Rule 59 — GAR
Original Rule Text
59. Losses or deficiencies of such assets shall not be classified under a separate head, in the: accounts, though they: should be written off from any value or commercial account that may be maintained. If any transactions under these categories are recorded under: a Suspense head in the Government accounts, losses or deficiencies relating thereto shall be written off the Suspense heads also.
Classification of losses or deficiencies of cash in hand, whether in treasury or in departmental charge:
What This Means
Rule 59 addresses how losses or deficiencies of physical assets — specifically buildings, land, stores, and equipment — are treated in government accounts. The rule establishes a clear principle: such losses are NOT to be classified under a separate head in the government accounts. Unlike cash losses (which must appear as expenditure per Rule 60), losses of physical assets do not generate a separate debit entry in the main accounts.
Instead, the appropriate action for a physical asset loss is to write it off from any commercial or value account maintained for that asset. Departments that maintain stores accounts, equipment registers, or commercial ledgers (such as manufacturing departments) must update those records to reflect the loss or deficiency. But this write-off is an internal accounting adjustment, not a new debit in the government's main accounts under a revenue or capital head.
The rule also addresses a specific situation: if the physical asset transactions (like stores movements) are tracked under a Suspense head in the government accounts, then any loss or deficiency relating to those transactions must be written off from the Suspense head as well. This prevents the Suspense head from carrying a permanently inflated debit balance that does not correspond to actual assets.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Losses or deficiencies of buildings, land, stores, and equipment are NOT classified under a separate head in the main government accounts.
- 2They should be written off from the value or commercial account maintained for those assets (stores accounts, equipment registers, etc.).
- 3If asset transactions appear under a Suspense head in government accounts, losses must also be written off from that Suspense head.
- 4The distinction from Rule 60 is important: cash losses must appear as expenditure in the accounts; physical asset losses do not.
- 5This rule applies regardless of how the deficiency occurred — theft, natural disaster, deterioration, write-off of obsolete assets.
- 6Relevant to all departments maintaining stores, equipment, or physical asset registers.
Practical Example
The Central Stationery Office maintains a stock of 10,000 reams of paper under its stores account, which is also tracked under a Suspense head '8449-Other Suspense Accounts' in the main accounts. During a flood, 400 reams are damaged beyond use. Under Rule 59, the PAO does not create a separate debit entry in the main government accounts under any expenditure head for this loss. Instead, the Stores Officer writes off 400 reams from the physical stock register, reducing the book value in the stores ledger. Since the paper stock also appeared under the Suspense head, the corresponding value (say Rs. 24,000 for 400 reams) is also written off from the Suspense head to clear that amount. The loss is absorbed into the stores accounts without creating a new visible debit in the main government accounts.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
▼
▼
▼
▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.