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51 different forms to record and report the transactions and thus named as Faram Shresta
Pranali. In this way, after 1968 B.S. and until the implementation of New Accounting
System of Government of Nepal, there were two accounting systems, Shyaha Shresta
Pranali in the Mountainous region and Faram Shresta Pranali in the Terai region and
Kathmandu valley. Since, the autocratic Rana rulers did not give any importance to the
accounting system and to the entire financial administration, the accounting system could
not be developed during the period of Rana-Regime.
After the historical movement of 2007 B.S., the autocratic Rana Regime was overthrown
and democratic government was established in the country. Since, then the government
seemed to be more responsible for the people, the government declared budget system for
the first time, in the country, in 2008 B.S. to let the people know about the government’s
projected revenues and expenditures. Again, economic planning was started from 2013
B.S. for the balanced economic development of the country. But because of the lack of
appropriate accounting system, the necessary data, figures, and other financial information
could not be obtained for the preparation of a sound budget and economic plans and
for their implementation. Thus, the government felt the necessity of an appropriate
accounting system for recording the government transactions. But due to the political
instability and lack of the guiding rules during the first decade of the democratic era,
such an accounting system could not be introduced. Thus, in the year 2016 an Act called
“Procedural Rules for Government Fund Expenditure 2016” was passed and enacted by
the government in order to establish the uniformity in financial administration. On the
other hand, the Auditor General was appointed as per the `Constitution of Nepal 2015’
as a constitutional body to check the frauds and misappropriation of government budget
and to audit the accounting thereto.
After the enactment of the Act “Procedural Rules for Government Fund Expenditure
2016”, Bhuktani Shresta Pranali (Payment Accounting System) was introduced in 2017
B.S., which was based on the principle of double entry system. But within a very short
period, it was proven to be insufficient to cover the government transactions, specially
the revenues, foreign aids and donation and budget transfer, etc. Thus, it was replaced,
in a short time, by New Accounting System, which is still in use throughout the country.
Even though the political system was changed from multiparty democratic system to
partyless Panchayat System, it did not disturb the development of accounting. Because of
some serous limitations of the Payment Accounting System, a new accounting system was
introduced as per the recommendation of `Accounting Committee 2017’. It replaced the
Payment Accounting System and all other old accounting systems. It is completely based
on the principle of double accounting system. This system is used, nowadays throughout
the country.
Payment Accounting System was replaced by the New Accounting System in the fiscal
year 2019/020 as per the recommendation of the ‘Accounting Committee 2017’. It was
aimed to remove the difficulties and limitations of old accounting systems and even of the
Payment Accounting System and to establish uniformity in account keeping throughout
the country.

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