Held-to-maturity
Non-derivative financial assets with fixed or determinable payments and fixed
maturities are classified as held to maturity when the LGU has the positive
intention and ability to hold them to maturity. After initial measurement, held-to-
maturity investments are measured at amortized cost using the effective interest
method, less impairment. Amortized cost is calculated by taking into account any
discount or premium on acquisition and fees or costs that are an integral part of the
effective interest rate. The losses arising from impairment are recognized in surplus
or deficit.
Financial liabilities
Initial recognition and measurement
Financial liabilities within the scope of IPSAS 29 are classified as financial
liabilities at fair value through surplus or deficit or loans and borrowings, as
appropriate. The Province determines the classification of its financial liabilities at
initial recognition.
All financial liabilities are initially recognized at fair value, in the case of loans and
borrowings.
The Province’s financial liabilities include trade and other payables, loans, and
borrowings.
Subsequent measurement
The measurement of financial liabilities depends on their classification.
Financial liabilities at fair value through surplus or deficit
Financial liabilities at fair value through surplus or deficit include financial
liabilities held for trading and financial liabilities designated upon initial
recognition as at fair value through surplus or deficit.
Loans and borrowings
After initial recognition, interest bearing loans and borrowings are subsequently
measured at amortized cost using the effective interest method. Gains and losses
are recognized in surplus or deficit when the liabilities are derecognized as well as
through the effective interest method amortization process.
Amortized cost is calculated by taking into account any discount or premium on
acquisition and fees or costs that are an integral part of the effective interest rate.
Currently, the Province has an outstanding loan with the Development Bank of the
Philippines and Land Bank of the Philippines with the following details:
Name of Loan: Term Loan
Type of Loan: Note
Kind of Indebtedness: Domestic
Purpose of Loan: Completion of the construction of the Four-Storey Central Block Building
including mechanical equipment at the Negros Oriental Provincial Hospital.
Authority for Loan: SP Res # 21 dated 01/27/2014 Special Ordinance #46
Bank/Lending Institution: Development Bank of the Philippines
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