3.10 Budget information
The annual budget is prepared on a modified cash basis, that is, all planned costs
and income are presented in a single statement to determine the needs of the
Province. As a result of the adoption of the modified cash basis for budgeting
purposes, there are basis, timing, or entity differences that would require
reconciliation between the actual comparable amounts and the amounts presented
as a separate additional financial statement in the statement of comparison of
budget and actual amounts. Explanatory comments are provided in the notes to the
annual financial statements; first, the reasons for overall growth or decline in the
budget are stated, followed by details of overspending or underspending on line
items.
3.11 Significant judgments and sources of estimation uncertainty
Judgments
In the process of applying the LGU accounting policies, management has made
judgments that have the most significant effect on the amounts recognized in the
consolidated financial statements.
Useful lives and residual values
The useful lives and residual values of assets are assessed using the table provided
by the COA.
3.12 Financial instruments - financial risk management
Exposure to currency, commodity, interest rate, liquidity, and credit risks arises in
the normal course of the LGUs operations. This note presents information about its
exposure to each of the mentioned risks, its policies and processes for measuring
and managing risk, and the LGU’s management of capital. Further quantitative
disclosures are included throughout these financial statements. The fair values set
out below are a comparison by class of the carrying amounts and fair value of the
LGU’s financial instruments.
The fair value of the financial assets and liabilities is included at the amount at
which the instrument could be exchanged in a current transaction between willing
parties, other than in a forced sale or liquidation.
As of December 31, 2024, the Province of Negros Oriental held the following
financial instruments measured at fair value:
2024 Level 1 Level2 Level3
Investments ₱98,281,227.15 ₱98,281,227.15 0.00 0.00
₱98,281,227.15 ₱98,281,227.15 0.00 0.00
During the reporting period ending December 31, 2024, there were no transfers
between levels 1 and 2 of fair value measurements.
Credit risk
Credit risk is the risk of financial loss to the Province if customers or counterparties
to financial instruments fail to meet their contractual obligations, and it arises
principally from its investments, loans, receivables, and cash and cash equivalents.
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