he Municipality of Vijayawada (Bezawada) was constituted on 1st April 1888 and was upgraded as a selection grade municpality in the year 1960. The municipality was upgraded to a corporation in 1981.

bout Accrual Based Double Entry Accounting System

Vijayawada Municipal Corporation , as part of technology and process up-gradation for better utilization of the available resources, up-keep of records and transparency in accounts, has switched-over to Accrual Based Double Entry Accounting System from Cash Based System w.e.f 01-Apr-07

Benefits of Accrual System of Accounting

The accrual basis of accounting helps in determination of correct income and expenditure of the municipal bodies. T

he main benefits of accrual based accounting system are enumerated below:

a. Revenue is recognized as it is earned and thus “Income” constitutes both revenue received and receivable.

The accrual basis not only records the actual income but also highlights the level and efficacy of revenue collection, thereby assisting decision makers in taking financial decisions.

b. Expenditure is recognized as and when the liability for payment arises and thus it constitutes both amounts paid and payable. In accrual basis of accounting,

expenditure incurred on repairs and maintenance shall be recognized as expense of the period in which they are incurred and, if not paid for during the year, shall be treated as a liability (payable) and be disclosed as such in the Balance Sheet.

c. Expenses are matched with the income earned in that year. Thus, it provides a very effective basis to understand the true performance of the organization for the operations that is conducted in that year.

d. A distinct difference is maintained between items of revenue nature and capital nature.

This helps in correct presentation of financial statements, viz., the Income and Expenditure Statement and the Balance Sheet.