NOTES TO FINANCIAL STATEMENTS

As of December 31, 2022, 2021, 2020, 2019 and 2018

Note 1-CORPORATE INFORMATION

SleepBox is a hotel business registered in the Philippines. It is operated by SleepBox

Corporation, which is duly registered with the Securities and Exchange Corporation having a life
of fifty (50) years. SleepBox is intended primarily to accumulate profits by providing
accommodation services to transients doing business, leisure activities and other undertakings in
Davao City. Its operations centers on accepting guests, providing high-quality and competent
sleeping quarters and developing more innovative service practices. The firm’s principal office is
located at __________________.

Note 2-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of Preparation of Financial Statements

The accompanying financial statements are prepared in conformance with Philippine
Financial Reporting Standards (PFRS) for each type of asset, liability, shareholder’s equity,
revenues and expenses. The historical basis is used in preparing these statements. The
amounts are presented in Philippine peso, which is used as the functional currency.
2.2 Cash and Cash Equivalents

This line item includes Cash on Hand, Cash in Bank, Petty Cash and Payroll Fund.

a. Cash on Hand represents the collections awaiting deposit to the bank.

b. Cash in Bank refers to the money deposited in the bank under the name of the
corporation.
c. Petty Cash represents the money allocated for minor disbursements for the use in
its operations handled by the General Manager.
d. Payroll Fund represents the amount set aside for the payment of salaries.
2.3 Trade and Other Receivables
This line item only includes Subscriptions Receivable which are receivables coming from
share subscriptions collectible within one (1) year from the reporting date.
 2.4 Property, Plant and Equipment
These assets are carried at cost less accumulated depreciation with the exception of Land.
Depreciation is computed on a straight-line method over the estimated useful life of the
assets. (PAS 16)
2.5 Organization and Borrowing Costs
Organization costs are recognized prior to the start of the operations and borrowing costs
are computed from the time the loan is received which is 6 months prior to start of the
reporting year.
2.6 Revenue and Expense Recognition
Revenue is recognized upon the receipt of cash or on cash-basis. It only includes the gross
inflow of economic benefits received by the entity.
Expenses are recognized as incurred or treated as prepaid expense depending on the
materiality and usage of such.
2.7 Subsequent Events
Subsequent events, which have material adjusting effect on the firm’s financial statements,
will be reflected accordingly. Material non-adjusting subsequent events are disclosed in
the notes to financial statements.
NOTE 3- MANAGEMENT’S SIGNIFICANT ACCOUNTING JUDGMENTS AND
ESTIMATES
Judgments
The preparation of the Company’s financial statements in conformity to the Philippine
Financial Reporting Standards requires management to make estimates and assumptions used in
the Company’s financial statements are based upon management’s evaluation of relevant facts and
circumstances as of the date of the Company’s financial statements. Actual results could differ
from such estimates, judgments and estimates are continually evaluated and are based on historical
experience and other factors, including expectations of future events that are believed to be
reasonable under the circumstances.
Estimates
In the application of the Company’s accounting policies, management is required to make
judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are
not readily apparent from other sources. The estimates and associated assumptions are based on
historical experience and and other factors that are considered to be relevant. Actual results may
differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognized in the period in which the estimate is revised if the revision
affects only that period or in the period of the revision and future periods if the revision affects
both current and future periods.
The following represents a summary of the significant estimates and judgments used in the
Company’s financial statements:
a. Estimated Useful Lives and Depreciation of PPE
The Company estimates the useful lives of property, plant and equipment based on the
period over which the property and equipment are expected to be available for use. The estimated
useful lives of the property, plant and equipment are reviewed periodically and are updated if
expectations differ from previous estimates due to physical wear and tear, technical or commercial
obsolescence and legal or other limits on the use of property, plant and equipment. In addition, the
estimation of the useful lives of property, plant and equipment is based on industry practice and
internal assessment.
Depreciation is computed on the straight-line method, based on the estimated useful lives
of the assets as follows:
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