Interest income
Interest income represents the interest earned from the depository banks and is
presented net of taxes. Interest is earned on a quarterly basis.
3.4 Property, Plant and Equipment
All property, plant, and equipment 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 LGU
recognizes such parts as individual assets with specific useful lives and
depreciates 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 cost or valuation of the
asset less any estimated residual value over its remaining useful life.
3.5 Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and cash in bank, deposits
on call and highly liquid investments with an original maturity of three
months or less, which are readily convertible to known amounts of cash and
are subject to insignificant risk of changes in value. For the purpose of the
consolidated statement of cash flows, cash and cash equivalents consist of
cash and short-term deposits as defined above, net of outstanding bank
overdrafts.
3.6 Inventories
Inventory is measured at cost upon initial recognition. To the extent that
inventory was received through non-exchange transactions (for no cost or for
a nominal cost), the cost of the inventory is its fair value at the date of
acquisition.
Cost incurred in bringing each product to its present location and condition are
accounted for, as follows:
a) Raw materials: purchase cost using the weighted average cost method;
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