1.2.14. Revenue from exchange transactions shall be recognized upon receipt of assets or services, or extinguishment of liability, and directly gives/renders service of approximately equal value.

1.2.15. All collections of the barangay shall accrue to the General Fund unless otherwise provided by law.

1.2.16. Payment in kind shall be recognized at fair value.

1.2.17. Expenses shall be recognized when incurred.

1.2.18. All lawful expenditures and obligations incurred during a fiscal year shall be taken up in the accounts of that year.

1.2.19. Liabilities shall be recognized at the time goods and services are accepted or rendered.

1.2.20. Inventories shall be reassessed to lower of cost and net realizable value or replacement cost if held for distribution/consumption at every reporting date.

1.2.21. Supplies and materials including drugs and medicines shall be recorded in the appropriate Inventory account. The cost of the inventory items shall be assigned using the weighted average method.

1.2.22. When inventories are sold or utilized, the carrying amount of those inventories shall be recognized as expense. Any write-down of inventories shall be recognized as an expense in the period the write-down occurs.

1.2.23. Biological Asset shall be recognized and revalued to its fair value less cost to sell at acquisition and every reporting date.

1.2.24. Property, plant and equipment (PPE) shall be recognized as assets if it is probable that the future economic benefits or service potential associated with the PPE will flow to the entity, and the cost or fair value of the item can be measured reliably.

1.2.25. PPE shall be recorded when actually received.

1.2.26. Property (land and building) held to earn rentals or for capital appreciation or both shall be classified as Investment Property and measured at cost.

1.2.27. PPE used in barangay operation shall be subject to depreciation using the straight line method after deducting a residual value equivalent to 5 per cent of the cost of the property and equipment.

1.2.28. Depreciation of an asset begins when it becomes available for use (when it is in the location and condition necessary for it to be capable of operating in the manner intended by management).

1.2.29. All public infrastructures shall be recognized as asset in the books of accounts and shall be provided with depreciation in the same manner as PPE.

1.2.30. Impairment for all assets shall be recognized whenever the carrying value is more than the recoverable amount.

1.2.31. All borrowings and secured loans shall be recorded in the barangay books using the appropriate liability accounts. It shall be measured at amortized cost.

1.2.32. A monthly Bank Reconciliation Statement shall be prepared by the C/M Accountant upon receipt of the bank statement.

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