Annex C-IPSAS Checklists

GUIDE CHECKLIST
OUTLINE Tab Code
Introduction Intro
IPSAS/PPSAS
1 IPSAS/PPSAS 1 - Presentation of Financial Statements 1-FS
2 IPSAS/PPSAS 2 - Cash Flow Statements 2-CFS
3 IPSAS/PPSAS 3 - Accounting Policies, Changes in Accounting 3-AccP
Estimates and Errors
4 IPSAS/PPSAS 9 - Revenue from Exchange Transactions 9-RevX
5 IPSAS/PPSAS 12 - Inventories 12-Inv
6 IPSAS/PPSAS 13 - Leases 13-Leases
7 IPSAS/PPSAS 14 - Events after the Reporting Date 14-Events
8 IPSAS/PPSAS 16 - Investment Property 16-IP
9 IPSAS/PPSAS 17 - Property, Plant and Equipment 17-PPE
10 IPSAS/PPSAS 21 - Impairment of Non-Cash Generating Assets 21-ImpNC
11 IPSAS/PPSAS 23 - Revenue from Non- Exchange Transactions
(Taxes and Transfers) 23-RevNonX
12 IPSAS/PPSAS 24 - Presentation of Budget Information 24-Budget
in Financial Statements
13 IPSAS/PPSAS 26 - Impairment of Cash Generating Assets 26-ImpC
14 IPSAS/PPSAS 27 - Agriculture 27-Agr
INTRODUCTION
Objective
1 This checklist aims to guide COA Auditors of NGAs in the evaluation of the
compliance of accounts and the financial statements with the requirements of
IPSAS-PPSAS, to support the independent auditor’s opinion.
Scope
2 It covers transactions of NGAs that prepare financial statements using the
prescribed basis of accounting as compliance to IPSAS/PPSAS.
Philippine government accounting is generally on accrual basis of accounting

except for transactions accounted for differently as required by law.
3 Since this checklist has been prepared for transactions starting January 2014 and
reflects the requirements of IPSAS 2012 version, it will be an excellent help in
first-time audit of IPSAS-PPSAS compliance. It will also serve as yearly basis for
review of accounts and financial statements.
Application
4 Each section of the checklist is on a separate sheet of the excel file. The Outline
sheet provides links to the applicable IPSAS/PPSAS standard. The tabs
containing the standards are labeled according to the coding scheme indicated in
the Outline. There are 14 standards included in this checklist, as follows:
IPSAS/PPSAS 1 -
Presentation of Financial Statements 1-FS
IPSAS/PPSAS 2 -
Cash Flow Statements 2-CFS
IPSAS/PPSAS 3 -
Accounting Policies, Changes in Accounting
Estimates and Errors 3-AccP
IPSAS/PPSAS 9 -
Revenue from Exchange Transactions 9-RevX
IPSAS/PPSAS 12 -
Inventories 12-Inv
IPSAS/PPSAS 13 -
Leases 13-Leases
IPSAS/PPSAS 14 -
Events after the Reporting Date 14-Events
IPSAS/PPSAS 16 -
Investment Property 16-IP
IPSAS/PPSAS 17 -
Property, Plant and Equipment 17-PPE
Intro, Page 2 of 231

IPSAS/PPSAS 21 -
Impairment of Non-Cash Generating Assets 21-ImpNC
IPSAS/PPSAS 23 -
Revenue from Non- Exchange Transactions
(Taxes and Transfers) 23-RevNonX
IPSAS/PPSAS 24 -
Presentation of Budget Information
in Financial Statements 24-Budget
IPSAS/PPSAS 26 -
Impairment of Cash Generating Assets 26-ImpC
IPSAS/PPSAS 27 -
Agriculture 27-Agr
5 The IPSAS/PPSAS sheets contain 5 columns. Column 1 presents the

standards/requirements that the Auditor needs to evaluate whether these are
existing in/complied by the NGA under audit. It also includes notes to guide the
Auditor in the interpretation/analysis of the standards. The Notes are in green
italicized font. Whenever a paragraph number is indicated in the notes, this refers
to the paragraph number of the applicable IPSAS. Column 2 indicates the
pertinent reference for the standards as well as the notes cited in Column 1.
6 In column 3, answers are required where there is a light yellow cell with gradient
fill. The cell has a drop down list from which the answer can be selected: Yes, No,
N/A. If the Auditor is not yet ready with an answer, the cell can be left blank for
the Auditor to return later. All "No" answers should be reviewed carefully as these
are indications of non-compliance to the IPSAS/PPSAS.
7 The Auditor is required to indicate in Column 4, the index number of the working
paper evidencing the procedures undertaken to evaluate compliance of the NGA to
the pertinent standards and in Column 5, initial observations or remarks.
8 On the right most portion of the the IPSAS/PPSAS sheets is an additional column
enumerating the information/data elements that can be included in the working
papers. For IPSAS/PPSAS relating to financial statements preparation, i.e.,
IPSAS/PPSAS 1, 2, 3, 14, and 24, as well as for the Disclosure portion of the
other IPSASs/PPSASs, the verified FS and NFS may already serve as working
paper.

Note that this last column is not part of the checklists but is simply a guide. The
auditor may design his/her own working paper in a manner or format he/she
deems fit for the purpose.
9 To facilitate the work of the Auditor, he/she may initially request the management
personnel concerned to fill-out the checklist, specifically columns 1, 2 and 3 and
to provide the data needed for the working papers. This way, management can also
make its own assessment of whether its accounts and transactions are already
IPSAS/PPSAS compliant.
It should be emphasized, however, that the guide checklist is primarily the

responsibility of the Auditor. Hence, he/she still has to verify all the
answers/information provided by the management personnel.
10 The IPSAS/PPSAS sheets, ie., the individual checklists are generally presented
based on the area covered. For standards on the financial statements
(IPSAS/PPSAS 1, 2, and 24), the checklists include the general considerations,
content and structure of the financial statements. For standards dealing with
specific accounts/transactions (IPSAS/PPSAS 3, 9, 12, 13, 14, 16, 17, 21, 23, 26,
and 27), the focus is on initial recognition, measurement, and disclosure
requirements.
11 Questions on specific sections/areas may be directed to the Government

Accountancy Sector.
12 The following acronyms are used:

CFS - Cash Flow Statement
DFA - Department of Foreign Affairs
DV - Disbursement Voucher
FS - Financial Statements
GBE - Government Business Enterprise
GFI - Government Financial Institution
GOCC - Government Owned or Controlled Corporation
IG - Implementation Guidance
IP - Investment Property
IPSAS - International Public Sector Accounting Standards
JEV - Journal Entry Voucher
LGU - Local Government Unit
LTFRB - Land Transportation and Franchising Board
LTO - Land Transportation Office
NFS - Notes to Financial Statements
NG - National Governmnent
NGA - National Governmnent Agency

NIRC - National Internal Revenue Code
NTC - National Telecommunications Commission
OR - Official Receipt
PAG - Philippine Application Guidance
PAGCOR - Philippine Amusement and Gaming Corporation
PCSO - Philippine Charity Sweepstakes Office
PGAM - Philippine Government Accounting Manual
PPE - Property, Plant and Equipment
PPSAS - Philippine Public Sector Accounting Standards
PRC - Professional Regulatory Commission
RCA - Revised Chart of Accounts
RMC - Revenue Memorandum Circular
SCNAE - Statement of Changes in Net Assets/Equity
SFPe - Statement of Financial Performance
SFPo - Statement of Financial Position
WP - Working Paper

Annex 1
IPSAS/PPSAS 1 - Presentation of Financial Statements
Yes/ WP
Suggested WP/
Standards/Requirements Reference No/ Index Remarks
Minimum Requirement
NA Number
The PGAM and RCA shall be used as reference in
the preparation and presentation of the financial
statements of the NGA.
General Considerations, Structure and Content
1 The financial statements of the NGA comprise: IPSAS 1:21 Refer to FS and NFS
(a) A statement of financial position;

(b) A statement of financial performance;
(c) A statement of changes in net assets/equity;
(d) A cash flow statement;
(e) A comparison of budget and actual amounts; and

(f) Notes, comprising a summary of significant
accounting policies and other explanatory notes.
Paragraph 21 requires preparation of a comparison PPSAS 1,
of budget and actual amounts either as a separate PAG 4
additional financial statement or as a budget column
in the financial statements. However, for NGAs, a
separate additional financial statement for
comparison of budget and actual amounts shall be
prepared and submitted.
Annex 1, Page 6 of 231

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
The notes may also include schedules. IPSAS 1:22
2 The NFS are not used to justify/rectify inappropriate IPSAS 1:30

accounting policies adopted by the NGA.
3 The NFS include an explicit and unreserved IPSAS 1:28

statement that the NGA complies with IPSAS-
PPSAS.
Financial statements shall not be described as IPSAS 1:28
complying with IPSAS-PPSAS unless they comply
with all the requirements of IPSAS-PPSAS.
IPSAS1 sets out the overall considerations for the PPSAS 1,

structure, form and content of financial statements PAG 1
prepared under the accrual basis of accounting. The
IPSAS-PPSAS is generally on accrual basis of
accounting except for transactions accounted for
differently as required by law.
4 The financial statements present fairly the financial IPSAS 1:27

position, financial performance, and cash flows of
the NGA.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
A fair presentation is achieved by compliance with IPSAS
applicable IPSAS-PPSAS. It requires faithful 1:27, 29
representation of the effects of transactions, other
events, and conditions in accordance with the
definitions and recognition criteria for assets,
liabilities, revenue, and expenses set out in IPSAS-
PPSAS. The application of IPSAS-PPSAS, with
additional disclosures when necessary, is presumed
to result in financial statements that achieve a fair
presentation.
Financial statements shall not be described as IPSAS 1:28

complying with IPSAS-PPSAS unless they comply
with all the requirements of IPSAS-PPSAS.
A fair presentation also requires a NGA: IPSAS 1:29
(a) To select and apply accounting policies in

accordance with IPSAS-PPSAS 3.
(b) To present information, including accounting
policies, in a manner that provides relevant, reliable,
comparable, and understandable information.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(c) To provide additional disclosures when
compliance with the specific requirements in IPSAS-
PPSAS is insufficient to enable users to understand
the impact of particular transactions, other events,
and conditions on the agency’s financial position and
financial performance.
The responsibility for the fair presentation and PPSAS 1,

reliability of financial statements rests with the PAG 3
management of the reporting agency, particularly the
head of accounting unit/finance office and the head
of agency or his authorized representative.
5 In the extremely rare circumstances in which the IPSAS 1:31

NGA concludes that compliance with a requirement
in a Standard would be so misleading that it would
conflict with the objective of financial statements, it
departs from that requirement only when:
(a) existing laws and regulations require, or IPSAS 1:31

otherwise do not prohibit, such a departure; and
(b) the departure is in the manner set out in IPSAS 1:31
Paragraph 32 (Item No. 6 below).

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
An item of information would conflict with the IPSAS 1:36
objective of financial statements when it does not
represent faithfully the transactions, other events,
and conditions that it either purports to represent or
could reasonably be expected to represent and,
consequently, it would be likely to influence decisions
made by users of financial statements.
6 When the NGA departs from a requirement of a IPSAS 1:32

Standard in accordance with Paragraph 31 (Item No.
5 above), it discloses:
(a) That management has concluded that the financial
statements present fairly the NGA’s financial
position, financial performance, and cash flows;
(b) That it has complied with applicable IPSAS-

PPSAS, except that it has departed from a particular
requirement to achieve a fair presentation;

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(c) The title of the Standard from which the NGA has
departed, the nature of the departure, including the
treatment that the Standard would require, the reason
why that treatment would be so misleading in the
circumstances that it would conflict with the
objective of financial statements set out in the
Standard, and the treatment adopted; and
(d) For each period presented, the financial impact of

the departure on each item in the financial statements
that would have been reported in complying with the
requirement.
7 When the NGA has departed from a requirement of a IPSAS 1:33
Standard in a prior period, and that departure affects
the amounts recognized in the financial statements
for the current period, it discloses:
(a) The title of the Standard from which it has
departed, the nature of the departure, including the
treatment that the Standard would require, the reason
why that treatment would be so misleading in the
circumstances that it would conflict with the
objective of financial statements set out in the
Standard, and the treatment adopted; and

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(b) For each period presented, the financial impact of
the departure on each item in the financial statements
that would have been reported in complying with the
requirement.
8 In the extremely rare circumstances in which the IPSAS 1:35
NGA concludes that compliance with a requirement
in a Standard would be so misleading that it would
conflict with the objective of financial statements but
the existing laws and regulations prohibits departure
from the requirement, the NGA, to the maximum
extent possible, reduces the perceived misleading
aspects of compliance by disclosing:
(a) The title of the Standard in question, the nature of

the requirement, and the reason why it has concluded
that complying with that requirement is so
misleading in the circumstances that it conflicts with
the objective of financial statements; and
(b) For each period presented, the adjustments to

each item in the financial statements that it has
concluded would be necessary to achieve a fair
presentation.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
9 In preparing the financial statements, the officers IPSAS 1:38
responsible for their preparation made an assessment
of the NGA’s ability to continue as a going concern.
The NGA shall not prepare its financial statements IPSAS 1:38
on a going concern basis if those responsible for the
preparation of the financial statements or the
governing body determine after the reporting date
either that there is an intention to liquidate the
agency or to cease operating, or that there is no
realistic alternative but to do so.
10 Material uncertainties related to events or conditions IPSAS 1:38

which may cast significant doubt upon the NGA’s
ability to continue as a going concern are disclosed
where those responsible for the preparation of the
financial statements are aware, in making their
assessment, of such uncertainties.
11 Where the financial statements are not prepared on a IPSAS 1:38

going concern basis, the NGA discloses the
following:
(a) the fact that the financial statements are not
prepared on a going concern basis;

