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    COA - C2005-002 (Acctg of Serviceable Assets)

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    JOHAYNIE
    This circular from the Commission on Audit in the Philippines establishes an accounting policy for classifying small tangible assets with a service life of over one year. It defines such assets as inventories to be expensed upon issuance rather than classified as property, plant and equipment subject to depreciation. Annex A provides a list of assets and their estimated useful lives that fall under this policy. Government entities must prepare an Inventory Custodian Slip for items issued and the Government Accounting and FMIS will develop guidelines for implementing the new policy effective July 1, 2005.

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    COA - C2005-002 (Acctg of Serviceable Assets)

    Uploaded by

    JOHAYNIE
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    This circular from the Commission on Audit in the Philippines establishes an accounting policy for classifying small tangible assets with a service life of over one year. It defines such assets as inventories to be expensed upon issuance rather than classified as property, plant and equipment subject to depreciation. Annex A provides a list of assets and their estimated useful lives that fall under this policy. Government entities must prepare an Inventory Custodian Slip for items issued and the Government Accounting and FMIS will develop guidelines for implementing the new policy effective July 1, 2005.

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    Accounting of Serviceable Assets

    Original Title

    COA_C2005-002 (Acctg of Serviceable Assets)

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    This circular from the Commission on Audit in the Philippines establishes an accounting policy for classifying small tangible assets with a service life of over one year. It defines such assets as inventories to be expensed upon issuance rather than classified as property, plant and equipment subject to depreciation. Annex A provides a list of assets and their estimated useful lives that fall under this policy. Government entities must prepare an Inventory Custodian Slip for items issued and the Government Accounting and FMIS will develop guidelines for implementing the new policy effective July 1, 2005.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    50 views2 pages

    COA - C2005-002 (Acctg of Serviceable Assets)

    Uploaded by

    JOHAYNIE
    This circular from the Commission on Audit in the Philippines establishes an accounting policy for classifying small tangible assets with a service life of over one year. It defines such assets as inventories to be expensed upon issuance rather than classified as property, plant and equipment subject to depreciation. Annex A provides a list of assets and their estimated useful lives that fall under this policy. Government entities must prepare an Inventory Custodian Slip for items issued and the Government Accounting and FMIS will develop guidelines for implementing the new policy effective July 1, 2005.

    Copyright:

    © All Rights Reserved
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    Download as pdf or txt
    of 2

    Republic of the Philippines

    COMMISSION ON AUDIT
    Commonwealth Avenue, Quezon City

    CIRCULAR

    No. :

    2P0.5 002,

    Date:

    APR

    1 4 2005

    All Heads of National Government Agencies, Local Government


    Units and Government Owned and/or Controlled Corporations; Heads of
    Financial Management Services/Comptrollership Departments, Heads of
    Accounting Units; Heads of Budget Units; COA Assistant
    Commissioners, Directors, Auditors; and All Others Concerned

    TO:

    SUBJECT: ACCOUNTING POLICY ON ITEMS WITH SERVICEABLE LIFE


    OF MORE THAN ONE YEAR BUT SMALL ENOUGH TO BE
    CONSIDERED AS PROPERTY, PLANT AND EQUIPMENT

    1.0 RATIONALE/OBJECTIVE
    Section 2 (2), Article IX-D of the 1987 Philippine Constitution mandates the
    Commission on Audit to "xxx promulgate accounting and auditing rules and
    regulations xxx"
    In line with this mandate, this Commission hereby sets forth the policy by
    which government assets may be categorized as Property, Plant and Equipment
    (PPE), and as Inventories.
    2.0 POLICY
    2.1 The New Government Accounting System (NGAS) adopts the definition of
    Property, Plant and Equipment under the International Accounting Standards
    No. 16 which states that:
    "Property, Plant and Equipment are tangible assets that:
    (a) are held by an enterprise for use in the production or supply of
    goods or services, for rental to others, or for administrative
    purposes; and
    (b) are expected to be used during more than one period."

    2.2 However, there are tangible assets with serviceable life of more than one year
    but small enough to be considered as PPE. To address this issue, the
    Commission hereby prescribes the following policies:
    2.2.1 Small tangible items with estimated useful life of more than one year
    shall be recorded as inventories upon acquisition and as expense upon
    issuance. The list of these items with corresponding estimated useful life
    is attached as Annex A, hereof.
    2.2.2 Other tangible assets not included in the list per Annex A shall be
    classified as PPE, subject to depreciation.
    2.3 For monitoring, control and accountability, an Inventory Custodian Slip (ICS),
    attached as Annex B, shall be prepared upon issuance of small tangible items
    covered by approved Requisition and Issue Slip (RIS).

    3.0 IMPLEMENTING GUIDELINES AND PROCEDURES


    The Government Accounting and FMIS (GAFMIS), this Commission, shall
    prepare the necessary guidelines and procedures to implement this policy.

    4.0 SAVING CLAUSE


    Cases not covered in this Circular shall be referred to GAFMIS, COA for
    resolution.

    5.0 REPEALING CLAUSE


    All issuances inconsistent herewith are amended or repealed accordingly.
    6.0 EFFECTIVITY
    This Circular shall take effect July 1, 2005.

    G LLERMO . CARAGUE
    Chairman

    GAFMIS
    LBD/CSP/MML/PSP/aap

    6),

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