PAG 6 A residual value equivalent to at least five percent (5%) of the cost
shall be adopted unless a more appropriate percentage is determined
by the agency based on their operation.”
2.3. The audit of depreciable PPE accounts with a total recorded cost of ₱338,950,421.93
and a total accumulated depreciation of ₱43,885,945.58 as of December 31, 2024,
showed that the reported net book value of the PPE account of ₱295,064,476.35 for
the same period could not be relied upon due to the following:
2.3.1. Discrepancy between the PPE Lapsing Schedule and the Financial Statements
amounting to ₱170,982,037.93
2.3.1.1. The PPE Lapsing Schedule as of December 31, 2024, submitted by
the Municipal Accountant, did not reconcile with the corresponding
balances reported in the financial statements. A variance amounting
to ₱170,982,037.93 was noted, as summarized below:
Net Book Value
Depreciable
Per Lapsing Difference
PPE Per FS
Schedule
Land ₱ 4,602,846.15 ₱ 701,467.21 ₱ 3,901,378.94
Improvements
Infrastructure 136,710,759.52 80,022,036.51 56,688,723.01
Assets
Buildings and 119,084,179.56 27,479,569.21 91,604,610.35
Other Structures
Machinery and 7,461,165.02 1,281,141.87 6,180,023.15
Equipment
Transportation 21,220,012.08 14,475,463.09 6,744,548.99
Equipment
Furniture, 4,614,721.90 121,593.44 4,493,128.46
Fixtures, and
Books
Other Property, 1,370,792.12 1,167.09 1,369,625.03
Plant, &
Equipment
Total ₱295,064,476.35 ₱124,082,438.42 ₱170,982,037.93
See Appendix 1 for details.
2.3.1.2. Despite being aware of the discrepancy, the Municipal Accountant
continued to use the same items from the Lapsing Schedule in
computing the depreciation for CY 2024. As a result, only the
depreciation expense is consistent between the Lapsing Schedule
and the financial statements.
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