Differences between Gross Receipts and Gross Earnings

1989 (wo), 1990 (wo) & 1995 (w) - 5 marks

DIFFERENCES BETWEEN

S.N.	Gross Receipts	Gross Earnings
1	Actual is the basis	Accrual is the basis.
2	Actually realized during the accounting period i.e., financial year. (irrespective of pertaining to previous year or next year)	Accrued during the accounting period i.e., financial year ( irrespective of whether actually realized or not)
3	Represents Gross earnings plus Traffic Suspense.	Represents Coaching Earnings plus Goods Earnings plus Sundry Earnings ( less refunds)
4	Conforms Government accounts	Conforms Commercial Accounts

Write back adjustments

WRITE BACK ADJUSTMENTS IN INDIAN RAILWAYS

• 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.

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Differences between Write back and Write off

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

DIFFERENCES BETWEEN

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

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Differences between Capital & Capital Fund

DIFFERENCES BETWEEN

CAPITAL	CAPITAL FUND
1. External source (given by Ministry of Finance)	1. Internal source ( Surplus available after paying Dividends and appropriating to DF, RSF )
2. Dividend to be paid on Capital provided by Ministry of Finance.	2. Dividend need not be paid, since it is a surplus after meeting all obligations of Railways.  On the other hand, Interest is credited to the Capital Fund on the balance of the Fund at the end of financial year.  (Rate of interest is equal to the Dividend rate and recommended by RCC from time to time)
3. Rules of allocation is prescribed in chapter V of Finance Code volume I.  They are a) cost of first construction b) Land c) Cost of construction of quarters.	3. No separate rules existing for utilizing this Fund usually charged to all Plan Heads (except Plan Heads 11 & 51).  However in current years, the Capital Fund is utilized for meeting the Plan Head 2200 - Principal component of lease charges payable to IRFC

Differences between IRCA & IRFA

Differences between IRCA & IRFA transactions

IRCA transactions	IRFA transactions
1. Expand : Indian Railway Conference Association.	1. Expand: Indian Railway Financial Adjustments.
2. Chargeable to : Demand No.09G-740-33	2. Chargeable to Demand No.09G-750-33
3. IRCA is authority for carrying out adjustments among all Zonal Railways.  Debits are raised by Northern Railway on other Zonal Railways based on the advice of IRCA.	3. Zonal Railways are responsible for raising charges on other Railways.
4. Pertaining to Goods Wagons only ( for Pakistan & Bangladesh Rly – All Rolling Stock)	4. Pertaining to Locos (Dsl & Electrical) & Coaches.
5.   A.Charges / Receipts relating to inter charged Stock (Goods wagons only) of Indian Railways-(i) Repairs, (ii) maintenance (iii) Depreciation                     B. Charges relating to Inter-change of all Rolling Stock with Foreign Railways(e.g. Pakistan and Bangla Desh Railways)	5..Will record the receipt / charges on account of adjustments carried out amongst Indian Govt. Railways on account of (i) Repairs, (ii) Maintenance and (iii) Depreciation in respect of rolling stock (other than goods wagons i.e., Locos & Coaches) of one Railway in use on other Railways.
6.Basis for calculation: Wagon balance is the net difference between the ownership and the actual holding of wagons of Zonal Railway.  On a particular day, if a particular Rly holds less number of wagons that it owns on a particular day, it is entitles to hire charges for balance of the Wagons.  Conversely the Rly holding more wagons that its own is liable to pay hire charges for the excess number of Wagons it holds.	6. Basis for calculation: (A) Locos : Debits will be passed on by the owning Railway to the using Railway at the unit cost based on the total engine hour on outage basis (i.e. from the time it leaves from the shed & till it returns to the shed) earned by the engines on the using Railway. (B) Coaches: The credit/debit adjustments should be worked out on the basis of kilometres earned by through rakes/passenger coaches running on more than one railway system. Vehicle kilometres in respect of through coaches should be worked out on the basis of the working time table periods and the rake links.

Note: Codal provisions in respect of IRCA & IRFA -Para 869 of Finance Code vol. One - Click for  Chapter 8th of Finance Code Volume One

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RITES

RITES

Click below for official website of RITES

https://ritesltd.com/

 

·         Incorporated in the year 1974 as a Public limited company under the Companies Act, 1956

·         Full form : Rail India Technical & Economic Service

·         A Government of India Enterprise under the aegis of Indian Railways. Hqrs: Gurgaon, Haryana

·         Multidisciplinary organization of Consultants, Engineers and Project Managers in transport & infrastructure sectors.

·         Offers comprehensive services from concept to commissioning of projects in Railways, Urban transport, Highways, bridges, renewable energy and export packages of rolling stock and railway related equipment.

·         RITES is the nominated agency of Indian Railways for export of rolling stock manufactured at the Production Units of Indian Railways.

·         A Mini Ratna Enterprise, Schedule A, an ISO 9001-2008 company

·         Operational experience of 43 years

·         Global presence -- extended its services in nearly 62 countries

·         Only export arm of Indian Railways for providing rolling stock overseas (other than Thailand, Malaysia and Indonesia).

·         Integrated Check Posts  - RITES has completed these Posts at the borders of neighbouring countries in a first of its kind project in India.   These are the world-class facilities for passenger & cargo movement in similar to Airports. Examples:  Attari check post on India-Pakistan border, Petropole check post on Indo-Bangladesh border, Agartala check post on Indo-Myanmar border.

·         SAIL RITES Bengal Wagon Industry Pvt. Ltd - Joint venture of RITES & SAIL - with the object of setting up of State-of-the-art Wagon factory at Kulti, West Bengal   - Assured off-take by Indian Railways for manufacture of 1200 high end specialized wagons and rehabilitation of 300 wagons per year.

·         Financials -2016-17

v  Profit after tax - 331 Crores

v  Rs.10.34 lakhs  - Profit per employee  (Total employees -3200)

v  Total Income 1509 Crores

v  Share Capital -200 Crores

v  Profit after tax to Share Capital  -  166 %

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Alert - Appendix 3 Examination

Appendix 3 Exam, 2018 notification is likely to be announced by Railway Board in due course.  Be alert, dust off  the books and start preparation.  Early bird catches the worm. 

Note: Heard it through the grapevine. No inquiries please. If announced, the notification is available in the below link.

Accounts Directorate of Railway Board

List of Railway PSUs

Railway PSUs – Public Sector Undertakings & other Orgnizations

SN	PSU	FULL FORM
1	RITES	Rail India Technical & Economic Services ltd
2	IRCON	IRCON International ltd (former name -Indian Railway Construction Company ltd )
3	CRIS	Centre for Railway Information Systems
4	IRFC	Indian Railway Finance Corporation
5	CONCOR	Container Corporation of India ltd
6	KRCL	Konkan Railway Corporation Limited
7	RCIL/RAILTEL	Railtel Corporation of India Limited
8	IRCTC	Indian Railway Catering and Tourism Corporation ltd
9	PRCL	Pipavav Railway Corporation Limited
10	RVNL	Rail Vikas Nigam Limited
11	RLDA	Rail Land Development Authority
12	DFCCIL	Dedicated Freight Corridor Corporation of India Limited
13	MRVC	Mumbai Railway Vikas Corporation ltd
14	BWEL	Bharat Wagon & Engineering Co. Limited
15	BSCL	Burn Standard Company Limited
16	BCL	Braithwaite & Company Limited