Interest income
Interest income is recorded based on the actual interest net of withholding tax as indicated
in the bank statements.
Rental income
Rental income is income generated by Lalimar Resort, which is under an operating lease
from private individuals.
3.3 Investment Property
Investment properties are measured initially at cost, including transaction costs. The
carrying amount includes the replacement cost of components of an existing investment
property at the time that cost is incurred if the recognition criteria are met and excludes
the costs of day-to-day maintenance of an investment property.
Investment property acquired through a non-exchange transaction is measured at its fair
value at the date of acquisition. Subsequent to initial recognition, investment properties
are measured using the cost model and are depreciated over a 30-year period.
Investment properties are derecognized either when they have been disposed of or when
the investment property is permanently withdrawn from use and no future economic
benefit or service potential is expected from its disposal. The difference between the net
disposal proceeds and the carrying amount of the asset is recognized in the surplus or
deficit in the period of derecognition. Transfers are made to or from investment property
only when there is a change in use.
3.4 Property, plant, and equipment
All PPE are stated at cost less accumulated depreciation and impairment losses. Cost
includes expenditure that is directly attributable to the acquisition of the items. When
significant parts of property, plant, and equipment are required to be replaced at intervals,
the LGUs recognize such parts as individual assets with specific useful lives and
depreciate them accordingly. Likewise, when a major inspection is performed, its cost is
recognized in the carrying amount of the plant and equipment as a replacement if the
recognition criteria are satisfied. All other repair and maintenance costs are recognized
in surplus or deficit as incurred. Where an asset is acquired in a non-exchange transaction
for nil or nominal consideration, the asset is initially measured at its fair value.
Depreciation on assets is charged on a straight-line basis over the useful life of the asset.
Depreciation is charged at rates calculated to allocate the cost or valuation of the asset
less any estimated residual value over its remaining useful life.
Leased assets may consist of vehicles and machinery. The assets’ residual values and
useful lives are reviewed and adjusted prospectively, if appropriate, at the end of each
reporting period. An asset’s carrying amount is written down immediately to its
recoverable amount, or recoverable service amount, if the asset’s carrying amount is
greater than its estimated recoverable amount or recoverable service amount. The
Municipality derecognizes PPE items and/or any significant part of an asset upon
disposal or when no future economic benefits or service potential is expected from its
continuing use. Any gain or loss arising from the asset’s derecognition (calculated as the
difference between the net disposal proceeds and the carrying amount of the asset) is
included in the surplus or deficit when the asset is derecognized.
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