biological asset for which 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.
(a) Incomplete and unreconciled inventory of biological assets against
accounting records
8.2.1 Section 4.5 of COA Circular No. 2016-004 dated September 30, 2016,
requires that the Local Agriculturist provide the Local Accountant with
the (1) inventory reprort of breeding stocks and other biological assets,
and the prevailing market price for each item as of reporting date, and, (2)
information on the prevailing cost to sell of these assets. This is to ensure
that biological asset accounts in the financial statements are fairly
presented in accordance with IPSAS.
8.2.2 Breeding stocks and work animals (such as cattle, carabaos, horses, etc.)
used in government programs are classified as biological assets and
recorded under the appropriate biological asset accounts.
8.2.3 Upon verification of the financial statements as of December 31, 2024, we
found that the Breeding Stocks (1-08-01-010) under the Biological Assets
accounts had a balance of ₱1,123,860.00.
8.2.4 On January 7, 2025, the CGSO submitted the Report on Physical Count of
Property, Plant and Equipment (RPCPPE) as of December 31, 2024, which
included breeding stocks consisting of carabaos, cattle, goat, swine, small
ruminants, rabbit and poultry amounting to ₱541,579.00. This resulted in
a discrepancy of ₱582,281.00 when compared to the accounting records.
8.2.5 An interview with the Inventory Committee revealed that an inventory
count of the Breeding Stocks was conducted in CY 2024. However, the
inventory was incomplete because the animals had been distributed among
various recipients from farmer associations across different barangays.
8.2.6 Consequently, the corresponding RPCPPE was not fully prepared,
underscoring the challenges and limitations encountered by the
Committee in conducting a comprehensive inventory.
(b) Dormant accounts totaling ₱563,900.73 exceeding 10 years
8.2.7 Our review of the subsidiary ledger indicates that the Breeding Stocks
account includes items totaling ₱563,900.73 without specific details.
These items have been dormant, showing no activity since CY 2010,
which means they have not had any recorded transactions over 10 years.
8.2.8 Considering the significant length of time and the nature of these accounts,
it is likely that the breeding stocks may have produced offspring, or that
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