Value assets at cost or market price whichever is lower. Create contingency reserves for rise in liabilities or unexpected losses. These are the hallmarks of good accounting laws that Indian entities are supposed to adhere to. Many do so. But when it comes to compromising on conservative accounting for want of book profits, companies readily bend rules. Not the Reserve Bank of India(RBI) The Indian central bank is a true example of an entity that has its core values in the right place. An article in Economic Times recounts the conservative nature of RBI's accounting.

The recently published RBI annual report clearly shows the conservative policies in asset valuation. Particularly its gold and foreign currency holdings. The RBI does take the unrealized gains on such assets. On the other hand it creates reserve for fall in value of securities based on their market value. Such policies ensure that the fundamentals of the central bank remain solid. However, less profit get transferred to the government's coffers every year. We do not advocate any change in the RBI's conservative accounting policies. Doing so to aid government revenue growth will not help any purpose. At least the RBI is one PSU that government has chosen not to milk. We hope that remains the case.