Note 3 - Summary of significant accounting policies
3.1 Basis of accounting
The combined financial statements are prepared on an accrual basis in accordance
with the IPSAS.
3.2 Combination/Consolidation
The consolidated financial statements reflect all the assets, liabilities, revenue, and
expenses of the municipality covering all funds. These funds include the General
Fund and the two Special Funds namely: Special Education Fund (SEF) and Trust
Fund (TF). The General Fund is composed of the following Special Accounts:
• General Fund-Proper
• Market Operation
• Slaughterhouse
• Waterworks
• Operation of Cemetery
• 20% Economic Development Fund
• LGSEF
3.3 Cash and Cash Equivalents
Cash and cash equivalents comprise cash on hand and cash at bank; deposits on call
and highly liquid investments with an original maturity of three months or less,
which are readily convertible to cash and they present insignificant risk of changes
in value because of changes in interest rates.
3.4 Presentation of Financial Statements
In accordance with the PPSAS transitional provisions, comparative financial
statements for CY 2022 and 2023 was not presented considering the effects of
significant changes in the accounting policies as a result of the first-time adoption
of the PPSAS.
3.5 Investments
The LGU limits its exposure to risk by investing in Authorized Depository Banks.
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