Note 2. Basis of Financial Statement Preparation
The financial statements are prepared in accordance with and in compliance with, the
International Public Sector Accounting Standards (IPSASs), pursuant to COA Circular No.
2015-002 dated March 9, 2015. The financial statements are presented in Philippine pesos,
which is the functional and reporting currency of the Municipality. The accounting policies
have been applied beginning in 2015.
Note 3. Summary of Significant Accounting Policies
a. Basis of Accounting
The financial statements are prepared on an accrual basis in accordance with the
IPSAS.
b. Consolidation
The LGU maintains a special account within the General Fund for the economic
enterprise it operates, which includes the Market Administration, Waterworks
System, and Cemetery.
c. Revenue recognition
Revenue from non-exchange transactions
Taxes, fees, and fines
The LGU recognizes revenues from taxes and fines when the event occurs and the
asset recognition criteria are met. To the extent that there is a related condition
attached that would give rise to a liability to repay the amount, liability is recognized
instead of revenue. Other non-exchange revenues are recognized when it is probable
that the future economic benefit or service potential associated with the asset will flow
to the entity and the fair value of the asset can be measured reliably.
Transfers from other government entities
Revenues from non-exchange transactions with other government entities are
measured at fair value and recognized on obtaining control of the asset (cash, goods,
services and property) if the transfer is free from conditions and it is probable that the
economic benefits or service potential related to the asset will flow to the LGU and
can be measured reliably.
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