GOV ACC

• Government accounting


  Encompasses the processes of analyzing, recording, classifying, summarizing and communicating all transactions involving the receipt and disposition of government funds and property, and interpreting the results thereof
• Government accounting


  • Places greater emphasis on the sources and utilization of government funds
  • Places greater emphasis on responsibility, accountability and liability of entities entrusted with government funds and properties
• Government resources must be utilized efficiently and effectively in accordance with the law
• The head of a government agency is directly responsible in implementing this policy
• All other personnel entrusted with the custody of government resources are responsible to the head of the government agency, are accountable for the safeguarding thereof, and are liable for any losses
• Offices charged with government accounting responsibility

  • Commission on Audit (COA)
  • Department of Budget and Management (DBM)
  • Bureau of Treasury (BTr)
  • Government agencies
• Commission on Audit (COA)


  • Promulgate accounting and auditing rules
  • Keep the general accounts
  • Submit financial reports
• Department of Budget and Management (DBM)


  • Implementation of the national budget
• Bureau of Treasury (BTr)


  • Cash custody and control of disbursements
• Government agencies


  • Maintain accounting books and budget registries which are reconciled with the cash records of the BTr and the budget records of the COA and DBM
• GAM for NGAs


  The Government Accounting Manual for National Government Agencies promulgated by the COA to harmonize the government accounting standards with the International Public Sector Accounting Standards (IPSAS)
• Basic Accounting and Budget reporting Principles

  • Compliance with PPSAS and relevant laws, rules and regulations
  • Accrual basis of accounting
  • Budget basis for presentation of budget information in the financial statements
  • Revised Chart of Accounts
  • Double entry bookkeeping
  • Financial statements based on accounting and budgetary records
  • Fund cluster accounting
• Fund clusters


  • General Fund
  • Special Funds
  • Trust Funds
  • Revolving Funds

  
• Qualitative Characteristics


  • Understandability
  • Relevance
  • Materiality
  • Timeliness
  • Reliability
  • Faithful representation
  • Substance over form
  • Neutrality
  • Prudence
  • Completeness
  • Comparability
• Components of General Purpose Financial Statements

  • Statement of Financial Position
  • Statement of Financial Performance
  • Statement of Changes in Net Assets/Equity
  • Statement of Cash Flows
  • Statement of Comparison of Budget and Actual Amounts
  • Notes to the Financial Statements
• Recognition of an Asset

  • It meets the definition of an asset
  • Probable inflow of future economic benefits
  • Reliable measurement of cost or other value (e.g., fair value)
• The national budget (government budget) is the government's estimate of the sources and uses of government funds within a fiscal year
• The Budget Cycle


  • Budget Preparation
  • Budget Legislation
  • Budget Execution
  • Budget Accountability
• Budget Preparation


  • Budget Call
  • Budget Hearings
  • Presentation to the Office of the President
• Budget Legislation


  • House Deliberations
  • Senate Deliberations
  • Bicameral Deliberations
  • President's Enactment
• The Approved Budget


  • New General Appropriations
  • Continuing Appropriations
  • Supplemental Appropriations
  • Automatic Appropriations
  • Unprogrammed Funds
  • Retained Income/Funds
  • Revolving Funds
  • Trust Receipts
• Appropriation


  Authorization made by a legislative body to allocate funds for purposes specified by the legislative or similar authority
• Types of Appropriation


  • New General Appropriations
  • Continuing Appropriations
  • Supplemental Appropriations
  • Automatic Appropriations
  • Unprogrammed Funds
  • Retained Income/Funds
  • Revolving Funds
  • Trust Receipts
• Budget Execution


  • Release Guidelines and BEDs
  • Allotment
  • Incurrence of Obligations
  • Disbursement Authority
• Allotment


  Authorization issued by the DBM to government agencies to incur obligations for specified amounts contained in a legislative appropriation in the form of budget release documents
• Disbursement Authority


  • Notice of Cash Allocation (NCA)
  • Notice of Transfer of Allocation
  • Non-Cash Availment Authority
  • Cash Disbursement Ceiling
• Budget Accountability


  • Budget Accountability Reports
  • Performance Reviews
  • Audit
• Responsibility accounting


  A system of providing cost and revenue information over which a manager has direct control
• Books of Accounts and Registries

  • Journals
  • Ledgers
  • Registries
• Object of Expenditures


  • Personnel Services (PS)
  • Maintenance and Other Operating Expenses (MOOE)
  • Financial Expenses (FE)
  • Capital Outlays (CO)
• All revenues shall be remitted to the BTr and included in the General Fund, unless another law specifically allows otherwise
• Receipts shall be properly acknowledged through pre-numbered ORs. Receipts can be in the form of checks
• Sources of Revenue


  • Exchange transactions (e.g. sale of goods, rendering of services)
  • Non-exchange transactions (e.g. tax revenue, fines and penalties, donations)
• Revenue from sale of goods

  Recognized when: significant risks and rewards of ownership transferred, entity does not retain control, economic benefits will flow, revenue can be measured reliably, costs can be measured reliably
• Revenue from rendering of services

  Recognized on a straight line basis over the contract term, or by reference to stage of completion if outcome can be estimated reliably
• When the outcome cannot be estimated reliably, revenue is recognized only to the extent of recoverable costs
• Revenue recognition


  Criteria for recognizing revenue from exchange transactions:

  a. The entity has transferred to the buyer the significant risks and rewards of ownership of the goods;

  b. The entity does not retain continuing managerial involvement or effective control over the goods sold;

  c. It is probable that economic benefits will flow to the entity;

  d. Revenue can be measured reliably; and

  e. Costs relating to the transaction can be measured reliably.
• Rendering of services


  Revenue from rendering of services is recognized:

  a. On a straight line basis over the contact term; or

  b. By reference to the stage of completion if the outcome of the transaction can be estimated reliably, such as when all of the following conditions are satisfied:

  i. The stage of completion can be measured reliably;

  ii. It is probable that economic benefits will flow to the entity;

  iii. Revenue can be measured reliably; and

  iv. Costs relating to the transaction can be measured reliably.

  c. When the outcome cannot be estimated reliably, revenue is recognized only to the extent of recoverable costs.
• Interest, royalties and dividends


  • Interest is recognized on a time proportion basis that takes into account the effective yield on the asset;
  • Royalties is recognized as they are earned in accordance with the substance of the relevant agreement; and
  • Dividends are recognized when the entity's right to receive payment is established.
• Measurement of revenue from exchange transactions


  • Revenue from exchange transactions are measured at the fair value of the consideration received or receivable.
  • Any trade discounts and volume rebates shall be taken into account.
  • When cash flows are deferred, the fair value of the consideration is the present value of the consideration receivable.