) items will
find place in it.
 All items of revenue income and expenditure relating
to the current year will appear in it. In other words,
all items of income relating to the current year -
whether received in cash or not - and all items of
expenditure relating to the current year - whether
paid in cash or not - will find place in this account.
No items of income or expenditure relating to last
year or next year will be included in this account.
 Preparation of opening balance sheet and
calculation of surplus: If capital fund or
accumulated surplus in the beginning of the year is
not given, it is calculated by deducting liabilities
from assets in the beginning of year. While
calculating opening capital fund, should be taken to
include prepaid expenses and accrued incomes as
assets and outstanding expenses and advance
incomes as liabilities. Any surplus earned during the
year is added to the opening capital fund and
deficit suffered during the year is deducted from
the opening capital fund.
 Cash and bank balance: Closing cash and bank
balance as disclosed in receipt and payment
account is shown in the assets side of balance
sheet. If there is a bank overdraft, it is to be shown
on the liabilities side of the balance sheet.
 Fixed assets: Opening balances of fixed
assets (furniture, building, equipments) are
increased by the amount of purchases and
reduced by sales of the same and
depreciation on the same.
 Liabilities: Opening balances of liabilities
should be adjusted for any increase or
decrease in the same.
 The Akshaya Patra Foundation began a journey of providing
food for education as a means to address classroom hunger
in India.

 Serving mid-day meals to over 1.75 million children, They

are stepping closer towards the mission to feed 5 million
children by 2020, with continued support from
stakeholders and well-wishers.

 Initiatives such as The ‘Introduction of Millets in Mid-Day

Meals’ and ‘Food Fortification’ are aimed to augment our
school lunch programme, projects like the ‘Swachh
Vidyarthi, Swachh Vidyalaya, Swachh Gruha’ and ‘Giving
Every Dream a Chance’ will go beyond meals in enriching
the lives of our beneficiaries. Taking measured but
impactful steps hoping to create an environment that will
foster the development of beneficiaries by expanding the
scope.
 Objective: This Standard prescribes the basis for
presentation of general purpose financial
statements to ensure comparability both with the
entity’s financial statements of previous periods
and with the financial statements of other
entities.
 It sets out overall requirements for the
presentation of financial statements, guidelines
for their structure and minimum requirements
for their content.
 The objective of this Standard is to prescribe
the accounting treatment for inventories.
 A primary issue in accounting for inventories is
the amount of cost to be recognized as an asset
and carried forward until the related revenues
are recognized.
 This Standard deals with the determination of
cost and its subsequent recognition as an
expense, including any write-down to net
realizable value.
 It also provides guidance on the cost formulas
that are used to assign costs to inventories.
 The objective of this Standard is to prescribe:
(a) When an entity should adjust its financial
statements for events after the reporting period;
and
(b) the disclosures that an entity should give
about the date when the financial statements were
approved for issue and about events after the
reporting period.

 The Standard also requires that an entity should not

prepare its financial statements on a going concern
basis if events after the reporting period indicate
that the going concern assumption is not
appropriate.
 The objective of this Standard is to prescribe
the accounting and disclosure for employee
benefits. The Standard requires an entity to
recognize:
(a) a liability when an employee has
provided service in exchange for employee
benefits to be paid in the future; and
(b) an expense when the entity consumes
the economic benefit arising from service
provided by an employee in exchange for
employee benefits.
 This Standard shall be applied in accounting
for, and in the disclosure of, government
grants and in the disclosure of other forms of
government assistance.
 As per analysis done, we find that Akshaya
Patra is following the procedure of making
the financial statements, laid down by Ind
AS.
 Here profit and loss account is referred as
Income and expenditure account and profit
and loss are referred as surplus and deficit.
 There is another account known as receipts
and payment account which contains the
details of all the income that are coming
from donation and other sources and their
expenditure.
 Not for profit organization are those
organization which don’t aim to earn profit.
It is mostly for charity or other types of
public service organization. The financial
statement of such organization consist of
 Payment and Receipt Account.
 Income and Expenditure Account
 Balance Sheet
 As per our analysis and finding, we have
found that Akshaya Patra being an NGO
follows the guideline for making the financial
statement at the end of each year.
 Jin, Zi. (2010). Accounting for Nonprofit Organizations: A
Case Study of British Red Cross. Norwegian School of
Economics and Business Administration, Master Project.

 Herzlinger, R.E. and Sherman, H.D. (1980): Advantages of

fund accounting in „nonprofits‟. Harvard Business Review,
May-June, p.94-105.
 Reheul, A.-M., Caneghem, T. V., & Verbruggen, S. (2012).
Financial Reporting Lags in the Non-profit Sector: An
Empirical Analysis. International Society for Thrid-Sector
Research and The Johns Hopkins Univeristy, 25, 352-377.
 Verbruggen, S., Christiaens, J., & Milis, K. (2011). Can
Resource Dependence and Coercive Isomorphism Explain
Nonprofit Organizations' Compliance With Reporting
Standards. Nonprofit and Voluntary Sectory Quarterly,
40(1), 5-32.