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(b) the basis on which the financial statements have
been prepared; and
(c) the reason why the NGA is not considered to be a
going concern.
12 The presentation and classification of items in the IPSAS 1:42
financial statements are retained from one period to
the next.
Paragraph 42 allows changes in the presentation of PPSAS 1,
financial statements if it is apparent that the changed PAG 5
presentation provides information that is reliable
and is more relevant to users of the financial
statements, and the revised structure is likely to
continue, so that comparability is not impaired. For
NGAs, this is not allowed. However, there are
instances when IPSAS-PPSAS may require a change
in presentation.
13 Each material class of similar items is presented IPSAS 1:45

separately in the financial statements.
14 Items of a dissimilar nature or function are presented IPSAS 1:45
separately unless they are immaterial.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
An item that is not sufficiently material to warrant IPSAS 1:46
separate presentation on the face of those statements
may nevertheless be sufficiently material for it to be
presented separately in the notes.
Applying the concept of materiality means that a IPSAS 1:47

specific disclosure requirement in an IPSAS-PPSAS
need not be satisfied if the information is not
material.
15 Assets and liabilities are not offset unless required or IPSAS
permitted by IPSAS-PPSAS or when offsetting 1:48, 49
reflects the substance of the transaction or other
event.
16 Revenue and expenses are not offset unless required IPSAS
or permitted by IPSAS-PPSAS or when offsetting 1:48, 49
reflects the substance of the transaction or other
event.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
For example, IPSAS-PPSAS 9 - Revenue from IPSAS
Exchange Transactions requires measurement of 1:50, 51
revenues at the fair value of consideration received
or receivable, taking into account the amount of any
trade discounts and volume rebates. An agency may
also choose presentation that reflects the substance
of the transaction or other event, by netting any
revenue with related expenses arising on the same
transaction, such as deducting from the proceeds on
disposal the carrying amount of an asset and related
selling expenses.
17 The NGA discloses comparative information in IPSAS 1:53

respect of the previous period for all amounts
reported in the financial statements, except when an
IPSAS-PPSAS permits or requires otherwise.
18 The NGA includes comparative information for IPSAS 1:53
narrative and descriptive information when it is
relevant to an understanding of the current period’s
financial statements.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
Comparative information is not required in respect IPSAS
of the financial statements for which accrual 1:151
accounting is first adopted in accordance with
IPSAS-PPSAS.
19 The NGA reclassifies comparative amounts when the IPSAS 1:55
presentation of items in the financial statements is
amended because of a requirement of IPSAS/PPSAS,
unless the reclassification is impracticable.
20 When comparative amounts are reclassified, the IPSAS 1:55

NGA discloses:
(a) The nature of the reclassification;
(b) The amount of each item or class of items that is
reclassified; and
(c) The reason for the reclassification.
21 When it is impracticable to reclassify comparative IPSAS 1:56
amounts, the NGA discloses:
(a) The reason for not reclassifying the amounts; and
(b) The nature of the adjustments that would have

been made if the amounts had been reclassified.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
The financial statements are identified clearly and IPSAS 1:61
distinguished from other information in the same
published document.
IPSAS-PPSAS applies only to financial statements, IPSAS 1:62
and not to other information presented in an annual
report or other document. Therefore, it is important
that users can distinguish information that is
prepared using IPSAS-PPSAS from other
information that may be useful to users but is not the
subject of those requirements.
22 Each component of the financial statements is IPSAS 1:63

identified clearly.
This is normally met by presenting page, group or IPSAS 1:64
column headings on each page of the financial
statements. Judgment is required in determining the
best way of presenting such information.
23 The following information are displayed IPSAS 1:63

prominently, and repeated when it is necessary for a
proper understanding of the information presented:

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(a) The name of the reporting entity or other means IPSAS 1:63
of identification, and any change in that information
from the preceding reporting date;
(b) Where applicable, whether the financial IPSAS 1:63
statements cover the individual agency or the
economic entity;
For financial reporting purposes, economic entity IPSAS
here refers to a group of entities comprising the 1:7,8
controlling entity and any controlled entities.
Control is the power to govern the financial and IPSAS 2:8

operating policies of another entity so as to benefit
from its activities.
(c) The reporting date or the period covered by the IPSAS 1:63
financial statements, whichever is appropriate to that
component of the financial statements;
(d) The presentation currency; IPSAS 1:63
(e) The level of rounding used in presenting amounts IPSAS 1:63

in the financial statements.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
Financial statements are often made more IPSAS 1:65
understandable by presenting information in
thousands or millions of units of the presentation
currency. This is acceptable as long as the level of
rounding in presentation is disclosed and material
information is not omitted.
24 The financial statements of the NGA are presented at IPSAS 1:66

least annually.
Paragraph 66 allows entities to change their PPSAS,
reporting date for a period longer or shorter than PAG 6
one year. Under IPSAS-PPSAS, the reporting date is
fixed.
Statement of Financial Position
25 The NGA presents current and non-current assets, IPSAS 1:70
and current and non-current liabilities, as either:
(a) separate classifications on the face of the SFPo;
or
(b) in order of liquidity, if it provides information
that is reliable and more relevant.
Refer to the presentation required under PGAM

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
26 For each asset and liability line item that combines IPSAS 1:71
amounts expected to be recovered or settled (a) no
more than twelve months after the reporting date, and
(b) more than twelve months after the reporting date,
the NGA discloses the amount expected to be
recovered or settled after more than twelve months.
27 An asset is classified as current when: IPSAS 1:76
(a) It is expected to be realized in, or is held for sale

or consumption in, the agency’s normal operating
cycle;
(b) It is held primarily for the purpose of being
traded;
(c) It is expected to be realized within twelve months
after the reporting date; or
(d) It is cash or a cash equivalent, unless it is
restricted from being exchanged or used to settle a
liability for at least twelve months after the reporting
date.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
Cash comprises cash on hand and demand deposits IPSAS 2:8
while cash equivalents are short-term, highly liquid
investments that are readily convertible to known
amounts of cash and which are subject to an
insignificant risk of changes in value. (Refer also to
RCA).
28 All other assets are classified as non-current. IPSAS 1:76
29 A liability is classified as current when it satisfies IPSAS 1:80

any of the following criteria:
(a) It is expected to be settled in the agency’s normal
operating cycle;
(b) It is held primarily for the purpose of being
traded;
(c) It is due to be settled within twelve months after
the reporting date; or
(d) The NGA does not have an unconditional right to
defer settlement of the liability for at least twelve
months after the reporting.
30 All other liabilities are classified as non-current. IPSAS 1:80
31 As a minimum, the face of the SFPo includes line IPSAS 1:88

items that present the following amounts:

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(a) Cash and cash equivalents;
(b) Financial assets (excluding (c), (d), and (e));
(c) Investments accounted for using the equity
method;
(d) Recoverables from non-exchange transactions
(taxes and transfers);
(e) Receivables from exchange transactions;
(f) Inventories;
(g) Investment property;
(h) Property, plant, and equipment;
(i) Intangible assets;
(j) Financial liabilities (excluding (k), (l), (m));
(k) Taxes and transfers payable;
(l) Payables under exchange transactions;
(m) Provisions; and
(n) Net assets/equity.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
There is no prescribed order or format in which IPSAS 1:90
items are to be presented. The preceding is simply a COA
list of items which are sufficiently different in nature Circular
or function to warrant separate presentation on the No. 2013-
face of the SFPo. The descriptions to be used and the 002
ordering of items or aggregation of similar items
should conform to the RCA and PGAM as
prescribed.
32 Additional line items, headings, and sub-totals are IPSAS 1:89

presented on the face of the SFPo when such
presentation is relevant to an understanding of the
agency’s financial position.
Any additional line items, headings and sub-totals
presented on the face of the SFPo shall be in
accordance with PGAM and RCA.
33 The NGA discloses, either on the face of the SFPo or IPSAS 1:93
in the notes, further sub-classifications of the line
items presented, classified in a manner appropriate to
the NGA’s operations.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
The detail provided in sub-classifications depends on IPSAS 1:94
the requirements of IPSAS-PPSAS and on the size,
nature and function of the amounts involved. Thus,
reference to the individual IPSAS-PPSAS is
necessary before an intelligent assessment can be
made.
Statement of Financial Performance

34 All items of revenue and expense recognized in a IPSAS 1:99
period are included in the SFPe, unless an IPSAS-
PPSAS requires otherwise.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
Normally, all items of revenue and expense IPSAS
recognized in a period are included in surplus or 1:100
deficit. This includes the effects of changes in
accounting estimates. However, circumstances may
exist when particular items may be excluded from
surplus or deficit for the current period. Examples
are correction of errors and the effect of changes in
accounting policies (IPSAS-PPSAS 3), gain and
losses arising on translating the financial statements
of a foreign operation (IPSAS-PPSAS 4), and gains
or losses on remeasuring available-for-sale financial
assets (IPSAS-PPSAS 29), Refer also to other IPSAS-
PPSAS standards.
35 As a minimum, the face of the SFPe includes line IPSAS

items that present the following amounts for the 1:102
period:
(a) Revenue;
(b) Finance costs;
(c) Share of the surplus or deficit of associates and
joint ventures accounted for using the equity method;

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(d) Pre-tax gain or loss recognized on the disposal of
assets or settlement of liabilities attributable to
discontinuing operations; and
(e) Surplus or deficit.
36 Additional line items, headings, and subtotals are IPSAS
presented on the face of the SFPe when such 1:104
presentation is relevant to an understanding of the
agency’s financial performance.
Additional line items, descriptions used and the
ordering of items shall be in accordance with the
RCA and PGAM.
37 The NGA presents the following items either on the
face of the SFPe or in the notes:
(a) a sub-classification of total revenue, classified in IPSAS
a manner appropriate to the agency’s operations; 1:108
(b) separate disclosure of the nature and amount of IPSAS
revenue and expense when material; and 1:106

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
Circumstances that would give rise to a separate IPSAS
disclosure of items of revenue and expense include: 1:107
(a) restructuring of the activities of an agency and
reversals of any provisions for the costs of
restructuring; (b) Disposals of items of property,
plant, and equipment; (c) Privatizations or other
disposals of investments; (d) Discontinuing
operations; (e) Litigation settlements; and (f) Other
reversals of provisions.
(c) an analysis of expenses using a classification IPSAS

based on either the nature of expenses or their 1:109
function within the agency, whichever provides
information that is reliable and more relevant.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
Expenses are sub-classified to highlight the costs and IPSAS
cost recoveries of particular programs, activities, or 1:111, 112,
other relevant segments of the reporting entity. 113
Examples of aggregation by nature of expenses are
depreciation, communication expenses,
transportation costs, employee benefits, etc.
Expenses may also be classified according to the
program or purpose for which they were made, such
as poverty reduction, social development, peace and
security, anti-corruption, etc.
NGAs that opts to present an analysis of expenses by IPSAS

function shall disclose additional information on the 1:115
nature of expenses such as depreciation,
amortization and employee benefits expense.Refer to
RCA and PGAM.
Statement of Changes in Net Assets/Equity

38 The NGA presents the SCNAE showing on the face IPSAS
of the statement: 1:118
(a) Surplus or deficit for the period;

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(b) Each item of revenue and expense for the period
that, as required by other Standards, is recognized
directly in net assets/equity, and the total of these
items;
(c) Total revenue and expense for the period
(calculated as the sum of (a) and (b)); and
(d) For each component of net assets/equity
separately disclosed, the effects of changes in
accounting policies and corrections of errors
recognized in accordance with IPSAS-PPSAS 3.
The total adjustment to each component of net IPSAS
assets/equity from changes in accounting policies 1:124
and from corrections of errors shall be disclosed for
each prior period and the beginning of the period.
39 The NGA presents, either on the face of the IPSAS

statement of changes in net assets/equity or in the 1:119
notes:
(a) The amounts of transactions with owners acting
in their capacity as owners, showing separately
distributions to owners;

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(b) The balance of accumulated surpluses or deficits
at the beginning of the period and at the reporting
date, and the changes during the period; and
(c) To the extent that components of net assets/equity

are separately disclosed, a reconciliation between the
carrying amount of each component of net
assets/equity at the beginning and the end of the
period, separately disclosing each change.
Cash Flow Statement

40 IPSAS-PPSAS 2 sets out requirements for the
presentation of the cash flow statement and related
disclosures.
Notes to the Financial Statements
41 The NGA: IPSAS
1:127
(a) Presents information about the basis of
preparation of the financial statements and the
specific accounting policies used;
(b) Discloses information required by IPSAS-PPSAS
that is not presented on the face of the SFPo, SFPe,
SCNAE, CFS; and

