When the operations of a department include undertakings of a commercial or quasi commercial character, and the nature and scope of the activities of the undertaking are such as cannot suitably be brought within the normal system of Government account, the head of the undertaking should be required to maintain such subsidiary and pro forma accounts in commercial form as may be agreed between Government and the Accountant-General. The methods and principles in accordance with which such accounts are to be kept including inter alia the basis to be adopted for valuation of assets and for allocation of expenditure between capital and revenue accounts and the extent to which provision should be made in those accounts for bad debts, depreciation and other forms of indirect charges, e.g., cost of management and supervision, audit charges, interest on capital expenditure, etc., will be regulated by orders and instructions issued by Government in each case. Where the commercial accounts are maintained for the purpose of assessment of the cost of an article or service, the head of the undertaking should see that adequate regulations are framed with the approval of Government in order to ensure that the cost deduced from the accounts is the accurate and true cost. He should also arrange to obtain the orders of Government regarding the nature and form of subsidiary accounts, and statement, if any, which should be appended to the Appropriation Accounts of each year, and submit such accounts and statements to the Accountant-General on such date as may be required by him.Other Pro forma Accounts
