6.6 Paragraph 27 of IPSAS 17 states that financial statements shall fairly present an
entity's financial position, financial performance, and cash flows. Fair
presentation requires the faithful representation of the effects of transactions,
other events, and conditions according to the definitions and recognition criteria
for assets, liabilities, revenue, and expenses set out in IPSASs.
6.7 Fair presentation of the financial statements (1) reflects sound financial
management and reporting; (2) promotes transparency and efficiency in
government operations; and (3) aids in the decision-making of Management and
its intended users, which ultimately benefits the agency and public as a whole.
6.8 In view of the foregoing, the non-implementation of the change in accounting
policy affects the fair presentation of the affected accounts in the financial
statements.
6.9 Management has already started classifying newly purchased semi-expendable
property to the appropriate account. Reclassification of remaining semi-
expendable property in the PPE account will also be addressed through the on-
going reconciliation as part of the one-time cleansing of PPE.
6.10 We recommended and Management agreed that the CAO review all items
lodged in the PPE account, filter tangible items below ₱50,000.00 to be
accounted for as semi-expendable property, and thereafter effect necessary
adjustments in the books of accounts.
6.11 Further, we recommended and Management agreed to institutionalize the
implementation of internal control mechanisms for the semi-expendable
property provided for in COA Circular No. 2024-006 dated March 14, 2024,
and for the City General Services Officer (CGSO) to prepare the necessary
forms, registry, and reports prescribed by the same Circular.
PPE items totaling ₱4,655,979.35 do not meet the asset recognition criteria
7. The Buildings, Hospitals and Health Centers, and Motor Vehicles accounts of the
City include items, totaling ₱4,655,979.35, that do not meet the asset recognition
criteria, contrary to IPSAS 1 and 17, and Section 4.2 of COA Circular No. 2020-
006 dated January 31, 2020, thus affecting the fair presentation of these accounts
in the financial statements.
7.1 According to paragraph 27 of IPSAS 18, fair presentation requires a faithful
representation of the effects of transactions, other events, and conditions in
accordance with the definitions and recognition criteria for assets, liabilities,
revenue, and expenses set out in IPSASs.
8
IPSAS 1 – Presentation of Financial Statements. This adoption is in accordance with COA Resolution 2017-006 dated
April 26, 2017, prescribing the adoption of Adoption of Additional Six (6) Philippine Public Sector Accounting
Standards (PPSASs) and Updates on the PPSAS prescribed through COA Resolution No. 2014-003 dated January 24,
2014, in accordance with the 2016 Edition of the Handbook of International Public Sector Accounting Pronouncements
(HIPSAP) published by the International Federation of Accountants (IFAC)
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