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An Overview on Accounting Manual and Fixed Assets Manual of
SJIBL. Bank’s Accounting System, Chart of Accounts - Consequences
of Wrong Posting and Misreporting on Profitability and Customer
Satisfaction.
Presented
By
Md. Jafar Sadeq FCA
Chief Financial Officer
Shahjalal Islami Bank Limited

Contents
An Overview on Accounting Manual
1
Fixed Assets Manual
2
Bank’s Accounting System
3
Chart of Accounts -
4
Consequences of Wrong Posting and
Misreporting on Profitability
5

2. Recording of transactions
in compliance with BAS and
BFRS and the circulars and
guidelines issued by
Bangladesh Bank (BB).
4. To enhance internal control
and compliance, integrity of
financial information and
efficiency in transaction
processing.
1. To provide a comprehensive
idea about the recording of
transactions in the System i.e.
BankUltimus in day to day
operations.
3. To ensure uniformity and
consistency of accounting entries
made across different department
/division/unit/branch over time.
Accounting Manual of the Bank
Objectives of Accounting Manual:

Accounting Manual of the Bank
1. Introduction [Objective, scope, chart of accounts, designed of manual, Bank Ul timus,
Review]
2. Significant Accounting Policies
3. Accounting Entries of Branch and different Divisions:
Branch (Investment, General Banking & Foreign Exchange)
Financial Administration Division (FAD)
Treasury Division
Alternative Delivery Channel (ADC) -Card Division
International Division (ID)
Central Processing Center (CPC)
Bangladesh Automated Clearing House (BACH)
Off-Shore Banking Unit (OBU)
4. GL Chart of Accounts
5. Definition of different items
6. Glossary
Contents of Accounting Manual:

Fixed
Assets
Definition of Fixed Assets
Classification of Fixed Assets
Fixed Assets can be defined under the purview of Bangladesh Accounting
Standard 16 as tangible items that:
are held for use in the production or supply of goods or services, for
rental to others or for administrative purposes;
are expected to be used during more than one period.
.
Fixed Assets Manual
Tangible Assets
Land and Building
Furniture and Fixture
Office Equipment
Motor Vehicles
Computer and Network Equipment
Books
Leased assets
Intangible Assets
Software

Fixed Assets Manual
Content Here
Recognition of Fixed Assets
Acquisition of Fixed Assets
Recording of Fixed Assets
The cost of an item of property, plant and equipment shall be recognized as an asset if, and
only if:
it is probable that future economic benefits associated with the item will flow to the entity;
the cost of the item can be measured reliably.
Assets may be acquired by the following two ways:
1. By Purchase
2. By Lease
Fixed Assets Register will be maintained in the system and no manual register is required.
Fixed Assets Register in the system shall reflect the following information:
Description of the asset
Date of acquisition
Cost of Assets
Method of depreciation
Rate of depreciation
Depreciation for the year
Accumulated depreciation
Written down value of the assets
Identification number
Location of the asset, etc

Fixed Assets Manual
The only asset which is not depreciated is land. Depreciation of fixed assets shall
be calculated in the straight line as well as reducing balance method.
Depreciation of the assets will be charged from the date of acquisition. The basis of
calculating depreciation will be as follows:
A summary of Rate and Method of Depreciation of Fixed Assets at a glance:
Name of the Assets Rates of
Depreciation
Method of Depreciation
Tangible Assets:
Building 2.25% Reducing balance method
Furniture & Fixtures 10% Reducing balance method
Furniture & Fixtures- residence 20% Straight Line Method
Office Equipment 20% Reducing balance method
Computer & Network Equipment 20% Straight Line Method
Vehicles 20% Straight Line Method
Books 20% Straight Line Method
Intangible Assets:
Software 20% Straight Line Method
Depreciation of Fixed Assets:

Accounting is a systematic
process of recording, analyzing
and summarizing transactions of
an entity.
The transactions are
recorded in the books of
original entry
The transactions are then
analyzed and posted in the
Ledgers
Finally, the transactions
are summarized in the
Financial Statements
What is accounting?
The Objective of
Financial Statements
The Objective of Financial Statements is to
provide information about the reporting
entity’s financial position and financial
performance that is useful to a wide range of
users in making economic decisions.

