been incurred. Capitalization ceases when construction of the asset is complete.
Further, borrowing costs are charged to the statement of financial performance.
3.9 Related parties
The LGU regards a related party as a person or an entity with the ability to exert
control individually or jointly, or exercise significant influence over the LGU,
or vice versa. Members of key management are regarded as related parties and
comprise the Governor, Mayors, Vice-Governors and Vice-Mayors, Sanggunian
Members, Committee Officials and Members, Accountants, Treasurers, Budget
Officers, General Services and all Chiefs of Departments/Divisions.
3.10 Budget information
The annual budget is prepared on the modified cash basis, that is, all planned
costs and income are presented in a single statement to determine the needs of
the LGU. As a result of the adoption of the Modified cash basis for budgeting
purposes, there are basis, timing or entity differences that would require
reconciliation between the actual comparable amounts and the amounts
presented as a separate additional financial statement in the statement of
comparison of budget and actual amounts. Explanatory comments are provided
in the notes to the annual financial statements; first, the reasons for overall
growth or decline in the budget are stated, followed by details of overspending
or under spending on line items.
3.11 Significant judgments and sources of estimation uncertainty
In the process of applying the LGU’s accounting policies, management has
made judgments, which have the most significant effect on the amounts
recognized in the consolidated financial statements.
4. Cash and Cash Equivalents
This account consists of the following:
Cash on Hand 2024 2023
Cash – Local Treasury ₱ 6,492,382.56 ₱ 1,864,789.34
Cash in Bank – Local Currency
Cash in Bank – Local Currency,
298,747,966.02 312,608,534.54
Current Account
Total Cash and Cash Equivalents ₱ 305,240,348.58 ₱ 314,473,323.88
Cash in banks earns interest based on the prevailing bank deposit rates. Short-term deposits
are made for varying periods, depending on the immediate cash requirements of the LGU
and earn interest at the respective short-term deposit rate.
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