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(c) Provides additional information that is not
presented on the face of the SFPo, SFPe, SCNAE,
CFS, but that is relevant to an understanding of any
of them.
42 The NFS is, as far as practicable, presented in a IPSAS
systematic manner. 1:127
43 Each item on the face of the SFPo, SFPe, SCNAE, IPSAS
CFS is cross-referenced to any related information in 1:127
the NFS.
44 The NGA discloses in the summary of significant IPSAS
accounting policies: 1:132
(a) The measurement basis (or bases) used in
preparing the financial statements;
(b) The extent to which it has applied any transitional
provisions (if applicable); and
(c) The other accounting policies used that are
relevant to an understanding of the financial
statements.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
45 The NGA discloses, in the summary of significant IPSAS
accounting policies or other notes, the judgments, 1:137
apart from those involving estimations, management
has made in the process of applying the agency’s
accounting policies that have the most significant
effect on the amounts recognized in the financial
statements.
In the process of applying the various accounting IPSAS

policies, management makes various judgments. For 1:138
example, management makes judgments in
determining: whether assets are investment
properties; whether lease agreements entered are
finance or operating leases; whether, in substance,
particular sales of goods are financing arrangements
and therefore do not give rise to revenue.
46 The NGA discloses in the NFS information about: IPSAS

1:140
(a) the key assumptions concerning the future; and

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(b) other key sources of estimation uncertainty at the
reporting date, that have a significant risk of causing
a material adjustment to the carrying amounts of
assets and liabilities within the next financial year.
47 In respect of those assets and liabilities, the NFS IPSAS

includes details of: 1:140
(a) Their nature; and
(b) Their carrying amount as at the reporting date.
The key assumptions and other key sources of IPSAS
estimation uncertainty relate to the estimation of the 1:141, 142
effects of uncertain future events on assets and
liabilities at the reporting date that require judgment.
For example, allowance for uncollectibles,
provisions subject to the future outcome of litigation
in progress, etc.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
When it is impracticable to disclose the extent of the IPSAS
possible effects of a key assumption or another key 1:146
source of estimation uncertainty at the reporting
date, the NGA discloses that it is reasonably
possible, based on existing knowledge, that outcomes
within the next financial year that are different from
assumptions could require a material adjustment to
the carrying amount of the asset or liability affected.
In all cases, the agency discloses the nature and
carrying amount of the specific asset or liability (or
class of assets or liabilities) affected by the
assumption.
48 The NGA discloses information that enables users of IPSAS

its financial statements to evaluate its objectives, 1:148A
policies, and processes for managing its
funds/budget.
To comply with this, the NGA discloses the IPSAS
following: 1:148B
(a) Qualitative information about its objectives,
policies, and processes for managing its
funds/budget;

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(b) Summary quantitative data about its
funds/budget;
(c) Any changes in (a) and (b) from the previous
period;
(d) Whether during the period it complied with any
externally imposed capital requirements to which it
is subject (Refer to PGAM);
(e) When it has not complied with such externally
imposed capital requirements, the consequences of
such non-compliance.
49 The NGA discloses the following, if not disclosed IPSAS
elsewhere in information published with the financial 1:150
statements:
(a) Its domicile and legal form, and the jurisdiction
within which it operates;
(b) A description of the nature of its operations and
principal activities;
(c) A reference to the relevant legislation governing
its operations;
(d) The name of the controlling entity and the
ultimate controlling entity of the economic entity
(where applicable); and

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(d) If it is a limited life entity, information regarding
the length of its life.

Annex 2
IPSAS/PPSAS 2 - Cash Flow Statements
Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
Presentation
1 The NGA reports in its CFS cash flows during the Refer to FS and NFS
period classified by:
(a) operating activities IPSAS 2:18
Cash flows from operating activities are primarily IPSAS 2:22

derived from the principal cash-generating activities
of the agency. Examples of cash flows from operating
activities are:
a) Cash receipts from taxes, fines and penalties;
(b) Cash receipts from charges for goods and
services provided by the agency;
(c) Cash receipts from shares, grants or transfers and
other appropriations or other budget authority made
by the national government or other government
agencies;
(d) Cash payments to suppliers for goods and
services;
(e) Cash payments to and on behalf of employees;
and
(f) Cash receipts or payments in relation to litigation
settlements.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(b) investing activities IPSAS 2:18
Investing activities are the acquisition and disposal of IPSAS 2:8,

long-term assets and other investments not included 25
in cash equivalents. Only cash outflows that result in
a recognized asset in the SFPo are eligible for
classification as investing activities. Examples of cash
flows arising from investing activities include cash
payments to acquire and cash receipts from sales of
PPE, and cash payments to acquire and cash receipts
from sale of equity or debt instruments.
(c) financing activities IPSAS 2:18

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
Financing activities are activities that result in IPSAS 2:8,
changes in the size and composition of the 26
contributed capital and borrowings of the entity.
Examples are cash proceeds from issuing debentures,
loans, notes, bonds, mortgages, and other short or
long-term borrowings; cash repayments of amounts
borrowed; and cash payments by a lessee for the
reduction of the outstanding liability relating to a
finance lease.
2 The NGA reports cash flows from operating activities IPSAS 2:27
using the direct method, whereby major classes of
gross cash receipts and gross cash payments are
disclosed.
IPSAS allows an agency to use either the direct PPSAS2,
method or indirect method in reporting cash flows PAG 2
from operating activities. For uniformity, the direct
method shall be adopted.
3 The NGA provides, as part of the CFS or NFS, a IPSAS 2:29
reconciliation of the surplus/deficit from ordinary
activities with the net cash flow from operating
activities.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
IPSAS/PPSAS does not strictly require but only IPSAS 2:29
encourages NGAs to provide a reconciliation of the
surplus/deficit from ordinary activities with the net
cash flow from operating activities.
4 The NGA reports separately major classes of gross IPSAS 2:31
cash receipts and gross cash payments arising from
investing and financing activities, except as required
in paragraphs 32 and 35.
5 Cash flows arising from the following operating, IPSAS 2:32
investing, or financing activities may be reported on a
net basis:
(a) Cash receipts collected and payments made on IPSAS 2:32
behalf of customers, taxpayers, or beneficiaries when
the cash flows reflect the activities of the other party
rather than those of the NGA; and
This refers only to transactions where the resulting IPSAS 2:33
cash balances are controlled by the reporting entity.
Examples are:
(a) The collection of taxes by one level of government
for another level of government, not including taxes
collected by a government for its own use as part of a
tax-sharing arrangement;

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(b) The acceptance and repayment of demand
deposits of a public financial institution;
(c) Funds held for customers by an investment or
trust entity; and
(d) Rents collected on behalf of, and paid over to, the
owners of properties.
(b) Cash receipts and payments for items in which the IPSAS 2:32
turnover is quick, the amounts are large, and the
maturities are short.
Examples are: IPSAS 2:34
(a) The purchase and sale of investments; and
(b) Other short-term borrowings, for example, those
that have a maturity period of three months or less.
6 The NGA presents the following cash flows on a net IPSAS 2:35
basis for:
(a) Cash receipts and payments for the acceptance
and repayment of deposits with a fixed maturity date;
(b) The placement of deposits with, and withdrawal

of deposits from, other financial institutions; and
(c) Cash advances and loans made to customers and
the repayment of those advances and loans.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
7 The NGA records cash flows arising from IPSAS 2:36
transactions in a foreign currency using the functional
currency by applying to the foreign currency amount
the exchange rate between the functional currency
and the foreign currency at the date of the cash flow.
The cash flows of a foreign controlled entity shall be IPSAS 2:37

translated at the exchange rates between the
functional currency and the foreign currency at the
dates of the cash flows.
Foreign currency is a currency other than the IPSAS 4:10
functional currency of the entity. Functional
currency, on the other hand, is the currency of the
primary economic environment in which the entity
operates. In the Philippines, this is the Philippine
Peso.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
Unrealized gains and losses arising from changes in IPSAS 2:39
foreign currency exchange rates are not cash flows.
However, the effect of exchange rate changes on cash
and cash equivalents held or due in a foreign
currency is reported in the cash flow statement in
order to reconcile cash and cash equivalents at the
beginning and the end of the period. This amount is
presented separately from cash flows from operating,
investing, and financing activities, and includes the
differences, if any, if those cash flows had been
reported at end of period exchange rates.
8 Cash flows from interest received and paid are IPSAS 2:40
disclosed separately.
9 Cash flows from dividends or similar distributions IPSAS 2:40
received and paid are disclosed separately.
10 Interest and dividends are classified in a consistent IPSAS 2:40
manner from period to period as either operating,
investing, or financing activities.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
Interest paid and interest and dividends or similar IPSAS
distributions received may be classified as operating 2:42, 43
cash flows because they enter into the determination
of surplus or deficit while dividends or similar
distributions paid may be classified as a financing
cash flow because they are a cost of obtaining
financial resources. Refer to PGAM for guidelines.
11 Investing and financing transactions that do not IPSAS 2:54

require the use of cash or cash equivalents are
excluded from the CFS.
12 Investing and financing transactions that do not IPSAS 2:54
require the use of cash or cash equivalents are
disclosed in a way that provides all the relevant
information about these investing and financing
activities.
Many investing and financing activities do not have a IPSAS 2:55

direct impact on current cash flows, although they do
affect the capital and asset structure of the agency.
Examples would be the acquisition of assets through
the exchange of assets, the assumption of directly
related liabilities, or by means of a finance lease.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
13 The NGA discloses the components of cash and cash IPSAS 2:56
equivalents, and presents a reconciliation of the
amounts in its CFS with the equivalent items reported
in the SFPo.

Annex 3
IPSAS/PPSAS 3 -Accounting Policies, Changes in Accounting Estimates and Errors
Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
Accounting Policies
1 The NGA applies accounting policy to transaction, IPSAS 3:9 Refer to FS and NFS
other event or condition in accordance with the
standards set out in IPSAS-PPSAS.
Accounting policies are the specific principles, bases, IPSAS 3:7
conventions, rules, and practices applied by an entity
in preparing and presenting financial statements.
The PAG accompanies and is an integral part of the

IPSAS-PPSAS and thus, is mandatory.
2 The NGA applies its accounting policies consistently IPSAS 3:16
for similar transactions, other events, and conditions,
unless an IPSAS specifically requires or permits
categorization of items for which different policies
are appropriate.
If an IPSAS/PPSAS requires or permits such IPSAS 3:16

categorization, an appropriate accounting policy
shall be selected and applied consistently to each
category.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
3 The NGA changes an accounting policy only if the IPSAS 3:17
change is required by an IPSAS-PPSAS or results in
the financial statements providing reliable and more
relevant information about the effects of transactions,
other events, and conditions on the agency’s financial
position, financial performance, or cash flows.
The following are changes in accounting policy:

(a) A change from one basis of accounting to another IPSAS 3:19
basis of accounting (accrual, cash, modified)
(b) A change in the accounting treatment, IPSAS 3:20

recognition, or measurement of a transaction, event,
or condition within a basis of accounting
The following are not changes in accounting IPSAS 3:21
policies:
(a) The application of an accounting policy for
transactions, other events or conditions that differ in
substance from those previously occurring; and

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(b) The application of a new accounting policy for
transactions, other events, or conditions that did not
occur previously or that were immaterial.
4 Subject to Paragraph 28:

(a) The NGA accounts for a change in accounting IPSAS 3:24
policy resulting from the initial application of an
IPSAS-PPSAS in accordance with the specific
transitional provisions, if any, in that Standard;
(b) When there is no specific transitional provisions, IPSAS 3:24
the NGA applies the change retrospectively; and
5 When a change in accounting policy is applied in IPSAS 3:27
accordance with (a) and (b) above, the NGA adjusts
the opening balance of each affected component of
net assets/equity for the earliest period presented, and
the other comparative amounts disclosed for each
prior period presented as if the new accounting
policy had always been applied.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
Paragraph 28 states that a change in accounting IPSAS 3:28
policy shall be applied retrospectively, except to the
extent that it is impracticable to determine either the
period-specific effects or the cumulative effect of the
change.
Applying a requirement is impracticable when the IPSAS 3:7

entity cannot apply it after making every reasonable
effort to do so. For a particular prior period, it is
impracticable to apply a change in an accounting
policy retrospectively or to make a retrospective
restatement to correct an error if:
(a) The effects of the retrospective application or

retrospective restatement are not determinable;
(b) The retrospective application or retrospective
restatement requires assumptions about what
management’s intent would have been in that period;
or

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(c) The retrospective application or retrospective
restatement requires significant estimates of amounts
and it is impossible to distinguish objectively
information about those estimates that:
(i) Provides evidence of circumstances that

existed on the date(s) as at which those amounts
are to be recognized, measured, or disclosed; and
(ii) Would have been available when the financial
statements for that prior period were authorized
for issue from other information.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
6 When it is impracticable to determine the period- IPSAS 3:29
specific effects of changing an accounting policy on
comparative information for one or more prior
periods presented, the NGA applies the new
accounting policy to the carrying amounts of assets
and liabilities as at the beginning of the earliest
period for which retrospective application is
practicable, which may be the current period, and
shall make a corresponding adjustment to the
opening balance of each affected component of net
assets/equity for that period.
7 When it is impracticable to determine the cumulative IPSAS 3:30

effect, at the beginning of the current period, of
applying a new accounting policy to all prior periods,
the NGA adjusts the comparative information to
apply the new accounting policy prospectively from
the earliest date practicable.
Disclosure of Accounting Policy

