Page 182 - Account 10

3. Historical Development of Government Accounting in Nepal
There is not any evidential proof about the origin of accounting system in Nepal.
Lichchhavi and Malla periods were of great importance from the viewpoint of financial
administration. During the Lichchhavi period, the government revenues were collected
from Panchali (local government body), Guthi (trust), Jinsi Kar (property tax), Sharmdan
(voluntary work), etc. and expenditures were made for war, renovation, construction
and repairs of temples, tapes, ponds, holy-shrines and worshiping expenses, etc. During
Malla period, with the beginning of a trade relation with Tibet, revenues from customs
and trade were also added in the line of government revenue and expenses were incurred
on the same head but to larger and more frequent extent. Thus, accounting is found to
have started form the Lichhavi period in a form according to the need and knowledge of
the ruler and then continued onward to the Malla period. But such an accounting system
was not scientific and long lasting.
The need of accounting was felt necessary with the increase of transactions, in course of
time. Later, in the beginning of the unification of Nepal in 1825 B.S., it is believed that a
memorandum record of government revenues and expenditures as an accounting system
was developed to maintain. In this regard, two books called Laldhadda and Mothdhadda
were introduced in the years 1871 and 1879 B.S. respectively. The book Laldhadda was
used to record the government revenues and administrative expenditures whereas the
book Mothdhadda for recording the transactions of Kipat Byabstha (land management).
These two books have proven to be the foundation for the origin and development of
accounting system in Nepal. In the year 1925 B.S., an office, called, ‘Nepal Kitabkhana’ was
formed to register the name of the government employees and to record the salaries paid
to them, which is still in use to record the salary transactions and the pension transactions
of the retired government employees. The accounting record of salary expenses used to
be recorded in Kaushi Tosha Khana, a section under Kitab Khana.
Again, with the passage of time, transactions were also increased in different sectors
like land revenue in the name of Malpot (land tax), revenue from forest, trade and
customs, etc. in the revenue side and war, peace and security, religious activities, salaries
to the government employees, administrative expenses, government subsides, pension
expenses and other developmental expenditures on the expenditure side. Such an
increase in government transactions led the development of accounting system in the
country. Towards 1936 B.S. Khardar, Gunwanta, a senior official of that time, introduced
a new sort of accounting system called Shyaha Shresta Pranali, with a view to record
the government revenues and expenditures in a simple, uniform and systematic way so
as to exhibit revenues and expenditures in a simple, uniform and systematic way, and
to exhibit the actual position of the government revenue and expenditure. This system
remained in practice in the country till 2022/23 fiscal year and ultimately replaced by the
New Accounting System of Government of Nepal.
Even though Shyaha Shresta Pranali was comparatively more systematic and scientific
accounting system, it could not cover the numerous and complicated transactions in the
Terai-region of the country. As a result, in about 1968 B.S. Faram Shresta Pranali (Form
Accounting System) was introduced and brought into practice in the Terai region. It had

182 Aakar’s Office Practice and Accountancy - 10 Government Accounting System 183