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Uniform system of accountancy


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Uniform system of accountancy

  1. 1. For 3rd & 4th Sem
  2. 2. Hotel or Hospitality is the largestindustry in India as well as entireworld .Most of countries try to attractthe tourist through launching ofattractive tourist places which mayable to fulfill their ambition of joy andpeace both. This industry is soul of servicesector because this industry is cause ofhighest rate of return to theinvestors/potential investors.
  3. 3. Hotel industry generates thousandsjobs by way of room service,production of food ,restaurant serviceand at different managerial levels . Sopeople with the ambition of highprofessional skills join the institute like IHM Dehradun provide theprofessional training matching withinternational standards .
  4. 4. So in hotel/hospitality industry commonaccounting systems are followed . It ishelpful to candidates at the time ofselection as manager or other managerialposts . Same accounting system or uniformaccounting system helpful to understandthe financial procedures and policies of theadministration . The most successful system ofaccounting was the one introduced by thefederation of master printers in 1911 andlater in march 1926 AHMA ( Americanhotel and motel association ) accepted thedraft of system of uniform accounting .
  5. 5. Causes /reasons /objectives of adopting uniform system of accountancy1. Existence of different systems of book-keeping :- indifferent countries different methods of book-keeping werepopular . For example : In UK double entry system waspopular on the other hand in INDIAN SUB CONTINENT IndianAccounting System (Bhartiya Bhahi Khata Pranali) waspopular . But in USA Accounting system is based onACCOUNTING EQUATIONS. Under such circumstances hotelindustry needs an uniform accounting system become a must. 2. Size of business :- after induction of GATT and WTO mostof big industrial houses decide to open multinational chain ofhotels. As a result size of business of hospitality industryexpanded crosses the boundaries of countries. So expansion ofbusiness , administration needs a common system ofaccounting through which they can understand the financialactivities in the terms of turnover ,cost and profitability .
  6. 6. 3. Method Of Production Of Food and Services:-In hotel industries food and service are the twomain elements of activities of industry but it isdiffer from manufacturing/construction/husbandry industry . Uniformaccounting system facilitates a specialized systemsuited accordance with hotel industry . 4. Difference in Apportionment :- There can bea large degree of difference in the accountingtreatment of expenses ,different bases ofcollection ,absorption of overheads , method ofdepreciation ,etc. Moreover in departmental typehotel spend different expenses combinedly andlater distribute /allocate /apportioned theexpenses in any logical manner .
  7. 7. 5.Nature of Activities :- Normal business isworking 8, 10 or 12 hours but in hotelindustry nature of activities differ fromnormal business houses because hotelprovides its services round the clock 24*7, soin case of hotels special system ofaccounting is needed for hotels.
  8. 8. 1.Transfer Of Employees :- Under the global expansionof hotel industry administration may decide to transfer the employees from one country to another . Under such situations employee may faces the difference in method of accounting .But due to the efforts of PUSA INSTITUTE /IHM students clearly understand the Uniform system of accounting .Now it is easier for fresher /transferred candidates to familiar with accounting system of next destination . 2.Comparision Of financial Results :- At the end of each financial year /accounting year owner or board of directors asses the financial statements/financial results for the two accounting periods or between the two branches of hotel for the same period andthereafter decide the corrective step for future .it willbe helpful to increase the efficiency of subordinates .
  9. 9. 3.Share Buying Decision :- At the time of merger oftwo or more hotels value of each share is decidedon any logical basis which is helpful at the time ofvaluation of NETWORTH of different hotels .Through this assessment financial management takethe appropriate decision in direction to enjoy thefruitful profits in future . 4.Helpful for tax authorities :- At the end of each financial year financial statements are filed with income tax authorities by hotels like other business houses . But nature of service industries are different . In this case Uniform accounting system is helpful to income tax authorities for the purpose of tax liability of particular hotel
  10. 10. 5.Decision About Lease :- In hotel industry it is acustom that owner of building granted lease toprofessional people who has experience abouthotel industry/hospitality industry . At the timeof taking the lease of a hotel uniform accountingsystem is helpful during the estimation of futureprofits . Moreover this system helps about thegrowth rate of such hotel in recent years . 6. Classification Of Transactions :- Uniform accounting system is helpful to classify the transactions on the basis of services available at hotel like room service ,food and beverage department service , outdoor events arrangement service ,package offers, bar department etc. so Uniform accounting system helpful to classify the transactions.
  11. 11. 7.Helpful In Rating Of Hotel :- Goodwill of ahotel depends upon rating given byInternational governing council For Hotels. Thisrating is based on number of services availablein hotel, hygiene conditions at kitchen andaccounting procedure adopted by the hotel .Inthis case uniform accounting system plays vitalrole in rating of hotel .8.Adjustment Of Depreciation :- According touniform accounting system a fix procedure ofdepreciation must be adopted by hotel industry.It helps to adjust the book value of assetsaccording to CPP (Current Purchasing Price ) .