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
8 When initial application of an IPSAS-PPSAS (a) has IPSAS 3:33
an effect on the current period or any prior period,
(b) would have such an effect, except that it is
impracticable to determine the amount of the
adjustment, or (c) might have an effect on future
periods, the NGA discloses:
(a) The title of the Standard;

(b) When applicable, that the change in accounting
policy is made in accordance with its transitional
provisions;
(c) The nature of the change in accounting policy;
(d) When applicable, a description of the transitional
provisions;
(e) When applicable, the transitional provisions that
might have an effect on future periods;
(f) For the current period and each prior period
presented, to the extent practicable, the amount of the
adjustment for each financial statement line item
affected;
(g) The amount of the adjustment relating to periods
before those presented, to the extent practicable; and

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(h) If retrospective application as required is
impracticable for a particular prior period, or for
periods before those presented, the circumstances
that led to the existence of that condition and a
description of how and from when the change in
accounting policy has been applied.
Financial statements of subsequent periods need not IPSAS 3:33

repeat these disclosures.
9 When a voluntary change in accounting policy (a) IPSAS 3:34
has an effect on the current period or any prior
period, (b) would have an effect on that period,
except that it is impracticable to determine the
amount of the adjustment, or (c) might have an effect
on future periods, the NGA discloses:
(a) The nature of the change in accounting policy;

(b) The reasons why applying the new accounting
policy provides reliable and more relevant
information;
(c) For the current period and each prior period
presented, to the extent practicable, the amount of the
adjustment for each financial statement line item
affected;

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(d) The amount of the adjustment relating to periods
before those presented, to the extent practicable; and
(e) If retrospective application is impracticable for a

particular prior period, or for periods before those
presented, the circumstances that led to the existence
of that condition and a description of how and from
when the change in accounting policy has been
applied.
Financial statements of subsequent periods need not IPSAS 3:34

10 When the NGA has not applied a new IPSAS-PPSAS IPSAS 3:35
that has been issued but is not yet effective, it
discloses:
(a) This fact; and
(b) Known or reasonably estimable information
relevant to assessing the possible impact that
application of the new Standard will have on the
entity’s financial statements in the period of initial
application.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
In complying with this requirement, the agency may IPSAS 3:36
disclose:
(a) The title of the new IPSAS;
(b) The nature of the impending change or changes
in accounting policy;
(c) The date by which application of the Standard is
required;
(d) The date as at which it plans to apply the
Standard initially; and
(e) Either a discussion of the impact that initial
application of the Standard is expected to have on
the entity’s financial statements; or if that impact is
not known or reasonably estimable, a statement to
that effect.
Changes in Accounting Estimates

11 IPSAS 3:41
The NGA recognizes the effect of a change in an
accounting estimate, other than a change to which
paragraph 42 applies, prospectively by including it in
surplus or deficit in:
(a) The period of the change, if the change affects the
period only; or
(b) The period of the change and future periods, if
the change affects both.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
12 IPSAS 3:42
To the extent that a change in an accounting estimate
gives rise to changes in assets and liabilities, or
relates to an item of net assets/equity, the NGA
recognizes the change by adjusting the carrying
amount of the related asset, liability, or net
assets/equity item in the period of change.
Prospective recognition of the effect of a change in IPSAS 3:43
an accounting estimate means that the change is
applied to transactions, other events, and conditions
from the date of the change in estimate.
A change in accounting estimate is an adjustment of IPSAS 3:7

the carrying amount of an asset or a liability, or the
amount of the periodic consumption of an asset, that
results from the assessment of the present status of,
and expected future benefits and obligations
associated with, assets and liabilities. Changes in
accounting estimates result from new information or
new developments and, accordingly, are not
correction of errors.
Disclosure of Changes in Accounting Estimates

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
13 The NGA discloses the nature and amount of a IPSAS 3:44
change in an accounting estimate that has an effect in
the current period or is expected to have an effect on
future periods, except for the disclosure of the effect
on future periods when it is impracticable to estimate
that effect.
14 The NGA also discloses, if applicable, the fact that IPSAS 3:45
the amount of the effect in future periods is not
disclosed because estimating it is impracticable.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
Errors
15 Subject to paragraph 48, the NGA corrects material IPSAS 3:47
prior period errors retrospectively in the first set of
financial statements authorized for issue after their
discovery by:
(a) Restating the comparative amounts for prior
period(s) presented in which the error occurred; or
(b) If the error occurred before the earliest prior
period presented, restating the opening balances of
assets, liabilities and net assets/equity for the earliest
prior period presented.
Paragraph 48 states that prior period errors shall be IPSAS 3:48
corrected by retrospective restatement, except to the
extent that it is impracticable to determine either the
period-specific effects or the cumulative effect of the
error.
16 When it is impracticable to determine the period- IPSAS 3:49

specific effects of an error on comparative
information for one or more prior periods presented,
the NGA restates the opening balances of assets,
liabilities, and net assets/equity for the earliest period
for which retrospective restatement is practicable
(which may be the current period).

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
17 When it is impracticable to determine the cumulative IPSAS 3:50
effect, at the beginning of the current period, of an
error on all prior periods, the NGA restates the
comparative information to correct the error
prospectively from the earliest date practicable.
Disclosure of Errors
18 The NGA discloses the following for all material IPSAS 3:54
prior period errors corrected retrospectively:
(a) The nature of the prior period error;
(b) For each prior period presented, to the extent
practicable, the amount of the correction for each
financial statement line item affected;
(c) The amount of the correction at the beginning of
the earliest prior period presented; and
(d) If retrospective restatement is impracticable for a
particular prior period, the circumstances that led to
the existence of that condition and a description of
how and from when the error has been corrected.
Financial statements of subsequent periods need not


Annex 4
IPSAS/PPSAS 9 - Revenue from Exchange Transactions
Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
Recognition of Revenue
1 Items recorded as Service and Business Income are IPSAS 9:11 1. List of exchange transactions with
within the definition of revenues from exchange COA_ details of collection (OR number,
transactions: C2013-002 date and amount), breakdown of the
amount (principal, interest, penalty),
nature of collection/transaction,
period to which the payment will be
applied, reference/details in case
receipt is installment/partial, date
transaction was recorded in the
books, accounts used/recorded with
the corresponding amount, and
auditor's remark/observation.
Exchange transactions are transactions in which IPSAS 9:11

one entity receives assets or services, or has
liabilities extinguished, and directly gives
approximately equal value (primarily in the form
of cash, goods, services, or use of assets) to
another entity in exchange.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(a) rendering of services;
The rendering of services typically involves the IPSAS 9:7
performance by the entity of an agreed task over COA_C201
an agreed period of time. The services may be 3-002
rendered within a single period, or over more
than one period. Examples of services rendered
by NGAs for which revenue is typically received
in exchange may include income derived from
issuance of registration plates, tags and stickers
by LTO; franchises on radio/television
broadcasting by NTC, public conveyance by
LTFRB; professional licenses by PRC; and visas
and passports by DFA.
(b) sale of goods; and

Goods include items produced by an entity for the IPSAS 9:8
purpose of sale as well as goods purchased for COA_C201
resale. Examples of revenues arising from 3-002
exchange transactions derived from goods are
sale of merchandise, printed forms, materials,
publications, or land and other property held for
resale.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(c) The use by others of entity assets yielding
interest, royalties, and dividends or similar
distributions.
The use by others of entity assets gives rise to IPSAS 9:9
revenue in the form of (a) Interest COA_C201
earned/collected from loans receivable, bank 3-002
deposits/financial assets and NG advances for
GFIs/GOCCs’ debt service payments; (b)
Royalties from patents, trademarks, copyrights,
and other charges for the use of long-term assets
of the NGA; and (c) Dividends or similar
distributions earned/collected from equity
investments.
2 If the proceeds from the sale of goods are IPSAS 9:5, Refer to WP No. 1.
approximately of equal value with the goods sold, 11
the sale is recorded as revenue arising from exchange COA_C201
transaction, using the accounts provided for IPSAS 9. 3-002

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
3 Amounts collected as an agent of other government IPSAS 9:12 Refer to WP No. 1.
agencies or on behalf of other third parties are not
recorded as income, for example, the collection from
lessee of water and electricity payments on behalf of
water/electric company.
4 Financing inflows, such as borrowings are not IPSAS 9:13 Refer to WP No. 1.
recorded as revenues.
5 When the outcome of a transaction involving the Refer to WP No. 1.

rendering of services can be estimated reliably,
revenue is recognized:
(a) using the percentage of completion method; and IPSAS 9:19
(b) in the reporting periods in which the services are IPSAS 9:20
rendered.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
The outcome of a transaction can be estimated IPSAS 9:19
reliably when all the following conditions are
satisfied: (a) The amount of revenue can be
measured reliably; (b) It is probable that the
economic benefits or service potential associated
with the transaction will flow to the entity; (c) The
stage of completion of the transaction at the
reporting date can be measured reliably; and (d)
The costs incurred for the transaction and the
costs to complete the transaction can be measured
reliably.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
Depending on the nature of the transaction, the IPSAS 9:23,
percentage of completion method may use: (a) 24
Surveys of work performed; (b) Services
performed to date as a percentage of total
services to be performed; or (c) The proportion
that costs incurred to date bear to the estimated
total costs of the transaction. When services are
performed by an indeterminate number of acts
over a specified time frame, revenue may also be
recognized on a straight line basis over the
specified time frame.
6 When the outcome of the transaction involving the IPSAS 9:25 Refer to WP No. 1.
rendering of services cannot be estimated reliably,
revenue is recognized only to the extent of the
expenses recognized that are recoverable.
7 When the outcome of a transaction cannot be IPSAS 9:27 Refer to WP No. 1.

estimated reliably, and it is not probable that the
costs incurred will be recovered:
(a) revenue is not recognized; and

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(b) the cost incurred is recognized as expense.
When the uncertainties that prevented the IPSAS 9:27
outcome of the contract being estimated reliably
no longer exist, revenue is recognized using the
percentage of completion method.
8 Revenue from the sale of goods is recognized when IPSAS 9:28 Refer to WP No. 1.
all the following conditions have been satisfied:
(a) The NGA has transferred to the purchaser the

significant risks and rewards of ownership of the
goods;
(b) The NGA retains neither continuing managerial

involvement to the degree usually associated with
ownership nor effective control over the goods sold;
(c) The amount of revenue can be measured reliably;
(d) It is probable that the economic benefits or

service potential associated with the transaction will
flow to the NGA; and

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(e) The costs incurred or to be incurred in respect of
the transaction can be measured reliably.
In most cases, the transfer of the risks and IPSAS 9:29,
rewards of ownership coincides with the transfer 30
of the legal title or the passing of possession to
the purchaser. If the NGA retains significant risks
of ownership, such as when it retains an
obligation for unsatisfactory performance not
covered by normal warranty provisions, the
transaction is not a sale, and revenue is not
recognized.
9 Interest is recognized on a time proportion basis that IPSAS 9:34 Refer to WP No. 1.
takes into account the effective yield on the asset.
10 Royalties is recognized as they are earned in IPSAS 9:34 Refer to WP No. 1.

accordance with the substance of the relevant
agreement.
11 Dividends or similar distributions are recognized IPSAS 9:34 Refer to WP No. 1.
when the shareholder’s or the NGA’s right to receive
payment is established.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
12 When an uncertainty arises about the collectability of IPSAS 9:21, 2. List of uncollectable receivables
an amount already included in revenue, the 32, 38 already recorded as revenue
uncollectable amount, or the amount in respect of indicating the accounting treatment
which recovery has ceased to be probable, is applied by management
recognized as an expense.
Revenue is recognized only when it is probable that IPSAS 9:21,

the economic benefits or service potential associated 32, 38
with the transaction will flow to the entity. In some
cases, this may not be probable, thus, revenue is
recorded only when the consideration is received or
until an uncertainty is removed. However, when the
uncertainty is on the collectability of an amount
already included in revenue, the uncollectable
amount, or the amount in respect of which recovery
has ceased to be probable, is recognized as an
expense, rather than as an adjustment of the amount
of revenue originally recognized.
Measurement of Revenue

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
13 Revenue is measured at the fair value of the IPSAS 9:14, Refer to WP No. 2.
consideration received or receivable, taking into 15
account the amount of any trade discounts and
volume rebates.
The amount of revenue arising on a transaction is IPSAS 9:15
usually determined by the agreement between the
NGA and the purchaser or user of the asset or
service.
14 In case of financing transaction (installment), the fair IPSAS 9:16 3. Verified computation sheet.
value of the consideration is determined by Refer also to WP No. 1 above
discounting all future receipts using an imputed rate
of interest.
In most cases, the consideration is in the form of IPSAS 9:16
cash or cash equivalents, and the amount of revenue
is the amount of cash or cash equivalents received or
receivable. However, when the inflow of cash or cash
equivalents is deferred, the fair value of the
consideration may be less than the nominal amount
of cash received or receivable. Thus, there is a need
to determine the discounted value of the receipts.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
15 The imputed rate of interest used is either: Refer to WP No. 3.
(a) The prevailing rate for a similar instrument of an
issuer with a similar credit rating; or
(b) A rate of interest that discounts the nominal

amount of the instrument to the current cash sales
price of the goods or services.
16 In case of (b) above, the difference between the fair IPSAS 9:16
value and the nominal amount of the consideration is
recognized as interest revenue in accordance with
paragraphs 33 and 34.
17 Goods or services exchanged or swapped for goods IPSAS 9:17

or services that are of a similar nature and value are
not recorded as revenue.
This is often the case with commodities like oil or
milk, where suppliers exchange or swap inventories
in various locations to fulfill demand on a timely
basis in a particular location.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
18 Goods sold and services rendered in exchange for IPSAS 9:17
dissimilar goods or services are recorded as revenue.
19 The revenue (from exchange of dissimilar items) is IPSAS 9:17 4. Same as No. 1 above except the
measured at the fair value of the goods or services details of collection, where the item
received, adjusted by the amount of any cash or cash received, quantity, unit fair value and
equivalents transferred. total fair value are indicated instead
of the details of OR.
20 When the fair value of the (dissimilar) goods or IPSAS 9:17 Refer to WP No. 4.
services received cannot be measured reliably, the
revenue is measured at the fair value of the goods or
services given up, adjusted by the amount of any
cash or cash equivalents transferred.
Disclosure
21 The NGA discloses: IPSAS 9:39 Refer to FS/NFS.
(a) The accounting policies adopted for the
recognition of revenue, including the methods
adopted to determine the stage of completion of
transactions involving the rendering of services;

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(b) The amount of each significant category of
revenue recognized during the period, including
revenue arising from the rendering of services, the
sale of goods, interest, royalties and dividends or
similar distributions; and
(c) The amount of revenue arising from exchanges of

goods or services included in each significant
category of revenue.

