corresponding accumulated depreciation and accumulated impairment losses
shall be closed in the books of accounts;
� Tangible items below ₱50,000.00 acquired and issued prior to CY 2024 and
have been classified as PPE, the carrying amount shall be expensed/charged to
Prior Period Adjustment and the corresponding accumulated depreciation and
accumulated impairment losses shall be closed in the books of accounts.
1.5. We would like to draw Management’s attention to Annex B of the Circular, which
outlines the new accounts that will be utilized. Additionally, Annex C presents
illustrative accounting entries for various cases.
1.6. Our review of the Municipality’s financial records disclosed that semi-expendable
properties with individual acquisition costs below ₱50,000.00, with their carrying
amounts totaling ₱3,199,594.81 as of December 31, 2024, remain recorded under
various PPE accounts, as follows:
Agricultural and Forestry Equipment ₱ 5,150.00
Books 257.50
Communication Equipment 198,530.01
Construction and Heavy Equipment 11,030.80
Disaster Response and Rescue Equipment 15,424.00
Furniture and Fixtures 568,185.43
Information and Communication Technology Equipment 734,061.89
Marine and Fishery Equipment 12,272.58
Medical Equipment 1,579.93
Military, Police and Security Equipment 2,238.79
Motor Vehicles 97,213.53
Office Equipment 652,708.19
Other Machinery and Equipment 191,029.28
Other Property, Plant and Equipment 709,912.89
Total ₱3,199,594.81
1.7. The above properties remain in PPE despite the issuance of COA Circular
No. 2024-006, which states that these items should have been appropriately
reclassified to the accounts listed in the Revised Chart of Accounts in COA Circular
2024-006, and that the corresponding prior period adjustments should have been
made.
1.8. It is also emphasized that the existing Acknowledgment Receipts for Equipment
(ARE) will be replaced by Inventory Custodian Slips (ICS) for tangible items
valued below ₱50,000.00, acquired and issued prior to CY 2024, and classified as
PPE (Sec. 3.7, COA Circular No. 2024-006). However, an inquiry with the
Municipal Accountant revealed that they have yet to reclassify the items in PPE,
thus, they did not issue ICS for the items from prior years.
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