3.2. Further, paragraph 34 of the same Standard provides that “There is a presumption
that fair value can be measured reliably for a biologic asset. However, that
presumption can be rebutted only on initial recognition for a biological asset for
which market-determined prices or values are not available, and for which
alternative estimates of fair value are determined to be clearly unreliable. In such a
case, that biological asset shall be measured at its cost less any accumulated
depreciation and any accumulated impairment losses. Once the fair value of such a
biological asset becomes reliably measurable, an entity shall measure it at its fair
value less costs to sell. x x x”
3.3. Relative thereto, COA Circular No. 2016-004 dated September 30, 2016 was issued
to provide instructions in the conversion of accounts to the new chart of accounts.
Section 4.5 thereof requires the Municipal Agriculturist to provide the Municipal
Accountant the following reports in order that the biological asset accounts in the
financial statements are presented fairly in the financial statements:
“4.5.1 Provide the inventory of breeding stocks and other biological assets,
and the prevailing market price for each item as of reporting date; and
4.5.2 Provide information on the prevailing cost to sell of the biological
assets.”
3.4. Review of the financial statements as of December 31, 2024 showed that the
Biological Assets account with a balance of ₱11,741,439.97 was composed of the
following:
Particulars Amount
Breeding Stocks ₱ 1,294,856.00
Plants and Trees 10,446,583.97
Total ₱ 11,741,439.97
3.5. We conducted an inventory of the breeding stocks on January 27, 2025. However,
the Municipal Agriculture Office had no breeding stocks in its custody. According
to the OIC – Municipal Agriculturist, all breeding stocks had been distributed to
individual recipient farmers before CY 2024, and no dispersal of breeding stocks
took place in CY 2024.
3.6. In addition, the Municipal Accountant, in the Notes to the Financial Statements,
disclosed that Biological Assets amounting to ₱11,741,439.97 have remained non-
moving for over five years. Efforts are currently underway to reconcile the physical
count with the accounting records, and the accounting unit will make the necessary
adjustments in the books of accounts.
3.7. Due to the foregoing, the existence and condition of these biological assets cannot
be ascertained. Furthermore, the said accounts were not reported at fair value less
cost to sell as of December 31, 2024, in consonance with the aforementioned
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