Annex 5
IPSAS/PPSAS 12 - Inventories
Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
Initial Recognition
1 Items recorded as inventory are within the definition IPSAS 1. List of inventory items indicating
of inventory: 12:9, 11 the cost, breakdown of cost
COA_ (purchase price, taxes, freight,
C2013-002 discounts, etc. ), net realizable value,
current replacement cost, amount
recorded in the books,
acquisition/transaction date,
transaction type (exchange or non-
exchange), purpose of inventory
(distribution, consumption, sale),
costing method used (specific
identification, weighted average) and
(a) In the form of materials or supplies to be

consumed in the production process;
These include finished goods produced, or work-
in-progress being produced.
(b) In the form of materials or supplies to be
consumed or distributed in the rendering of services;

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
These include office supplies, accountable forms, COA_
medicines, laboratory supplies, fuel, instrctional C2013-002
materials, and strategic stockpiles maintained by IPSAS
the government as reserve for use in emergency 12:14
or other situations (examples: natural disasters or
civil defence).
(c) Held for sale or distribution in the ordinary

course of operations; or
These include goods purchased and held for
resale; and land and other property held for sale.
(d) In the process of production for sale or

distribution.
2 Inventories are measured at the lower of cost and net IPSAS Refer to WP No. 1.
realizable value (except where Nos. 3 and 4 below 12:15
apply).

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
Net realizable value is the estimated selling price in IPSAS 12:9
the ordinary course of operations, less the estimated
costs of completion and the estimated costs necessary
to make the sale, exchange, or distribution.
In case the net realizable value is used, this becomes

the cost of the inventories.
3 Where inventories are acquired through a non- IPSAS Refer to WP No. 1.

exchange transaction, their cost is measured at their 12:16
fair value as at the date of acquisition.
4 Where inventories are for distribution at no charge or IPSAS Refer to WP No. 1.

for a nominal charge, or for consumption in the 12:17
production of goods to be distributed at no charge or
for a nominal charge, they are measured at the lower
of cost and current replacement cost.
Current replacement cost is the cost the agency IPSAS 12:9

would incur to acquire the asset on the reporting
date.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
5 Where the government controls the rights to create IPSAS Refer to WP No. 1.
and issue various assets, including postal stamps and 12:13
currency, these items are not costed at face value, but
measured at their printing or minting cost (subject to
No. 2 above).
6 The cost of inventories comprises all costs of IPSAS Refer to WP No. 1.

purchase, costs of conversion, and other costs 12:18
incurred in bringing the inventories to their present
location and condition.
7 The costs of purchase of inventories comprise: Refer to WP No. 1.
(a) the purchase price; IPSAS

12:19
When a NGA/LGU purchase inventories on IPSAS
installment/deferred settlement terms, the 12:27
difference between the purchase price for normal
credit terms and the amount paid, is recognized
as interest expense over the period of the
financing.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(b) import duties and other taxes (other than those IPSAS
subsequently recoverable by the NGA from the 12:19
taxing authorities); and
(c) transport, handling, and other costs directly IPSAS

attributable to the acquisition of finished goods, 12:19
materials, and supplies.
Costs that are directly attributable to the IPSAS 5:21
acquisition of an item are those that would have
been avoided if the outlays on the item had not
been made.
8 Trade discounts, rebates, and other similar items are IPSAS Refer to WP No. 1.
deducted in determining the costs of purchase. 12:19
9 Borrowing costs incurred by the NGA, that are IPSAS 2. Schedule of borrowing costs paid
directly attributable to the purchase or production of 12:26 indicating the DV/Check number,
inventories are recorded as expense in the period in IPSAS JEV details (number, date, accounts
which thery are inccured. 5:17, 18, 19 recorded, particulars/description of
entry made, and amount involved)
and the auditor's remark/observation.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
Borrowing costs pertaining to loans borrowed by the PPSAS 5,
National Government which are recorded by the PAG2
Bureau of the Treasury are recorded as expense in
the period in which they are incurred.
10 The costs of conversion include (aplicable in IPSAS 3. List of expenses incurred in

manufacturing environment): 12:20, 21 relation to production/manufacturing
COA_C201 activities showing period covered,
3-002 nature of expense/transaction,
amount/cost, assignment of cost
(direct application allocation basis),
and auditor's remark/observation.
(a) costs directly related to the units of production,

such as direct labor; and
(b) systematic allocation of fixed and variable

production overheads that are incurred in
converting materials into finished goods based on
the normal capacity of the production facilities.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
Fixed production overheads are those indirect IPSAS
costs of production that remain relatively constant 12:20
regardless of (a) the volume of production, such
as depreciation and maintenance of factory
buildings and equipment, and (b) the cost of
factory management and administration. Variable
production overheads are those indirect costs of
production that vary directly, or nearly directly,
with the volume of production, such as indirect
materials and indirect labor.
The depreciation charge for a period is usually IPSAS

recognized in surplus or deficit, However, when 17:64, 65
the future economic benefits or service potential
embodied in an asset is absorbed in producing
other assets, the depreciation charge
mayconstitute part of the cost of the other asset,
and is included in its carrying amount.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
11 Unallocated overheads are recognized as an expense IPSAS Refer to WP No. 3.
in the period in which they are incurred. 12:21
12 When a production process results in more than one IPSAS Refer to WP No. 3.
product being produced simultaneously, and the costs 12:21
of conversion of each product are not separately
identifiable, the costs are allocated between the
products on a rational and consistent basis.
The allocation may be based (a) on the sales value of IPSAS

each product either at the stage in the production 12:21
process when the products become separately
identifiable, or at the completion of production or (b)
when the by-products, by their nature, are
immaterial, the costs of said by-products are
measured at net realizable value, and this value is
deducted from the cost of the main product.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
13 Costs incurred in relation to manufacturing activities IPSAS Refer to WP No. 3.
but are excluded from the cost of inventories and 12:25
recognized as expenses in the period in which they
are incurred include:
(a) Abnormal amounts of wasted materials, labor,

or other production costs;
(b) Storage costs, unless those costs are necessary

in the production process before a further
production stage;
(c) Administrative overheads that do not
contribute to bringing inventories to their present
location and condition; and
(d) Selling costs.
14 In case of service providers, inventories (except IPSAS Refer to WP No. 1.

work-in-progress of services to be provided for no or 12:2(d), 28
nominal consideration directly in return from the
recipients) are measured at the costs of production
activities directly attributable to the provision of the
service.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
These costs consist primarily of the labor and other IPSAS
costs of personnel directly engaged in providing the 12:28
service, including supervisory personnel and
attributable overheads. Labor and other costs
relating to sales and general administrative
personnel are not included.
15 Inventories comprising agricultural produce IPSAS Refer to WP No. 1 for for

harvested from biological assets are measured at their 12:29 IPSAS/PPSAS 27 - Agiculture
fair value less costs to sell at the point of harvest. IPSAS
27:18, 36
Measurement after Recognition

16 The cost of inventories that are not ordinarily IPSAS Refer to WP No. 1.
interchangeable, and goods or services produced and 12:32
segregated for specific projects is assigned using
specific identification of the individual costs.
17 The cost of inventories that are not specifically PPSAS 12, Refer to WP No. 1.
identifiable is assigned using the weighted average PAG 2
method.
18 The NGA uses the same cost formula for all PPSAS 34 Refer to WP No. 1.
inventories having similar nature and use to the
NGA.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
19 When inventories are sold, exchanged, or distributed, 4. Validated JEV taking up the
the carrying amount of those inventories is transaction with supporting
recognized as an expense. documents.
(a) in the period in which the related revenue is IPSAS

recognized; 12:44
(b) or if there is no related revenue, when the IPSAS

goods are distributed or the related service is 12:44, 45
rendered or upon billing for chargeable services.
Disclosure
20 The financial statements disclose: IPSAS Refer to FS/NFS.
12:47
(a) The accounting policies adopted in measuring
inventories, including the cost formula used;
(b) The total carrying amount of inventories and

the carrying amount in classifications appropriate
to theNGA;
(c) The carrying amount of inventories carried at
fair value less costs to sell;

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(d) The amount of inventories recognized as an
expense during the period; and
The amount of inventories recognized as an IPSAS
expense during the period consists of (a) those 12:49
costs previously included in the measurement of
inventory that has now been sold, exchanged, or
distributed, and (b)unallocated production
overheads and abnormal amounts of production
costs of inventories. The circumstances of the
NGA may also warrant the inclusion of other
costs, such as distribution costs.
(e) The amount of any writedown of inventories IPSAS

recognized as an expense in the period in 12:49
accordance with paragraph 42;

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
Text of Paragraph 42. IPSAS
A new assessment is made of net realizable value 12:42
in each subsequent period. When the
circumstances that previously caused inventories
to be written down below cost no longer exist, or
when there is clear evidence of an increase in net
realizable value because of changed economic
circumstances, the amount of the writedown is
reversed (i.e., the reversal is limited to the amount
of the original writedown) so that the new
carrying amount is the lower of the cost and the
revised net realizable value. This occurs, for
example, when an item of inventory that is carried
at net realizable value because its selling price
has declined, is still on hand in a subsequent
period and its selling price has increased.
(f) The amount of any reversal of any writedown IPSAS

that is recognized in the statement of financial 12:47
performance in the period in accordance with
paragraph 42;

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(g) The circumstances or events that led to the IPSAS
reversal of a writedown of inventories in 12:47
accordance with paragraph 42; and
(h) The carrying amount of inventories pledged as IPSAS
security for liabilities. 12:47

Annex 6
IPSAS/PPSAS 13 - Leases
Yes/ WP
Suggested WP/
NA Number Minimum Requirement
Accounting Treatment
1 The NGA distinguishes lease transactions as to: 1. List of all lease contracts
indicating the details of the contract
(parties involved, contract date,
period of lease, terms of payment,
inception date, commencement
date), lease classification (finance,
operating), agency classification
(lessor, lessee), PPE involved,
accounts affected,
particulars/explanation of the
account affected, and auditor's
remark/observation.
A lease is an agreement whereby the lessor conveys IPSAS 13:8

to the lessee, in return for a payment or series of
payments, the right to use an asset for an agreed
period of time.
(a) finance lease

Yes/ WP
Suggested WP/
A finance lease is a lease that transfers IPSAS 13:8,
substantially all the risks and rewards incidental 13
to ownership of an asset. Title may or may not
eventually be transferred.
(b) operating lease
A lease is classified as an operating lease if it IPSAS 13:13
does not transfer substantially all the risks and
rewards incidental to ownership.
Accounting for finance lease in the lessee's books
2 The NGA lessee recognizes assets acquired under IPSAS 13:28 2. List of PPEs subject to a finance
finance leases as assets and the associated lease COA_C2013 lease where the agency is the lessee
obligations as liabilities using the appropriate -002 (lifted from No. 1) indicating the FV
accounts. of leased PPE, net present value of
minimul lease payments, carrying
amount of the PPE, amount of
obligations recognized in the books,
and auditor's remark/observation.
3. Computation sheet prepared by
management and verified as to
correctness by the Auditor.

