Internal service fund

First of all let us understand the meaning of internal service fund .Basically it is proprietary fund and presented as such in the Financial statement of the organization .If in the organization ,required to maintain internal service fund then it should be there otherwise according to the GAAP (      generally accepted accounting principles) it is not required. internal service fund  counts for  on a flow of economic internal service fund and its require accrual basis of accounting

The advantages and disadvantages of internal service fund

First of all let us discuss  advantages of internal service fund as follow

1

internal service fund allow more efficient use of resources. because internal service fund is able to  increase or decrease resources according to the  to demand  of users

2

Internal service fund  provide more accurate accounting of the full cost of providing a

particular service.

3

Internal service fund  allow Better cost comparisons. because  in this ,users can  compare the cost of buying the service against the cost of different sector

4

Internal service fund  p allow better planning for capital acquisitions. It  accumulate funds to replace the  equipment on the event of  useful life expires.

Now let us discuss disadvantage as follow

1

Internal service fund is more complicated to understand

2

Internal service fund disparate the treatment

3

In the Internal service fund customer are disconnected . In any company customer  are not directly manage the Internal service fund operation so they are not able to manage the cost so we could say that customer are disconnected

4

In the Internal service fund  there is lack of choice because  in the most of the cases of most ISFs do not have true and competitive pressure to lower its  costs.