Notes to the Financial Statements

1. General Information

The financial statements of Barangay Pangamihan was issued on January 27, 2020. Barangay
Pangamihan is located in the northern part of Toledo City and the barangay hall is located in
Pangamihan, Toledo City. The barangay exercises the functions and responsibilities necessary
for the efficient and effective provision of the following basic services; agricultural support
services; health and social welfare services; services and facilities related to general hygiene and
sanitation, beautification, and solid waste collection; maintenance of katarungan pambarangay;
maintenance of barangay roads and bridges and water supply systems; infrastructure facilities;
information and reading center; and satellite or public market.

2.1 Statement of compliance and basis of preparation

The financial statements have been prepared in accordance with and comply with Philippine
Public Sector Accounting Standards. The financial statements are presented in Pesos and the
figures are rounded to the nearest pesos.

The financial statements are prepared on the basis of historical cost. The cash flow statement is
prepared using the direct method. The Statement of Comparison of Budget and Actual Amounts
is presented according to the classification adopted for budgeting purposes.

2.2 Summary of Significant Accounting Policies

a. Revenue Recognition

Revenues are recorded when received.

Revenue from non-exchange transactions

Taxes, grants and donations are recognized when taxable/event occurs. Transfer of funds from
other government agencies without specific purpose for which the fund will be utilized are
recognized as non-exchange transactions.

Revenue from exchange transactions

Revenue from fees on issuance of certifications and clearances and other services rendered, sale
of goods are recognized as exchange transactions.

b. Expenses

Expenses are recognized and taken up in the accounts when incurred.

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c. Inventories

Inventories are initially recognized at cost. The cost comprise all costs of purchase, costs of
conversion and other costs incurred in bringing the inventories to their present location and
condition. The cost of inventories are assigned following the moving average method and
measured at the lower of cost and net realizable value as at every reporting date. Inventories
acquired thru non-exchange transactions are recognized at its fair value at the time of transfer.

d. Recognition of Liabilities

Liabilities are recognized at the time goods and services are accepted or rendered.

e. Property, Plant and Equipment

Property, plant and equipment are carried at cost less accumulated depreciation. Major repairs,
which extends the life of the asset are capitalized and depreciated together with the asset.

Depreciation is charged on the depreciable value of assets following the straight-line method
over the useful life of the asset.

PPEs are derecognized upon disposal. Any gain or loss arising from the derecognition in the
surplus or deficit.

f. Public infrastructure

Public infrastructure assets are recorded in the books at cost. Replacement of parts required at
regular intervals is recognized in the carrying amount of the Public Infrastructure when the costs
incurred meet the recognition criteria. The carrying amount of those parts replaced is
derecognized.

3. Tax Revenue

  2019 2018
Tax Revenue-Property 599,645.43 577,041.69
Tax Revenue-Permit Fees 1,000.00 1,000.00
Total 600,645.43 578,041.69

Tax Revenue - Property represents the 30% share of the barangay from the City’s collection of
the basic real property tax and its penalties.

Tax Revenue - Goods and Services represents the taxes levied by the barangay on shores or
retailers with fixed establishments and the share of the barangay from taxes imposed on quarry
resources extracted within the barangay area.

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4. Share from Internal Revenue Collections

This represents the share of the barangay from the 40% allocation for the local governments
from the national internal revenue taxes.

5. Service and Business Income

  2019 2018
Service Income 12,420.00 12,815.00
Business Income 3,655.88 2,718.50
Total 16,075.88 15,533.50

6. Personal Services

a. This includes the cost of personnel services for employees of the barangay

  2019 2018
Salaries and Wages 958,600.00 922,350.00
Other Compensation 355,250.00 210,700.00
Other Personnel Benefits 77,730.00 74,148.00
Total 1,391,580.00 1,207,198.00

b. Remuneration of key management personnel

This represents the honoraria, year-end bonus, cash gift, other bonuses and allowances
and terminal leave benefits of the agency's key management personnel.

  2019 2018
Punong Barangay 121,573.00 111,530.00
Barangay Kagawads 684,411.00 611,903.60
SK Representative 90,000.00 19,000.00
Barangay Treasurer 97,773.00 87,414.00
Barangay Secretary 97,773.00 87,414.00
Total 1,091,530.00 917,261.60

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7. Maintenance and Other Operating Expenses

  2019 2018
Traveling Expenses 502,518.24 388,265.00
Training and Scholarship Expenses 463,800.00 836,800.00
Supplies and Materials Expenses 18,971.00 8,326.00
Utility Expenses - 16,349.62
Professional Services - 3,270.00
Repairs and Maintenance 126,944.00 72,446.00
Taxes, Insurance Premiums and Other Fees 3,651.00 3,553.50
Other Maintenance and Operating Expenses 228,995.00 157,310.00
Total 1,344,879.24 1,486,320.12

8. Non-Cash Expenses

  2019 2018
Depreciation 68,636.93 71,230.41
Total 68,636.93 71,230.41

9. Transfers, Assistance and Subsidy From

  2019 2018
Subsidy from other Local Government Units 100,000.00 13,200.00
Total 100,000.00 13,200.00

10. Cash and Cash Equivalents

Cash and cash equivalents comprise cash in the local treasury, petty cash, cash in bank-local
currency account and investment in time deposits with term of 3 months or less.

  2019 2018
Cash in Bank- LCCA 4,087,463.25 3,398,173.29
Total 4,087,463.25 3,398,173.29

11. Receivables

  2019 2018
Other Receivables 135.19 135.19
Total 135.19 135.19

12. Property, Plant and Equipment

See attached sheet

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13. Inter-Agency Payables

  2019 2018
Due to BIR 855.32 1,989.43
Due to NGAs 150,000.00 150,000.00
Due to LGUs - 199,268.72
Total 150,855.32 351,258.15

14. Other Payables

  2019 2018
Other Payables 0.04 0.04
Total 0.04 0.04

15. Reconciliation of Net Cash flows from Operating Activities to Surplus (Deficit)

  2019 2018
Surplus/Deficit 617,522.14 269,878.66
Non-Cash Transactions
Depreciation 68,636.93 71,230.41
Increase (Decrease) in Payables 3,130.89 18,283.00
(Increase) Decrease in receivables - 34,769.98
Net Cash From Operating Activities 689,289.96 394,162.05

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