Yes/ WP
Suggested WP/
(a) asset
The leased assets account used should follow the COA_
type of asset under lease, such as land, building, C2013-002
machinery, etc. The cost or other appropriate
value of leased assets still in the process of
construction or development should be recorded
as construction-in-progress.
(b) liabilities
The incurrence of liability arising from finance IPSAS 13:31
lease agreements is recorded as finance lease COA_C2013
payable. It is not appropriate for the liabilities -002
for leased assets to be presented in the financial
statements as a deduction from the leased assets.
3 The assets and liabilities are recognized at the IPSAS 13:28 Refer to WP Nos. 2 and 3.
commencement of lease term at amounts equal to the
fair value of the leased property or, if lower, the
present value of the minimum lease payments, each
determined at the inception of the lease.
(a) asset
(b) liabilities

Yes/ WP
Suggested WP/
The commencement of the lease term is the date IPSAS 13:8
from which the lessee is entitled to exercise its
right to use the leased asset. It is the date of initial
recognition of the lease (i.e., the recognition of
the assets, liabilities, revenue, or expenses
resulting from the lease, as appropriate).
The inception of the lease is the earlier of the date IPSAS 13:8
of the lease agreement and the date of
commitment by the parties to the principal
provisions of the lease. As at this date, lease is
classified as either an operating or a finance
lease; and in the case of a finance lease, the
amounts to be recognized at the commencement of
the lease term are determined.
At the commencement of the lease term, the asset IPSAS 13:30

and the liability for the future lease payments are
recognized in the financial statements at the same
amounts, except for any initial direct costs of the
lessee that are added to the amount recognized as
an asset.

Yes/ WP
Suggested WP/
Initial direct costs are often incurred in IPSAS 13:33
connection with specific leasing activities, such as
negotiating and securing leasing arrangements.
The costs identified as directly attributable to
activities performed by the lessee for a finance
lease are added to the amount recognized as an
asset.
Minimum lease payments are the payments over the IPSAS 13:8
lease term that the lessee is, or can be, required to
make, excluding contingent rent, costs for services
and, where appropriate, taxes to be paid by and
reimbursed to the lessor, together with any amounts
guaranteed by the lessee or by a party related to the
lessee.
Contingent rent is that portion of the lease payments IPSAS 13:8

that is not fixed in amount, but is based on the future
amount of a factor that changes other than with the
passage of time (e.g., percentage of future sales,
amount of future use, future price indices, future
market rates of interest).

Yes/ WP
Suggested WP/
4 If, for the presentation of liabilities on the face of the IPSAS 13:32 Refer to the FS.
statement of financial position, a distinction is made
between current and non-current liabilities, the same
distinction is made for lease liabilities.
5 The discount rate to be used in calculating the IPSAS 13:28 Refer to WP Nos. 2 and 3.
present value of the minimum lease payments is the
interest rate implicit in the lease, if this is practicable
to determine; if not, the lessee’s incremental
borrowing rate is used.
The interest rate implicit in the lease is the discount IPSAS 13:8
rate that, at the inception of the lease, causes the
aggregate present value of the minimum lease
payments; and the unguaranteed residual value to be
equal to the sum of the fair value of the leased asset,
and any initial direct costs of the lessor.
Unguaranteed residual value is that portion of the IPSAS 13:8

residual value of the leased asset, the realization of
which by the lessor is not assured or is guaranteed
solely by a party related to the lessor.

Yes/ WP
Suggested WP/
The lessee’s incremental borrowing rate of interest is IPSAS 13:8
the rate of interest the lessee would have to pay on a
similar lease or, if that is not determinable, the rate
that, at the inception of the lease, the lessee would
incur to borrow over a similar term, and with a
similar security, the funds necessary to purchase the
asset.
6 Minimum lease payments is apportioned between the IPSAS 13:34 Refer to WP Nos. 2 and 3.
finance charge and the reduction of the outstanding
liability.
7 The finance charge is allocated to each period during IPSAS 13:34 Refer to WP Nos. 2 and 3.
the lease term to produce a constant periodic rate of
interest on the remaining balance of the liability.
8 Contingent rents are charged as expenses in the IPSAS 13:34 Refer to WP Nos. 2 and 3.
period which they are incurred.
9 The depreciation policy for leased assets is consistent IPSAS 13:36 Refer to WP No. 3 for
with that of the other depreciable assets of the NGA. IPSAS/PPSAS 17 - PPE

Yes/ WP
Suggested WP/
10 If there is no reasonable certainty that the lessee will IPSAS 13:36 Refer to WP No. 3 for
obtain ownership by the end of the lease term, the IPSAS/PPSAS 17 - PPE
asset is fully depreciated over the shorter of the lease
term or its useful life.
11 A finance expense relating to the finance lease is IPSAS 13:36 Refer to No. WP No. 1.
recognized for each accounting period.
The sum of the depreciation expense for the asset and IPSAS 13:38
the finance expense for the period is rarely the same
as the lease payments payable for the period, and it
is therefore inappropriate simply to recognize the
lease payments payable as an expense. Accordingly,
the asset and the related liability are unlikely to be
equal in amount after the commencement of the lease
term.
Disclosures
12 The NGA lessees disclose the following for finance Refer to FS/NFS.
leases:

Yes/ WP
Suggested WP/
(a) For each class of asset, the net carrying amount at
the reporting date;
(b) A reconciliation between the total of future

minimum lease payments at the reporting date, and
their present value;
(c) In addition, the NGA discloses the total of future

minimum lease payments at the reporting date, and
their present value, for each of the following period:
(i) Not later than one year;

(ii) Later than one year and not later than five
years; and
(iii) Later than five years.
(d) Contingent rents recognized as an expense in the

period;
(e) The total of future minimum sublease payments

expected to be received under non-cancelable
subleases at the reporting date; and

Yes/ WP
Suggested WP/
(f) A general description of the lessee’s material
leasing arrangements including, but not limited to,
the following:
(i) The basis on which contingent rent payable is
determined;
(ii) The existence and terms of renewal or purchase
options and escalation clauses; and
(iii) Restrictions imposed by lease arrangements,
such as thoseconcerning return of surplus, return of
capital contributions, dividends or similar
distributions, additional debt, and further leasing.
Accounting for finance lease in the lessor's books

Yes/ WP
Suggested WP/
13 The NGA lessor recognizes finance lease receivable IPSAS 13:48 4. List of PPEs subject to a finance
at an amount equal to the net investment in the lease. lease where the agency is the lessor
(lifted from No. 1) indicating the
type of lessor (manufacturer, trader,
non-manufacturer/ trader), terms of
payment, total amount and cost
breakdown/composition of finance
lease receivable, monthly (or as
dictated by the lease agreement)
lease payments, and
5. Computation sheet for the
amounts indicated in WP No. 4.
14 The lease payments received are treated as finance IPSAS 13:49 Refer to WP No. 1 for
revenue subject to No. 15 below. IPSAS/PPSAS 9 - Revenue from
Exchange Transactions.
15 Except in the case of manufacturer or trader lessor, IPSAS 13:50 Refer to WP No. 4 and 5 and also
the initial direct costs are included in the initial WP No. 1 for IPSAS/PPSAS 9 -
measurement of the finance lease receivable and Revenue from Exchange
reduces the amount of revenue recognized over the Transactions.
lease term.

Yes/ WP
Suggested WP/
Initial direct costs include amounts such as IPSAS 13:50
commissions, legal fees, and internal costs that are
incremental and directly attributable to negotiating
and arranging a lease. They exclude general
overheads, such as those incurred by a sales and
marketing team.
16 Finance revenue is allocated over the lease term IPSAS Refer to WP No. 5 and also WP No.
based on pattern reflecting a constant periodic return 13:51, 52 1 for IPSAS/PPSAS 9 - Revenue
on the lessor's net investment. from Exchange Transactions.
17 Lease payments relating to the accounting period, IPSAS 13:52 Refer to WP No. 5 and also WP No.
excluding costs for services, are applied against the 1 for IPSAS/PPSAS 9 - Revenue
gross investment in the lease to reduce both the from Exchange Transactions.
principal and the unearned finance revenue.
18 The revenue allocation over the lease term is revised IPSAS 13:53 Refer to WP No. 5 and also WP No.
when there is a reduction in the estimated 1 for IPSAS/PPSAS 9 - Revenue
unguaranteed residual value, and any reduction in from Exchange Transactions.
respect of amounts already accrued is recognized
immediately.
Manufacturer or trader finance lessor

Yes/ WP
Suggested WP/
19 In case of manufacturer or trader lessor, costs IPSAS Refer to WP No. 4 and 5 and also
incurred in connection (initial direct costs) with 13:50, 55, 59 WP No. 1 for IPSAS/PPSAS 9 -
negotiating and arranging a lease are excluded from Revenue from Exchange
the initial direct costs and thus are recognized as Transactions.
expense when the gain or loss on sale is recognized.
20 For a manufacturer or trader, revenue from a finance IPSAS 13:56 Refer to WP No. 4 and also WP No.
lease of an asset is taken up as: 1 for IPSAS/PPSAS 9 - Revenue
from Exchange Transactions.
(a) gain or loss; and
(b) finance revenue over the lease term.

The cost of sale of an asset recognized at the IPSAS 13:57
commencement of the lease term is the cost, or
carrying amount if different, of the leased
property, less the present value of the
unguaranteed residual value. The difference
between the sales revenue and the cost of sale is
the gain or loss on sale.

Yes/ WP
Suggested WP/
21 The gain or loss is recognized in accordance with the IPSAS 13:54 Refer to WP Nos. 1 and 3 for
policy followed by the NGA for outright sales. IPSAS/PPSAS 9 - Revenue from
Exchnge Transactions.
22 The sales revenue recognized at the commencement IPSAS 13:57 Refer to WP No. 4 and also WP No.
of the lease term is the fair value of the asset or, if 1 for IPSAS/PPSAS 9 - Revenue
lower, the present value of the minimum lease from Exchange Transactions
payments, computed at a commercial rate of interest. including the documents supporting
the transaction showing computation
of the account recorded.
23 If artificially low rates of interest are quoted, any IPSAS 13:55 Refer to WP No. 1 for
gains or losses on sale of assets are restricted to what IPSAS/PPSAS 9 - Revenue from
would apply if a market rate of interest were charged. Exchange Transactions and the
documents supporting the
transaction showing computation of
the account recorded.

Yes/ WP
Suggested WP/
Manufacturer or trader lessors may sometimes offer IPSAS 13:58
customers lower rates of interest than their normal
lending rates. The use of such a rate would result in
an excessive portion of the total revenue from the
transaction being recognized at the time of sale. If
artificially low rates of interest are quoted, revenue
recognized as gain or loss on sale is restricted to
what would apply if the NGA’s normal lending rate
for that type of transaction were charged.
Disclosures
24 The NGA lessors disclose the following for finance IPSAS 13:60 Refer to FS/NFS.
leases:
(a) A reconciliation between the total gross

investment in the lease at the reporting date, and the
present value of minimum lease payments receivable
at the reporting date. In addition, the NGA discloses
the gross investment in the lease and the present
value of minimum lease payments receivable at the
reporting date, for each of the following periods:

Yes/ WP
Suggested WP/
years; and
(b) Unearned finance revenue;
(c) The unguaranteed residual values accruing to the

benefit of the lessor;
(d) The accumulated allowance for uncollectible

minimum lease payments receivable;
(e) Contingent rents recognized in the statement of

financial performance; and
(f) A general description of the lessor’s material

leasing arrangements.
Accounting for operating lease in the lessee's books

Yes/ WP
Suggested WP/
25 Lease payments under an operating lease is IPSAS 13:42 6. Verified DVs for lease payments,
recognized as an expense on a straight-line basis over with supporting documents showing
the lease term, unless another systematic basis is computations of amounts recorded.
representative of the time pattern of the user’s
benefit.
For operating leases, lease payments (excluding IPSAS 13:43

costs for services such as insurance and
maintenance) are recognized as an expense on a
straight-line basis, unless another systematic basis is
representative of the time pattern of the user’s
benefit, even if the payments are not on that basis.
Disclosures
26 The NGA lessees disclose the following for IPSAS 13:44 Refer to FS/NFS.
operating leases:
(a) The total of future minimum lease payments

under non-cancelableoperating leases for each of the
following periods:
years; and

Yes/ WP
Suggested WP/
(b) The total of future minimum sublease payments

expected to be received under non-cancelable
subleases at the reporting date;
(c) Lease and sublease payments recognized as an

expense in the period, with separate amounts for
minimum lease payments, contingent rents, and
sublease payments; and
(d) A general description of the lessee’s significant

leasing arrangements including, but not limited to,
the following:
(i) The basis on which contingent rent payments
are determined;
(ii) The existence and terms of renewal or
purchase options and escalation clauses; and
(iii) Restrictions imposed by lease arrangements,
such as those concerning return of surplus, return of
capital contributions, dividends or similar
distributions, additional debt, and further leasing.

Yes/ WP
Suggested WP/
Accounting for operating lease in the lessor's books
27 Lease revenue from operating leases is recognized as IPSAS 13:63 Refer to WP No. 1 for
revenue on a straight-line basis over the lease term, IPSAS/PPSAS 9 - Revenue from
unless another systematic basis is more Exchange Transactions.
representative of the time pattern in which benefits
derived from the leased asset is diminished.
Costs, including depreciation, incurred in earning IPSAS 13:64

the lease revenue are recognized as an expense.
Lease revenue (excluding receipts for services
provided, such as insurance and maintenance) is
recognized as revenue on a straight-line basis over
the lease term, even if the receipts are not on such a
basis, unless another systematic basis is more
representative of the time pattern in which use
benefit derived from the leased asset is diminished.
28 Initial direct costs incurred by lessors in negotiating IPSAS 13:65

and arranging an operating lease are added to the
carrying amount of the leased asset, and recognized
as an expense over the lease term on the same basis
as the lease revenue (Refer to PGAM).

