Note 8 – Prepayments and Deferred Charges
This account consists of the following:
2024 2023
Prepayments
Advances to Contractors ₱ 2,087,206.30 ₱ 6,107,942.39
Prepaid Registration 32,844.81 37,819.82
Prepaid Insurance 440,512.73 316,928.60
Deferred Charges
Discount on Advance Payment 1,046,400.08 1,170,837.68
Total ₱ 3,606,963.92 ₱ 7,633,528.49
The account Advances to Contractors represents advance payments made to
contractors, equivalent to 15% of the contract amount.
The balance of the Prepaid Insurance accounts represents the unexpired portion of the
insurance premiums for municipal buildings and vehicles.
Discount on Advance Payments refers to the discount given to taxpayers for paying
real property taxes in advance.
Note 9 – Investment Property
Investment Property – Land ₱ 310,200.00 ₱ 310,200.00
This refers to two lots owned by the Municipality located in Barangay Apolong,
Valencia, Negros Oriental, which were developed into a swimming pool as a tourist
attraction. On December 17, 2011, the swimming pool was destroyed by Typhoon Sendong.
Due to lack of funds to rehabilitate the area, the Municipality decided to enter into a lease
contract with Philsouth Properties and Development Corporation, which would undertake the
rehabilitation and development, including necessary financing and construction of the project
site at no cost on the part of the Municipality. The lessee shall be allowed to recover its
investment by operating in the leased premises during the lease period. The term of the lease
shall be a maximum of 25 years after the completion of the rehabilitation and development.
The base rent for the lease shall be at least ₱20,000.00 per month for the first five years and
an increment of 5% of the accumulated monthly rental beginning in the 6th year, and every
three years thereafter until the 25th year.
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