New Delhi, Feb. 8: The Institute of Chartered Accountants of India (ICAI) is in talks with the ministries of railways and defence to change the way these behemoths do their accounting.

Newly-elected ICAI president Sunil Goyal said, “We are recommending to the government that the accounting procedure in these two ministries must be changed from single-entry to the double-entry system.”

“An equal amount of interest has been shown by these ministries to switch over to the double-entry method of accounting,” Goyal added.

The double-entry system of accounting is based on accruals. The cash-based system, on the other hand, is based on receipt and payments only.

“In the double-entry system, the organisation is clear about its assets and liabilities, which is not the case under the single-entry system,” he said.

All the companies follow the double-entry system, whereas single-entry is the quintessential norm in the government account books.

When the department of telecommunications (DoT) metamorphosed into a corporatised entity as Bharat Sanchar Nigam Limited (BSNL), it shifted from the single-entry to the double-entry system, ICAI officials said.

“Whenever an organisation needs to go to the capital market, or borrow funds, or go in for equity shares, it is imperative for it to show its balance sheet,” said a senior ICAI official.