 In the Jawaharlal Nehru
National Urban Renewal Mission (JNNURM) one of the mandatory reforms for
Urban Local Bodies (ULBs) is to shift from the existing cash based
accounting systems to accrual based accounting systems. In this connection
it is necessary to have true and fair position of their assets by proper
valuation. The parameter adopted by ULBs for the purpose may differ from
state to state. It is being suggested that assets whose value are not
known due to non-availability of records may be considered as the broad
parameter for valuation of assets by the municipality.
The National Institute
of Urban Affairs (NIUA) with the support of USAID – FIRE (D) Project is
entrusted the job by the Ministry of Urban Development (MoUD) to prepare
guidelines detailing out the broad parameters required for the fair
valuation of assets of ULBs for developing a model on the Municipal
Assets Valuation Guidelines for the Urban Local Bodies. The broad
focus of the guidelines, procedure and methodology for valuating the
municipal assets includes the method of identification and valuation of
municipal projects and fixed assets. It will also have guidelines and
development of forms to collect information about assets identification,
location and its use. It shall serve as assets management, forms and
formats to maintain assets register which comprehensively record and
monitor all the assets; their current and future values, its potential
service capabilities as well as acceptable system management processes for
the ULBs. The guideline shall also determine the useful life of municipal
assets, recognize the decline in asset values due to use and obsolescence
and an appropriate rate of their depreciation and amortization.
The development of the
report shall be in accordance with the principals, standards, accounting
policies, codes of accounts and classification, formats for budgeting and
financial statements.
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