Managerial Accounting in Nepalese Perspective

Last Updated: 20 Apr 2022
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An isolated, agrarian society until the mid-20th century, Nepal entered the modern era in 1951 without schools, hospitals, roads, telecommunications, electric power, industry, or civil service. The country has, however, made progress toward sustainable economic growth since the 1950s and is committed to a program of economic liberalization. Nepal is among the poorest and least developed countries in the world, with with about one-quarter of its population living below the poverty line.

Agriculture is the mainstay of the economy, providing a livelihood for three-fourths of the population and accounting for a little over one-third of GDP. Industrial activity mainly involves the processing of agricultural products, including pulses, jute, sugarcane, tobacco, and grain. Nepal has considerable scope for exploiting its potential in hydropower, with an estimated 42,000 MW of feasible capacity, but political instability hampers foreign investment.

Additional challenges to Nepal's growth include its landlocked geographic location, civil strife and labor unrest, and its susceptibility to natural disaster. Nepal is also slowing changing from the manufacturing to the service sector. Also, remittance is found to have a major impact in our economy in this era. Remittances to Nepal are money transfers from Nepalese workers employed outside the country to friends or relatives in Nepal. The record of banking sector showed that NPR 15. 9 billion was received in FY. 2000/01.

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It is said that remittances has represented more than 10 percent of GDP in Nepal in the late 1990s. Moreover, it would be highly beneficial to the country, where there is natural calamities, political conflict, people war, low investment in entrepreneurial activities and economic recession. In Nepal, the dollar value of remittances expanded 17 percent, supported in part by vibrant growth in India, a key source-country for Nepalese remittances. However due to many problem, such as political instability, security etc the government of Nepal has not achieved success. Read about emerging business environment in Nepal

Due to these problems multinational companies are hesitating to establish their subsidiaries here, many Nepalese companies have been collapsed. Nepalese companies are facing technology problem which is changing rapidly. Even than as the people and the investors have been able to understand the opportunity and the huge market availability in the neighboring countries and throughout the global after the country’s entry into the WTO, functions and importance of management accounting has been realized by the business people and companies.

So it has lmost become mandatory to understand and use management accounting tools to grow and sustain oneself in today’s rapidly changing and competitive global market. Consistent with other roles in today's corporation, management accountants have a dual reporting relationship. As a strategic partner and provider of decision based financial and operational information, management accountants are responsible for managing the business team and at the same time having to report relationships and responsibilities to the corporation's finance organization.

Managerial accounting is the process of preparing management reports and accounts that provide accurate and timely financial and statistical information required by managers to make day-to-day and short-term decisions. Unlike financial accounting, which produces annual reports mainly for external stakeholders, management accounting generates monthly or weekly reports for an organization's internal audiences such as department managers and the chief executive officer.

These reports typically show the amount of available cash, sales revenue generated, amount oforders in hand, state of accounts payable and accounts receivable, outstanding debts, raw material and inventory, and may also include trend charts, variance analysis, and other statistics. Thus, as the country is changing so is its need for accounting in a different manner. The management of Nepalese corporations need a different accounting procedure and thus, the need of management accounting is highly imporatant in the Nepalese perspective.

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Managerial Accounting in Nepalese Perspective. (2018, Feb 26). Retrieved from

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