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GOVERNMENT ACCOUNTING

MANUAL
The issuance of the GAM is in line with
the provision under
Article 1X-D Section 2(2)
of the 1987 Philippine Constitution
mandating the Commission to
promulgate accounting rules and
regulations.
The GAM considered the
provisions of the particular
PPSASs as they apply to the
respective chapters of the
manual.

The GAM will supersede the New


Government Accounting System (NGAS)
Manual that we have been using since 2002
when the NGAS was adopted by the
Commission.
Government Accounting Manual (GAM)-
National in relation to:

*Adoption of policies and procedures in the


implementation of Philippine Public Sector
Accounting Standards (PPSAS)

*Harmonization of the Budget and Financial


Accountability Reports (BFARs)

*Revision of the Chart of Accounts


*Implementation of Unified Accounts
Code Structure

*Changes in accounting policies adopted


resulting from PPSAS implementation
Changes Adopted in the GAM
Particulars NGAS GAM
1. FS Title 1. Balance Sheet 1. Statement of Financial
2. Statement of Income Position
and Expenses 2. Statement of Financial
3. Statement of Performance
Government Equity 3. Statement of Changes in Net
4. Cash Flow Statement Assets/Equity
4. Statement of Cash Flow

2. Components of FS four Six

In addition to the above:


5. Statement of Comparison of
Budget and Actual Amounts
6. Notes to Financial
Statements

GAM: Executive Session 1: Introduction Slide 6 of 24


Appreciation
Changes Adopted in the GAM
Particulars NGAS GAM
3. Chart of Accounts COA Circular 2004-008 COA Circular 2013-002,
January 30, 2013
COA Circular 2014-003,
April 15, 2014

4.Unified Accounts Code None Compliant


Structure (UACS)

5. Books Maintained Regular Agency Book Fund Cluster


and National
Government Book

GAM: Executive Session 1: Introduction Slide 7 of 24


Appreciation
Changes Adopted in the GAM
Particulars NGAS GAM
6.Estimated Prescribed by Management prerogative
Useful Life COA

7. PPE Threshold None P15,000 and above

GAM: Executive Session 1: Introduction Slide 8 of 24


Appreciation
Changes Adopted in the GAM
Particulars NGAS GAM
8. Fund One Fund Fund Clustering
Maintenance Concept 01 - Regular Agency Fund
02 - Foreign-Assisted Projects
Fund
03 - Special Accounts-Locally
Funded/Domestic Grants Fund
04 - Special Account-Foreign
Assisted/Foreign Grants Fund
05 - Internally Generated
Funds/Retained Income Fund
06 - Business Related
Funds/Revolving Fund
07 - Trust Receipts

GAM: Executive Session 1: Introduction Slide 9 of 24


Appreciation
Changes Adopted in the GAM
Particulars NGAS GAM

9. Cash Flow Direct Method Direct Method

10. Impairment loss None Recognized

11. Adjustment Uses Prior Years Direct adjustment to Equity


affecting Government Adjustment account
Equity

GAM: Executive Session 1: Introduction Slide 10 of


Appreciation 24
Changes Adopted in the GAM
Particulars NGAS GAM
19. Residual value 10% At least 5%

GAM: Executive Session 1: Introduction Slide 11 of


Appreciation 24
OBJECTIVE OF THE MANUAL

The Manual aims to update the


following:
a. standards, policies, guidelines
and procedures in accounting for
government funds and property;
OBJECTIVE OF THE MANUAL

b. coding structure and accounts;

c. accounting books, registries,


records, forms, reports and
financial statements.
ESTIMATED USEFUL LIFE OF AN
ASSET
The estimation of the useful life of
the asset is a matter of judgment
based on the experience of the
entity with similar assets. The
agency/entity is in the best position
to estimate the expected useful life
of its PPE.
As a guideline, PPE shall be
depreciated over the following
life spans:
Land Improvements

Over the useful life of the asset to


which the improvement was made
or the useful life of the
improvement if significantly shorter
Infrastructure Assets

