Inventories were recognized as expense when issued for utilization or
consumption in the ordinary course of operation.
3.8 Prepayments and Deferred Charges
Prepayments were recorded using the asset method. Adjusting entries were
prepared at the end of the year to record the portion of the prepayment
representing the expense incurred during the current accounting period.
3.9 Property, Plant and Equipment
Property, Plant and Equipment (PPE) were recognized at cost. The cost
includes the purchase price and expenditures directly attributable to the
acquisition of the asset. PPEs are classified as such in the books when the
acquisition costs are at least Fifty Thousand Pesos (₱50,000.00) per unit, in
accordance with COA Circular No. 2022-004 issued on May 31, 2022.
After recognition, PPE were stated at cost less accumulated depreciation.
The straight-line method was adopted in the computation of depreciation over
the useful life of the asset, assigning a residual value of at least 10%. The
estimated useful life of the asset is based on the estimated useful life of PPE by
classification issued by COA. Depreciation starts on the month following the
date of the purchase.
The City calculates depreciation of property, plant and equipment based on the
following estimated useful life (in years):
Property, Plant and Equipment Estimated useful life in years
Land Improvements
Land Improvements 10
Runways/taxiways 20
Railways 40
Electrification, Power and Energy Structures 10
Buildings- those that are predominantly -
Wood 10
Mixed 20
Concrete 30
Leasehold Improvements*
Land 10
Buildings
Wood 10
Mixed 20
Concrete 30
Office Equipment, Furniture and Fixtures
Office Equipment 5
Furniture and Fixtures 10
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