Yes/ WP
Suggested WP/
29 The depreciation policy for depreciable leased assets IPSAS 13:66 Refer to WP No. 3 for
is consistent with the depreciation policy for similar IPSAS/PPSAS 17 - PPE
assets not under lease.
Disclosures
30 The NGA discloses the following for operating IPSAS 13:69 Refer to FS/NFS.
leases:
(a) The future minimum lease payments under non-

cancelable operating leases in the aggregate and for
each of the following periods:
years; and
(b) Total contingent rents recognized in the statement

of financial performance in the period; and
(c) A general description of the lessor’s leasing

arrangements.

Yes/ WP
Suggested WP/
31 PPEs subject to operating leases are presented in the IPSAS 13:62
statement of financial position according to the
nature of the asset.

Yes/ WP
Suggested WP/
Sale and Leaseback Transactions
A sale and leaseback transaction involves the sale of IPSAS 13:70
an asset and the leasing back of the same asset. The
lease payment and the sale price are usually
interdependent, because they are negotiated as a
package. The accounting treatment of a sale and
leaseback transaction depends upon the type of lease
involved.
32 If a sale and leaseback transaction results in a finance IPSAS 13:71 Refer to WP Nos 4 and 5.
lease, any excess of sales proceeds over the carrying
amount is deferred revenue amortized over the lease
term.
If the leaseback is a finance lease, the transaction is IPSAS 13:72
a means whereby the lessor provides finance to the
lessee, with the asset as security. For this reason, it
is not appropriate to regard an excess of sales
proceeds over the carrying amount as revenue. Such
excess is deferred and amortized over the lease term.
33 If a sale and leaseback transaction results in an IPSAS 13:73 7. Verified DV/OR pertinent to the
operating lease, and it is clear that the transaction is transaction, or a listing thereof
established at fair value, any gain or loss is indicating the details of the
immediately recognized. transaction.

Yes/ WP
Suggested WP/
If the leaseback is an operating lease, and the lease IPSAS 13:74
payments and the sale price are at fair value, there
has in effect been a normal sale transaction and any
gain or loss is recognized immediately.
34 If a sale and leaseback transaction results in an IPSAS 13:73 Refer to WP No. 7.

operating lease and the sale price is below fair value,
any gain or loss is recognized immediately except
that, if the loss is compensated by future lease
payments at below market price, it is deferred and
amortized in proportion to the lease payments over
the period for which the asset is expected to be used.
35 If a sale and leaseback transaction results in an IPSAS 13:73 Refer to WP No. 7.

operating lease and the sale price is above fair value,
the excess over fair value is deferred and amortized
over the period for which the asset is expected to be
used.

Yes/ WP
Suggested WP/
36 For operating leases, if the fair value at the time of a IPSAS 13:75 Refer to WP No. 7.
sale and leaseback transaction is less than the
carrying amount of the asset, a loss equal to the
amount of the difference between the carrying
amount and fair value is immediately recognized.
37 For finance leases, no such adjustment is made IPSAS 13:76 Refer to WP No. 7.
unless there has been an impairment in value.

Annex 7
IPSAS/PPSAS 14 - Events After the Reporting Date
Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
Recognition and Measurement
1 The NGA adjusts the amounts recognized in the IPSAS Refer to FS and NFS
financial statements to reflect adjusting events after 14:10
the reporting date.
Events after the reporting date are those events, both IPSAS 14:5
favorable and unfavorable, that occur between the
reporting date and the date when the financial
statements are authorized for issue. Those that
provide evidence of conditions that existed at the
reporting date are referred to as adjusting events
after the reporting date.
To determine which events satisfy the definition of PPSAS 14,

events after the reporting date, an agency needs to PAG 2
identify both the reporting date and the date on
which the financial statements are authorized for
issue. For NGAs, the reporting date is set every end
of the calendar year while the date on which the
financial statements are authorized for issue is the
date of approval of the head of the agency or his
authorized representative.
Annex 7, Paage 112 of 231

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
The following are examples of adjusting events after IPSAS
the reporting date: 14:11
(a) settlement after the reporting date of a court case
that confirms that the entity had a present obligation
at the reporting date;
(b) bankruptcy of a debtor that occurs after the
reporting date resulting in impairment of a
receivable;
(c) determination of amount computed from revenue
collected, to be shared with another government
under a revenue-sharing agreement in place during
the reporting period; and
(d) discovery of fraud or errors that show that the

financial statements were incorrect.
2 The NGA does not recognize non-adjusting events IPSAS
after the reporting date in the financial statements. 14:12
Non-adjusting events after the reporting date are IPSAS 14:5
events occurring between the reporting date and the
date when the financial statements are authorized for
issue that are indicative of conditions that arose after
the reporting date.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
An example of non-adjusting events after the IPSAS
reporting date is when an agency charged with 14:13
operating particular community service programs
decides after the reporting date, but before the
financial statements are authorized, to
provide/distribute additional benefits directly or
indirectly to beneficiaries of the programs.
3 The NGA does not prepare its financial statements IPSAS

on a going concern basis if those responsible for the 14:18
preparation of the financial statements or the
governing body determine after the reporting date
either (a) that there is an intention to liquidate the
entity or to cease operating, or (b) that there is no
realistic alternative but to do so.
Factors to consider in assessing whether the going IPSAS

concern assumption is appropriate include the 14:19
current and expected performance of the agency, any
announced and potential restructuring of
organizational units, the likelihood of continued
government funding and, if necessary, potential
sources of replacement funding.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
When the financial statements are not prepared on a IPSAS
going concern basis, the NGA discloses this as well 14:24,
as the basis on which the financial statements have IPSAS 1:38
been prepared and the reason why the NGA is not
considered to be a going concern.(Refer to
IPSAS/PPSAS 1)
Material uncertainties arising after the reporting IPSAS

date regarding the NGA’s ability to continue as a 14:24,
going concern are disclosed where those responsible IPSAS 1:38
for the preparation of the financial statements are
aware, in making their assessment, of such
uncertainties.(Refer to IPSAS/PPSAS 1)
Disclosures
4 If non-adjusting events after the reporting date are IPSAS
material, the NGA discloses the following for each 14:30
material category of non-adjusting event after the
reporting date:
(a) The nature of the event; and
(b) An estimate of its financial effect, or a statement
that such an estimate cannot be made.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
The following are examples of non-adjusting events IPSAS
after the reporting date that would generally result in 14:31
disclosure:
(a) The NGA decides or is instructed by a higher
level of government after the reporting date, to
provide/distribute substantial additional benefits in
the future directly or indirectly to beneficiaries in
community service programs that it operates, and
those additional benefits have a major impact on the
agency;
(b) Announcing a plan to discontinue an operation or

major program, disposing of assets, or settling
liabilities attributable to a discontinued operation or
major program, or entering into binding agreements
to sell such assets or settle such liabilities;
(c) Major purchases and disposals of assets;

(d) The destruction of a major building by a fire after
the reporting date;
(e) Announcing, or commencing the implementation
of a major restructuring;

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(f) The introduction of legislation to forgive loans
made to entities or individuals as part of a program;
and
(g) Abnormally large changes after the reporting
date in asset prices or foreign exchange rates.
Where a restructuring announced after the reporting IPSAS

date meets the definition of a non-adjustable event, 14:25
the appropriate disclosures are made. However,
where a restructuring announced after the reporting
date means that an entity is no longer a going
concern, the nature and amount of assets and
liabilities recognized may change.
5 If the NGA receives information after the reporting IPSAS

date, but before the financial statements are 14:28
authorized for issue, about conditions that existed at
the reporting date, it updates disclosures that relate to
these conditions in the light of the new information.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
One example of the need to update disclosures is IPSAS
when evidence becomes available after the reporting 14:29
date about a contingent liability that existed at the
reporting date. In addition to considering whether it
should now recognize a provision, the agency
updates its disclosures about the contingent liability
in the light of that evidence.
6 IPSAS
The agency discloses the date when the financial 14:26
statements were authorized for issue and who gave
that authorization. If another body has the power to
amend the financial statements after issuance, the
agency discloses that fact.
These information are usually indicated in the
Statement of Management Responsibility for
Financial Statements.

Annex 8
IPSAS/PPSAS 16 - Investment Property
Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
Initial Recognition
1 Items recorded as Investment Property are within IPSAS 16:7 1. List of investment properties
the prescribed definition, i.e., property (land or a COA_C201 indicating the details (type, location,
building – or part of a building – or both) held: 3-002 initial cost, carrying amount,
description, purpose/use), including
auditor's remark/ observation.
(a) to earn rental;

(b) for capital appreciation; or
(c) both

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
Unless held for resale in the ordinary course of IPSAS 16:9
operations, a government property portfolio held
on a commercial basis by a NGA is recorded as
an IP. Where the cash generated from the rentals
or capital appreciation of a property is used by a
NGA to finance its other (service delivery)
activities, the property is an IP. For example,
when a building owned by a SUC is leased out on
a commercial basis to external parties to generate
funds, rather than to produce or supply goods and
services, the building is an IP.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
Investment property generates cash flows largely IPSAS
independently of the other assets held by the NGA. 16:10
For example, part of a building is leased out to
outsiders. However, the building is also used for
the production of goods and services; and the
cash flows are attributable not only to the
building, but also to other assets used in the
production or supply process. Thus, the property
is not an IP.
2 The following are recorded as IP: IPSAS Refer to WP No. 1.

16:12
(a) Land held for long-term capital appreciation
rather than for short-term sale in the ordinary course
of operations;
(b) Land held for a currently undetermined future
use.
(c) A building owned by the NGA (or held by the
NGA under a finance lease) and leased out under one
or more operating leases on a commercial basis;

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(d) A building that is vacant but is held to be leased
out under one or more operating leases on a
commercial basis to external parties; and
(e) Property that is being constructed or developed
for future use as investment property.
3 The following items are recorded as either PPE or IPSAS 16:7 Refer to WP No. 1.
inventory and not as Investment Property: COA_C201 Refer also to WPs for IPSAS/PPSAS
3-002 12 - Inventories and IPSAS/PPSAS
17 - PPE
(a) Property used in the production or supply of
goods or services, or for administrative purposes; or
(b) Property for sale in the ordinary course of

operations.
4 The following are NOT recorded as IP: IPSAS Refer to WP No. 1.
16:13
(a) Property held for sale in the ordinary course of
operations or in the process of construction or
development for such sale;

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
When a portion of a building/property is held to IPSAS
earn rentals or for capital appreciation rather 16:14
than to provide services, and another portion is
held for use in the production or supply of goods
or services or for administrative purposes, the
property is an IP if only an insignificant portion is
held for use in the production or supply of goods
or services or for administrative purposes. If the
portions could be sold separately (or leased out
separately under a finance lease), only that
portion which meets the definition of an IP is
recorded as an IP.
(b) Property being constructed or developed on

behalf of third parties;
(c) Owner-occupied property, including property
held for future use as owner-occupied property,
property held for future development and subsequent
use as owner occupied property, property occupied
by employees and owner-occupied property awaiting
disposal;

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
Owner-occupied property is property held (by the IPSAS 16:7
owner or by the lessee under a finance lease) for
use in the production or supply of goods or
services, or for administrative purposes.
(d) Property that is leased to another agency under a

finance lease;
In some cases, a property is leased to, and IPSAS
occupied by, the controlling entity or another 16:19
controlled entity. The property does not qualify as
IP but rather as a PPE in the consolidated
financial statements because the property is
owner-occupied from the perspective of the
economic entity. However, in the financial
statements of the entity that owns the property, the
property is accounted for as IP.
(e) Property interest that is held by a lessee under an IPSAS 16:8

operating lease;

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
IPSAS allows recognition as IP of property PPSAS 16,
interest held by a lessee under an operating lease PAG 2
if valuation method used is the fair value method.
However, since the fair value model will not be
prescribed for NGAs, the IPSAS policies on such
leased properties will not be adopted.
(f) Property held to provide a social service and

which also generates cash inflows; and
(g) Property held for strategic purposes.
Judgment is needed to determine whether a IPSAS
property qualifies as investment property. The 16:18
NGA develops criteria so that it can exercise that
judgment consistently in accordance with the
definition of investment property, and with the
related above guidance. IPSAS-PPSAS requires
an entity to disclose these criteria when
classification is difficult.
5 Investment property is recognized as an asset when, IPSAS Refer to WP No. 1.

and only when: 16:20

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(a) It is probable that the future economic benefits or
service potential that are associated with the
investment property will flow to the agency; and
(b) The cost or fair value of the investment property
can be measured reliably.
The NGA evaluates all its IP costs at the time the IPSAS
costs are incurred. These costs include costs 16:22-25
incurred initially to acquire an investment
property, and costs incurred subsequently to add
to, replace part of, or service a property. The cost
of replacing part of an existing IP is recognized at
the time that cost is incurred and the carrying
amount of those parts that are replaced is
derecognized in accordance with the
derecognition provisions of IPSAS-PPSAS. The
costs of the day-to-day servicing are not included.
Rather, these costs are recognized in surplus or
deficit as incurred. In cases where an IP is
acquired at no cost or for a nominal cost, the cost
is the IP’s fair value as at the date of acquisition.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
Measurement at Recognition
6 Investment property is measured initially at its cost. IPSAS 2. Computation sheet supporting
16:26 WP No. 1.
The cost of a purchased investment property IPSAS
comprises its purchase price and any directly 16:28
attributable expenditure. Directly attributable
expenditure includes, for example, professional fees
for legal services, property transfer taxes, and other
transaction costs.
The cost of investment property is not increased by IPSAS

(a) Start-up costs (unless they are necessary to bring 16:30
the property to the condition necessary for it to be
capable of operating in the manner intended by
management); (b) Operating losses incurred before
the investment property achieves the planned level of
occupancy; or (c) Abnormal amounts of wasted
material, labor or other resources incurred in
constructing or developing the property.
7 Where an investment property is acquired through a IPSAS Refer to WP No. 2.

non-exchange transaction, its cost is measured at its 16:27
fair value as at the date of acquisition.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
Where an IP is recognized using the fair value in IPSAS
accordance with IPSAS-PPSAS, the fair value is the 16:33
cost of the property.
8 If payment for IP is deferred, its cost is the cash price IPSAS Refer to WP No. 2.
equivalent. 16:31
9 The difference between cash price equivalent and the IPSAS Refer to WP No. 2.
total payments is recognized as interest expense over 16:31 Refer also to WP for IPSAS/PPSAS
the period of credit. 17 - PPE.
One or more IPs may be acquired in exchange for a IPSAS
nonmonetary asset or assets, or a combination of 16:36
monetary and non-monetary assets. The cost of such
an IP is measured at fair value unless (a) the
exchange transaction lacks commercial substance or
(b) the fair value of neither the asset received nor the
asset given up is reliably measurable. The acquired
asset is measured in this way even if the NGA cannot
immediately derecognize the asset given up. If the
acquired asset is not measured at fair value, its cost
is measured at the carrying amount of the asset given
up.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
An exchange transaction has commercial substance IPSAS
if: (a) The configuration (risk, timing, and amount) 16:37
of the cash flows or service potential of the asset
received differs from the configuration of the cash
flows or service potential of the asset transferred; or
(b) The entity-specific value of the portion of the
entity’s operations affected by the transaction
changes as a result of the exchange; and (c) The
difference in (a) or (b) is significant relative to the
fair value of the assets exchanged.