20 to 50 years
Buildings and Other Structures

30 to 50 years
Machinery and Equipment

5 to 15 years
Furniture, Fixtures and Books

2 to 15 years
Motor Vehicles

5 to 15 years
Other Property, Plant and
Equipment

2 to 15 years
Based on the above life spans,
the entity shall prepare the
specific estimated useful life for
each asset based on its
experience on the life of its PPE,
copy furnished the Resident
Auditor and the Government
Accountancy Sector of COA.
The estimated useful life of the
undepreciated portion of a PPE
shall be reviewed on a regular
basis and revised when the
appropriateness of a change can
be clearly demonstrated.
A residual value equivalent to at
least five percent (5%) of the cost
shall be adopted unless a more
appropriate percentage is
determined by the entity based
on its operation subject to the
approval of COA.
Criteria for Recognition of PPE

The cost of an item of PPE shall be


recognized as assets if, and only if:
1. It is probable that the future
economic benefits or service
potential associated with the item
will flow to the entity;
Criteria for Recognition of PPE

2. The cost or fair value of the item


can be measured reliably;

3. Beneficial ownership and control


clearly rest with the government;
Criteria for Recognition of PPE

4. The asset is used to achieve


government objectives; and

5. It meets the capitalization


threshold of P15,000.
Under this recognition principle,
an entity shall evaluate all its PPE
costs at the time they are
incurred. These costs include
cost incurred initially to acquire
or construct an item of PPE and
costs incurred subsequently to
add to, replace part of, or service
the PPE.
Applying the Capitalization
Threshold of P15,000.

The capitalization threshold of


P15,000 represents the minimum
cost of an individual asset
recognized as a PPE on the
Statement of Financial Position.
Applying the Capitalization
Threshold of P15,000.

Items with individual values below


the threshold but which work
together in the form of a group of
network asset whose total value
exceeds the threshold shall be
recognized as part of the primary
PPE. (Example: computer network)
Applying the Capitalization
Threshold of P15,000.
Expenditures incurred on purchasing,
developing, and operating hardware, like
web servers, staging servers, production
servers and internet connections of a
website is accounted for as PPE if the total
value of the primary asset (communications
networks) and these items is within the
threshold of P15,000 and above.
Applying the Capitalization
Threshold of P15,000.

This threshold shall be applied on an


individual asset or per item basis. Each
item within the bulk acquisition with
aggregate or total value of PPE, such as
library books, computer peripherals and
small items of equipment, will need to
meet the capitalization threshold to be
recognized as PPE.
Semi-expendable Property.

Tangible items below the


capitalization threshold of P15,000
shall be accounted as semi-
expendable property. The following
policies apply as follows:
recognized as PPE.
Semi-expendable Property.

a. Semi-expendable property which


were recognized as PPE shall be
reclassified to the affected
accounts.
b. These tangible items shall be
recognized as expenses upon issue
to the end-user.
Accountability over Semi-
expendable Property.

Inventory Custodian Slip (ICS) shall


be issued to end-user of Semi-
expendable Property to establish
accountability over them.
Accountability over Semi-
expendable Property.

Accountability shall be extinguished


upon return of the item to the
Property and Supply Division/Unit
or in case of loss, upon approval of
the relief from property
accountability.
Inventory Custodian Slip (ICS)
Accountability over PPE

Based on approved RIS, the Supply


and/or Property Custodian shall prepare
the Property Acknowledgement Receipt
(PAR) to support the issue of property to
end-user. The PAR shall be renewed at
least every three years or every time
there is a change in accountability or
custodianship of the property.
Property Acknowledgment Receipt
Responsibility Center Code
Structure
Each NGA shall be assigned a responsibility
center code defined as organization code in
the UACS Manual. For monitoring revenue
and expenses, additional three digit codes for
the agencys major offices/departments shall
be appended to the organization code. The
organization code and the agencys major
offices/departments code shall consist of 15
digits as follows:
Responsibility Center Code
Structure

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