Railway Accounts Department Examinations

Showing posts with label write back. Show all posts
Showing posts with label write back. Show all posts

Saturday, April 28, 2018

Write back adjustments


  • What is Write back in Indian Railways lingo?

  • In Indian Railways lingo, Write Back means, at the time of condemnation of asset like rolling stock, the original cost of that asset will be write back from the source of finance for which originally used (normally “Capital” ) and debited to the Source of finance i.e., DRF – Depreciation Reserve Fund.

  • For example, if the asset Diesel locomotive which is purchased at a cost of 35 Lakhs in the year 1965 and was put to condemnation in the year 2014, after expiry of its useful life period.  The Competent Authority gave its approval for such condemnation.

  • In the books of Zonal Railway, the write back entries (Journal entries )are posted by using CONTRA JVs.

    In the Capital Books  - CJV

    CAP -20-2113 -08(Rolling Stock)                             ( - ) Debit  - Rs. 35 Lakhs

       Transfer Railway Revenue           (00878243)              Debit  -  Rs. 35 Lakhs

    In the Revenue Books  - RJV

     DRF – 2113- 08  (Rolling Stock)             Debit   - Rs. 35 Lakhs

     Transfer Railway Capital (008782 44)       Credit   -  Rs. 35 Lakhs

·         There by, the Capital Account is reduced to that extent (because the asset is no longer in use and condemned) and the dividend liability also reduced correspondingly.

·         The DRF - Depreciation Reserve Fund Account is debited to that extent .  The logic is,  throughout the life period of employing the said Diesel Loco in Indian Railways, "Depreciation" on yearly basis is credited to the DRF (fund). 

·         Hence the amount Rs. 35 Lakhs was write back from Capital (by minus Debit/Credit) and added to DRF (by Debit).

·         Also the proceeds realized from the condemnation of Diesel Locomotive credited to DRF  by debit to Railways Fund in RBI/Nagpur (through RIB - Remittances Into Bank A/c)

·          The operation of Depreciation Account and policy of Depreciation in Indian Railways is entirely different from commercial organizations.  Instead of providing Depreciation on individual basis, the Railways is appropriation to DRF on entire block of assets employed in Indian Railways.  In this, there is no scientific policy in providing contributions to DRF and at large depend on available amounts at the Railways.


Differences between Write back and Write off

5 marks question in General Expenditure -1995 (WO),1997(WO) & 2001 (WO)

Write back
Write off
1. Resorted for regularisation of the incorrect allocation to any Head or write back of provision in original Head.
1. Used when the Railway administration relinquishes its right of claim for one reason or other for an amount (after the same is incorporated into regular accounts)

2.The correct account head is debited and minus debit to that from which the charges are written back.

Example: When the over aged coach (source of procurement is capital) is condemned, the original value of such asset i write back from the Capital as follows.

CAPITAL - 2100  - Minus Debit  --   xxxxx
       DRF - 2100  -  Debit              --   xxxxx
2. It mainly relates to bad debits such as irrecoverable amount of advance paid, loss of cash or stores due to theft, fraud or natural calamities, in efficient suspense balances, capital assets by amortisation etc.

3. It means to take reverse the original transaction i.e., write back for sufficient reason.
3. It means, a Debit balance in the books, but not possible to realise the same in future.   So Write off the same.

for article on Write Back adjustments