ACCOUNTING FOR REVENUE AND OTHER RECEIPTS

Sec. 44 of Book VI of the 1987 Administrative Code provides for the accrual of revenue
collected by the National Government to the inappropriate surplus of the general fund such that
"unless otherwise specifically provided by law, all income accruing to the departments, offices
and agencies, by virtue of the provisions of existing laws, orders and regulations shall deposited
in the National Treasury or in the duly authorized depository bank of the government." PPSAS 9,
Revenue from Exchange Transactions, and PPSAS 23, Revenue from Non-exchange
Transactions -basis of accounting standards, policies, guidelines and procedures for revenue and
other receipts.

FUNDAMENTAL PRINCIPLES FOR REVENUE

REVENUE

 Is the gross inflow of economic benefits or service potential during the reporting period
when those inflows result in an increase in net assets/equity, other than increases relating
to contributions from owners.

REVENUE FUNDS

 Comprise all funds derived from the income of any agency of the government and
available for appropriation or expenditure in accordance with law.
 All revenues accruing to the National Government Agencies (NGAs) shall be governed
by the following fundamental principles:

A. Unless otherwise specifically provided by law, all revenues accruing to an entity by

virtue of the provisions of existing law, orders and regulations shall be
deposited/remitted in the National Treasury (NT) or in any duly authorized government
depository, and shall accrue to the General Fund (GF) of the National Government.

B. All moneys and property officially received by a public officer in any capacity or
upon occasion.

C Amount received in trust and from business-type activities of government may be

separately recorded and disbursed.

D. Receipts shall be recorded as revenue of Special, Fiduciary or Trust Funds oe Funds

other than GF.

E. No payment of any nature shall be received by a Collecting Officer (CO) w/o

immediately issuing an official receipt (OR)
 F. Mechanical devices are used to acknowledge cash receipts.

G. No instance shall temporary receipts be issued to acknowledge the receipt of public

funds.

H. ORs shall be issued in strict numerical sequence.

I.An officer charged to accept payment for taxes , dues or other indeptedness to the
government in the form of CHECKS.

J. COA Department of Finance (DOF) may prescribe , the Treasure of the Philippines
and all AGDB shall acknowledge receipt of all received by them.

ACCOUNTING STANDARD FOR REVENUE

 According to PPSAS 9 and PPSAS 23, the ff. accounting standards shall apply for
revenue and receipts of government entities :

a. Revenue includes only the gross inflow of economic benefits or service potential received and
receivable by the entity in its own account.

b. Receipts/Cash shall refer to all cash

c. Fines

d Gifts and Donation

e. Goods in-kind

f. Taxes

g. Transfers

ACCRUAL OF REVENUE TO THE GENERAL FUND

SPECIAL, FIDUCIARY AND TRUST FUNDS

SOURCES OF REVENUE AND OTHER RECEIPTS

EXCHANGE TRANSACTIONS

 Are transactions in which one entity receives assets or services, or has liabilities
extinguished
RECOGNITION AND MEASUREMENT OF REVENUE FROM EXCHANGE
TRANSACTIONS

RECOGNITION OF REVENUE-EXCHANGE TRANSACTIONS

1. Sale of Goods

2. Supply of Services

3. Use by Others of Entity

•Interest

•Royalties

• Dividends or similar distributions

MEASUREMENT OF REVENUE- EXCHANGE TRANSACTIONS

 Revenue from exchange transactions shall be measured bat fair value

EXCHANGE OF GOODS OR SERVICES FOR SIMILAR/DISSIMILAR GOODS OR

SERVICES

IMPAIRMENT LOSSES AND ALLOWANCES FOR IMPAIRMENT LOSS

1. Disclosure An entity shall disclose:

A. The accounting policies for recognition of revenue, including the methods adopted to
determine then stage of completion of transactions involving rendering of services.

