b) The nature of the asset, its susceptibility and adaptability to changes in
technology and processes;
c) The nature of the processes in which the asset is deployed; and
d) Changes in the market in relation to the asset.
Receivables
Receivables are amounts owed by consumers and are presented net of impairment
losses. The LGU has a credit risk policy in place, and the exposure to credit risk is
monitored on an ongoing basis. The LGU is compelled, by its constitutional
mandate, to provide all its residents with basic minimum services, without recourse
to an assessment of creditworthiness. There were no material changes in the
exposure to credit risk and its objectives, policies, and processes for managing and
measuring the risk during the year under review.
The LGU’s maximum exposure to credit risk is represented by the carrying value
of each financial asset in the statement of financial performance. The LGU has no
significant concentration of credit risk, with exposure spread over a large number
of consumers, and is not concentrated in any particular sector or geographic area.
The LGU establishes an allowance for impairment that represents its estimate of
anticipated losses in respect of receivables.
Capital management
The primary objective of managing the LGU’s capital is to ensure sufficient cash
available to support the LGU’s funding requirements, including capital
expenditure, so that the LGU remains financially sound. The LGU monitors capital
using a gearing ratio, which is net debt, divided by total capital, plus net debt. In a
capital-intensive industry, a gearing ratio of 54.5% or less can be considered
reasonable. Included in net debt are interest-bearing loans and borrowings,
payables, less investments.
Note 4: Cash and Cash Equivalents
2024 2023
Cash on Hand
Cash – Local Treasury ₱ 296,697.38 155,288.85
Cash in Bank – Local Currency
Cash in Bank – Local Currency, Current
102,444,584.75 99,374,457.93
Account
Total Cash and Cash Equivalents ₱ 102,741,282.13 99,529,746.78
Cash in banks earns interest based on the prevailing bank deposit rates. Short-term
deposits are made for varying periods, depending on the LGU’s immediate cash
requirements, and earn interest at the respective short-term deposit rate.
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