Present and
potential
investors
Employees
Lenders
Suppliers and
other trade
creditors
Customers
Governments
and their
agencies
Governments
and their
agencies
Users of
Financial
Statements

Accounting Conventions:
There are four main conventions in practice in accounting: conservatism; consistency; full disclosure; a
nd materiality.
Conservatism Materiality
Consistency Full disclosure
Business entity concept
Money measurement concept
Dual aspect concept
Going concern concept
Cost concept
Matching concept
Realization concept
Accounting Concept:
Accounting concepts is basically the accounting rules that should be followed while preparing the
financial statements. Some Accounting concepts on which financial statements are prepared

The Golden Rule of Accounting
Liabilities
Owner’s
Equity
Assets
Component of Financial Statements
Balance Sheet Income Statement
Cash Flow Statement Liquidity Statements
Notes to the Financial
Statements
Statement of
Changes in Equity

Income
Elements of
Financial
Statements
Balance Sheet
Expenses
Assets
Liabilities
& Equity
Income Statement
The Financial Statements are prepared in accordance with:
The guidelines of Islamic Banking issued by
Bangladesh Bank through BRPD Circular # 15
dated 09.11. 2009
The Company Act 1994
The Bank Company Act 1991 (Amendment up
to 2018)
The Securities and Exchange Rules ,1987
Bangladesh Financial Reporting Standards
(BFRS)
International Accounting Standard (IAS) as
adopted by the ICAB
The Financial Reporting Act 2015
Listing Regulation of Dhaka Stock Exchange
& Chittagong Stock Exchange, and
Other applicable laws and regulations.

Accounting Information System (AIS)
An accounting as an information system (AIS) is a system of collecting, storing and processing
financial and accounting data that are used by decision makers. An accounting information system is
generally a computer-based method for tracking accounting activity in conjunction with information
technology resources.
AIS is a structure that a business uses to collect, store, manage, process, retrieve and report its
financial data so that it can be used by accountants, consultants, business analysts, managers, chief
financial officers (CFOs), auditors, regulators and tax agencies.
Inputs
Processes
Outputs
Storage
Internal
controls
Element of
Accounting &
Information
Systems

There is no common
structure or template
of chart of accounts
available for the use
of all types of
businesses.
Chart of accounts is
simply a list of account
names that a company
uses in its general ledger
for recording various
business transactions.
It provides guidance to
accountants or other relevant
persons in using specific
account names while entering
transactions in journal and
posting them to ledger.
Each company prepares its
own chart of accounts
depending on its individual
requirements.
The structure of a chart of
accounts is normally as complex
as the business structure of the
company.
Chart of Accounts

Balance Sheet
Assets
Liabilities &
Owner’s Equity
Income Statement
Operating Revenue
Non- Operating Revenue
Operating Expenses
Non- Operating Expenses
Chart of Accounts

Chart of Accounts
Asset GL
• It starts with the numeric “901”. That means, all the GL numbers
starting with “901” are assets.
Liability and
Equity GL
• Liability and Equity GLs begin with the numeric “902”. That is, all
the GL numbers starting with “902” are either Liability or Equity.
Income GL
• It starts with the numeric “904”. Therefore, all GL numbers starting
with “904” are incomes.
Expense GL
• It starts with the numeric “903”. So, all GL numbers starting with
“903” are expenses.

Misreporting
Branch [GB,
Investment,
Foreign
Exchange]
Financial
Administration
Division
Treasury
Division
Alternative
Delivery
Channel (ADC)
– Card Division International
Division
Central
Processing
Center (CPC)
Bangladesh
Automated
Clearing House
(BACH)

Consequences:
The overstatement/
understatement of Assets
The overstatement/
understatement of
Liabilities
The overstatement/
understatement of Income
The overstatement/
understatement of
Expenses
Typing errors
Record keeping – capital expenditure to
revenue expenditure or revenue
expenditure to capital expenditure
Human errors due to discrepancies in the
account number
Posting in wrong GL account
Wrong
posting

Example:
Total Income of X Bank Ltd. is Tk. 5,00,00,000 and Operating Expenses is Tk. 4,00,00 000 for the year 2019.
The Bank purchased an office equipment for Tk. 10,00,000/= during this year. Estimated useful life of the
equipment is 5 years. Use straight line method for depreciation. Calculate the Net Profit of the Bank for the year
2018. Rate of Depreciation is 20%.
1. If the cost of equipment is charged as revenue expenses, the result will be:
Particulars Taka Remarks
Operating Income 5,00,00,000
Less: Operating Expenses 4,00,00,000
Operating Profit 1,00,00,000
Less: Depreciation 2,00,000
Net Profit before tax 98,00,000
Income Tax @ 37.5% 36,75,000
Net Profit after Tax 61,25,000
2. If the cost of equipment is charged as capital expenditure, the result will be:
Particulars Taka Remarks
Operating Income 5,00,00,000
Less: Operating Expenses * 4,10,00,000
Operating Profit 90,00,000
Less: Depreciation ----
Net Profit before tax 90,00,000
Income Tax @ 37.5% 33,75,000
Net Profit after Tax 56,25,000
[ * Taka 4,00,00,000+10,00,000 = 4,10,00,000]

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