and reporting currency of the LGU. The accounting policies have been applied
starting the year 2015.
Note 3 - Summary of significant accounting policies
3.1 Basis of accounting
The consolidated financial statements are prepared on an accrual basis in
accordance with the IPSAS.
3.2 Consolidation
The controlled entities (funds) are all those over which the controlling entity
has the power to govern the financial and operating policies. Inter-group
transaction, balances and unrealized gains and losses on transactions between
entities and funds are eliminated in full. The LGU maintains special accounts
under the General Fund for the following economic enterprises it operates:
General Fund Proper
General Fund Market
General Fund Slaughterhouse
General Fund Waterworks
General Fund 20% Development
General Fund Tourism
General Fund Solid Waste Management
3.3 Revenue recognition
Revenue from non-exchange transactions
Taxes, fees and fines
The LGU recognizes revenues from taxes and fines when the event occurs and
the asset recognition criteria are met. To the extent that there is a related
condition attached that would give rise to a liability to repay the amount,
liability is recognized instead of revenue. Other non-exchange revenues are
recognized when it is improbable that the future economic benefit or service
potential associated with the asset will flow to the entity and the fair value of
the asset can be measured reliably.
Transfers from other government entities
Revenues from non-exchange transactions with other government entities are
measured at fair value and recognized on obtaining control of the asset (cash,
goods, services and property) if the transfer is free from conditions and it is
12
