Short Answer

Societies are required to follow specific accounting standards as per the Gujarat Cooperative Societies Act, 1961 and Gujarat Cooperative Societies Rules, 1965.

Detailed Explanation

Section 81 of the Gujarat Cooperative Societies Act, 1961 mandates that every society shall maintain proper books of accounts based on double-entry system and shall prepare an annual statement of accounts. This means that societies are required to maintain their financial records in a structured manner following the double-entry accounting system. The annual statement of accounts should reflect the financial position of the society accurately.

Rule 77 of the Gujarat Cooperative Societies Rules, 1965 further elaborates on the accounting standards to be followed by societies. It specifies that the accounts of the society shall be maintained in accordance with the provisions of the Act, Rules, and the accounting standards issued by the Institute of Chartered Accountants of India (ICAI). This implies that societies must adhere to the accounting standards prescribed by the ICAI while maintaining their financial records.

In practice, this means that societies cannot use a simple cash basis for accounting purposes. They are required to maintain their accounts using the double-entry system and comply with the accounting standards specified by the ICAI. By following these standards, societies can ensure transparency, accuracy, and reliability in their financial reporting.

Practical Examples

• Scenario 1: A cooperative housing society in Gujarat maintains its accounts using the double-entry system as mandated by Section 81 of the Act. They prepare their annual statement of accounts in compliance with the accounting standards prescribed by the ICAI.

• Scenario 2: A cooperative credit society follows the accounting standards issued by the ICAI while maintaining its financial records, ensuring that all transactions are accurately recorded and reflected in the annual financial statements.

• Scenario 3: A cooperative agricultural society keeps detailed financial records based on the double-entry system, enabling them to track income, expenses, assets, and liabilities effectively.

References

• Section 81 of the Gujarat Cooperative Societies Act, 1961

• Rule 77 of the Gujarat Cooperative Societies Rules, 1965