B. Revenue recognizes during the period, including revenue arising from:

1. Rendering Services

2. Sale of Goods

3. Interest

4. Royalties

5. Dividends or similar distributors

6. Amount of revenue arising from exchanges of goods or services included in each

significant category of revenue.
NON - EXCHANGE TRANSACTIONS

 Are transactions in w/c an entity either receives value from another entity w/o directly
giving approximately equal value in exchange, or gives value to another entity w/o
directly receiving approximately equal value in exchange.

RECOGNITION AND MEASUREMENT OF REVENUE FROM NON-EXCHANGE

TRANSACTIONS

 According from PPSAS 23 Revenue of the NGAs from non-exchange transactions are :
Taxes Gifts, Donation and Goods in-kind Service in-kind Fines

RECOGNITION OF REVENUE FROM NON-EXCHANGE TRANSACTION

 Asset and the corresponding revenue or liability that arises from non-exchange
transaction shall be recognized when collected or when these are measurable and legally
collectible.

MEASUREMENT OF REVENUE FROM NON-EXCHANGE TRANSACTION

 An entity will recognized an asset arising from non-exchange transaction when it gains
controls of that resources and satisfy the recognition criteria.

MEASUREMENT OF ASSETS AND LIABILITY ON INITIAL RECOGNITION

 Assets acquired through a non-exchange transaction shall initially be measured at its fair
value as at the date of acquisition
 As to liability, the amount of which on initial recognition shall be the best estimate of the
amount required to settle the present obligation at the reporting date.

TAX REVENUE

 Taxes do not include Fines or other penalties imposed for breaches of the law unless
otherwise specified in laws and regulation, the taxable event for:
A. income tax
B. Value added tax
C. Goods and services tax
D. Customs duty
E. Death duty
F. Property tax
TRANSFER OF INTERNATIONAL REVENUE ALLOTMENT EXPENSES PAID
THROUGH THE TAX SYSTEM AND TAX EXPENDITURES

 Expenses paid through the tax system are those Expenses which should be paid
irrespective of whether the taxpayer pays taxes.

TAXATION REVENUE SHALL NOT BE GROSSED UP FOR THE AMOUNT OF TAX

EXPENDITURES

 Tax expenditures are foregone revenue, not Expenses and do not give rise ti inflow or
outflow of resources that is they do not give rise to assets, liability, revenue or Expenses
of the government.

RECOGNITION OF ASSET THROUGH TRANSFERS

 An entity shall recognize an asset in respect of transfer when the transferred resources
meet the definition of an asset and satisfy the criteria for recognition as an asset.

RECOGNITION AND MEASUREMENT -DEBT FORGIVENESS AND ASSUMPTION

OF LIABILITIES

 Revenue arising from debt forgiveness is measured at its the carrying amount of the debt
forgiven.

RECOGNITION AND MEASUREMENT OF FINES

 Fines are economic benefits or services potential received or receivable by a public

sector entity.

RECOGNITION AND MEASUREMENT OF BEQUESTS

 A bequest is a transfer made according to the provisions of a deceased persons will

-Bequest are measured at the fair value of the resources received or receivable

RECOGNITION AND MEASUREMENT OF GIFT, DONATION AND GOOD IN-KIND

 Gifts and donation are voluntary transfer of assets including cash or other monetary
assets, Good in-kind and service in-kind that one entity makes to another, normally free
from stipulation

RECOGNITION AND MEASUREMENT OF SERVICE IN-KIND

 It is service provided by individual to public sector entities in a non-exchange transaction

 These service meet the definition of an asset because the entity controls a resources from
which future economic benefits
RECOGNITION AND DISCLOSURE OF PLEDGE

 Pledge are unenforceable undertaking to transfer assets to the recipient entity -Pledge do
not meet the definition of an asset

ADVANCE RECEIPT OF REVENUE RECOGNITION AND MEASUREMENT OF

CONCESSIONARY LOANS

 Concessionary loans are loans received by an entity at below market terms

GRANTS WITH CONDITIONS

 If conditions are attached to a grant, a liability is recognized

DISHONORED CHECK

 a dishonored check be settled by tendering payment in cash or by certified check to the

collecting officer concerned.
