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FIRE-D : Ongoing Study

 

Municipal Asset Valuation Guidelines for ULBs


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.