10 The NGA uses the cost model for all its IPs. IPSAS Refer to WP No. 2.
16:39
IPSAS allows an option to choose between the fair PPSAS 16,
value model and the cost model as accounting PAG 2
policies applicable to IPs. However, for NGAs, only
the cost model is prescribed. Thus, paragraphs that
provide the accounting policies on the use of the fair
value model are not adopted.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
11 After initial recognition, the NGA measures all of its IPSAS Refer to WP Nos. 1 and 2.
IPs at cost less any accumulated depreciation and any 16:65
accumulated impairment losses.
12 Transfers to or from investment property is made IPSAS 3. Verfied JEV and entries in the
when, and only when, there is a change in use. 16:66 General Journal pertaining to the
transfers referrred to here
This is evidenced by (a) Commencement of owner-
occupation, for a transfer from investment property
to owner-occupied property; (b) Commencement of
development with a view to sale, for a transfer from
investment property to inventories; (c) End of owner-
occupation, for a transfer from owner-occupied
property to investment property; or (d)
Commencement of an operating lease (on a
commercial basis) to another party, for a transfer
from inventories to investment property.
13 An investment property is derecognized on disposal IPSAS Refer to WP No. 3.

or when the investment property is permanently 16:77
withdrawn from use and no future economic benefits
or service potential are expected from its disposal.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
14 Gains or losses arising from the retirement or IPSAS 4. Verified supporting documents to
disposal of IP is determined as the difference 16:80 WP No. 3.
between the net disposal proceeds and the carrying
amount of the asset, and is recognized in surplus or
deficit (unless IPSAS 13 requires otherwise on a sale
and leaseback) in the period of the retirement or
disposal.
15 The consideration receivable on disposal of an IPSAS Refer to WP No. 4.

investment property is recognized initially at fair 16:81
value.
If payment for an IP is deferred, the consideration IPSAS
received is recognized initially at the cash price 16:81
equivalent. The difference between the nominal
amount of the consideration and the cash price
equivalent is recognized as interest revenue in
accordance with IPSAS 9, using the effective interest
method.
Disclosures
16 The NGA discloses: IPSAS Refer to FS/NFS.
16:86
(a) The fact that it applies the cost model;

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(b) When classification is difficult, the criteria it uses
to distinguish investment property from owner-
occupied property and from property held for sale in
the ordinary course of operations;
(c) The amounts recognized in surplus or deficit for:
(i) Rental revenue from investment property;
(ii) Direct operating expenses (including repairs
and maintenance) arising from investment
property that generated rental revenue during the
period; and
(iii) Direct operating expenses (including repairs
and maintenance) arising from investment
property that did not generate rental revenue
during the period.
(d) The existence and amounts of restrictions on the
realizability of investment property or the remittance
of revenue and proceeds of disposal; and
(e) Contractual obligations to purchase, construct, or
develop investment property or for repairs,
maintenance, or enhancements.
17 In addition, the NGA also discloses: IPSAS
16:90
(a) The depreciation methods used;

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(b) The useful lives or the depreciation rates used;
(c) The gross carrying amount and the accumulated
depreciation (aggregated with accumulated
impairment losses) at the beginning and end of the
period;
(d) The reconciliation of the carrying amount of
investment property at the beginning and end of the
period, showing the following:
(i) Additions, disclosing separately those
additions resulting from acquisitions and those
resulting from subsequent expenditure recognized
as an asset;
(ii) Additions resulting from acquisitions through
entity combinations;
(iii) Disposals;
(iv) Depreciation;
(v) The amount of impairment losses recognized,
and the amount of impairment losses reversed,
during the period in accordance with IPSAS 21 or
IPSAS 26, as appropriate;

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(vi) The net exchange differences arising on the
translation of the financial statements into a
different presentation currency, and on translation
of a foreign operation into the presentation
currency of the reporting agency;
(vii) Transfers to and from inventories and owner-

occupied property; and
(viii) Other changes; and
(e) The fair value of investment property. In the
exceptional cases described in paragraph 62, when
the NGA cannot determine the fair value of the
investment property reliably, the entity discloses:
(i) A description of the investment property;
(ii) An explanation of why fair value cannot be
determined reliably; and
(iii) If possible, the range of estimates within
which fair value is highly likely to lie.

Annex 9
IPSAS/PPSAS 17 - Property, Plant and Equipment
Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
Recognition of asset
1 Items recorded as PPE are within the definition of IPSAS 1. List of PPE items showing
PPE, i.e., tangible assets purchased or constructed 17:13 account classification, purpose
that are: COA_ (production, rental, administrative,
C2013-002 etc. ), use (cash/non-cash-
generating), life, cost and auditor's
remark/ observation.
(a) held for use in the production or supply of goods

or services, for rental to others, or for administrative
purposes; and
(b) expected to be used during more than one
reporting period.
Major spare parts and servicing equipment IPSAS
qualify as PPE when they are expected to be used 17:17
during more than one period or when they can be
used only in connection with an item of PPE.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
2 PPE is recorded in the books if, and only if It is IPSAS Refer to WP No. 1.
probable that future economic benefits or service 17:14
potential associated with the item will flow to the
NGA; and the cost or fair value of the item can be
measured reliably.
Items of PPE that may not directly provide future IPSAS

economic benefits or service potential but is 17:12
necessary to obtain future economic benefits or
service potential from other assets are recognized as
PPE because they enable the NGA to derive future
economic benefits or service potential from related
assets in excess of what could be derived had those
items not been acquired. For example, fire safety
regulations may require a hospital to retro-fit new
sprinkler systems. These enhancements are
recognized as an asset because, without them, the
agency is unable to operate the hospital in
accordance with the regulations.
3 Infrastructure assets that meet the recognition criteria Refer to WP No. 1.

are accounted for in the books of the NGA.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
Infrasture assets display some or all of the following IPSAS

characteristics: (a) They are part of a system or 17:21
network; (b) They are specialized in nature and do
not have alternative uses; (c) They are immovable;
and (d) They may be subject to constraints on
disposal.
4 An item of property, plant, and equipment that IPSAS 2. validated JEV with supporting
qualifies for recognition as an asset is measured at its 17:26, 30 documents showing computation of
cost, which includes: recorded cost
(a) The purchase price, including import duties and

non-refundable purchase taxes, after deducting trade
discounts and rebates.
(b) Any costs directly attributable to bringing the

asset to the location and condition necessary for it to
be capable of operating in the manner intended by
management.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
Examples of directly attributable costs are: costs IPSAS

of site preparation; initial delivery and handling 17:26, 31
costs; installation and assembly costs; costs of
testing whether the asset is functioning properly;
and professional fees.
(c) The initial estimate of the costs of dismantling

and removing the item and restoring the site on
which it is located, the obligation for which an
agency incurs either when the item is acquired, or as
a consequence of having used the item during a
particular period for purposes other than to produce
inventories during that period.
5 Where an asset is acquired through a non-exchange IPSAS Refer to WP No. 2.

transaction, its cost is measured at its fair value as at 17:27
the date of acquisition.
6 When an asset is acquired in exchange of another IPSAS Refer to WP No. 2.

asset, its cost is measured at the fair value of the asset 17:39
given up.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
7 When an asset is acquired in exchange of another IPSAS Refer to WP No. 2.

asset but (a) the exchange transaction lacks 17:39
commercial substance, or (b) the fair value of neither
the asset received nor the asset given up is reliably
measurable, its cost is measured at the carrying
amount of the asset given up.
8 If payment is deferred beyond normal credit terms, IPSAS Refer to WP Nos. 1 and 2.
the difference between the cash price equivalent and 17:37
the total payment is recognized as interest over the
period of credit.
IPSAS 17 allows an exception in cases where such IPSAS
interest is recognized in the carrying amount of the 17:37
item in accordance with the allowed alternative PPSAS 5,
treatment in IPSAS 5. However, PPSAS 5, PAG 2 PAG 2
does not allow the use of the alternative treatment by
NGAs.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number

9 The PPE is carried at its cost, less any accumulated IPSAS 3. Schedule of PPE or Validated
depreciation and any accumulated impairment losses. 17:43 PPE ledger cards/similar accounting
records, showing initial cost,
additions, reductions, depreciation,
accumulated depreciation and
explanations/computations for the
entries made.
For consistency and uniformity, the cost model is PPSAS 17,

adopted for all classes of PPE. Thus, paragraphs 44 PAG 2
to 58 and IG 1 to 4 of IPSAS 17 regarding
revaluation is not adopted.
10 Depreciation is computed for one month if the PPE is PPSAS 17, Refer to WP No. 3.
available for use on or before the 15th of the month. PAG 3
Depreciation is for the succeeding month if the PPE
is available for use after the 15th of the month.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
Depreciation of an asset begins when it is available IPSAS

for use, i.e., when it is in the location and condition 17:71
necessary for it to be capable of operating in the PPSAS 17,
manner intended by management. Depreciation of an PAG 3
asset ceases when the asset is derecognized.
Therefore, depreciation does not cease when the
asset becomes idle or is retired from active use and
held for disposal unless the asset is fully depreciated.
11 Each part of an item of PPE with a cost that is IPSAS Refer to WP No. 3.
significant in relation to the total cost of the item is 17:59
depreciated separately.
For example, the NGA would be required to IPSAS
depreciate separately the pavements, formation, 17:60, 61
curbs and channels, footpaths, bridges, and lighting
within a road system. Items having the same useful
life and using the same depreciation method may be
grouped in determining the depreciation charge.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
To the extent that the NGA depreciates separately IPSAS

some parts of an item of PPE, it also depreciates 17:62, 63
separately the remainder of the item. It may choose
to depreciate separately the parts of an item that do
not have a cost that is significant in relation to the
total cost of the item.
12 The depreciation charge for each period is IPSAS 4. validated JEV with supporting
recognized in surplus or deficit, unless it is included 17:64 documents showing computations
in the carrying amount of another asset. made.
For example, the depreciation of manufacturing IPSAS
plant and equipment may be included in the costs of 17:65
conversion of inventories (see IPSAS 12) or
depreciation of PPE used for development activities
may be included in the cost of an intangible asset
(see IPSAS 31).
13 The depreciable amount of the PPE is allocated on a IPSAS Refer to WP No. 3.

systematic basis over its useful life. 17:66
Depreciable amount is the cost of an asset, or other IPSAS
amount substituted for cost, less its residual value. 17:13, 69

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
The estimation of the useful life of the asset is a PPSAS 17,

matter of judgment based on the experience of the PAG 5
agency with similar assets. However, the agency
shall use the Schedule on the Estimated Useful Life
of PPE by classification prepared by COA.
Repair and maintenance of an asset does not negate IPSAS

the need to depreciate it. However, if agency 17:13, 68
policies contribute to the PPE’s wear and tear, such
as delaying repair due to budgetary constraints, the
PPE’s useful life should be reassessed and adjusted
accordingly.
14 A residual value equivalent to at least five percent PPSAS 17, Refer to WP No. 3.
(5%) of the cost is adopted unless a more appropriate PAG 6
percentage is determined by the agency based on
their operation.
15 If the 5% rule is not applied, the residual value and IPSAS Refer to WP No. 3.
the useful life of an asset is reviewed at least at each 17:67
annual reporting date.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
16 If after review, the residual value and the useful life IPSAS Refer to WP No. 3.
of PPE differ from previous estimates, the change(s) 17:67
is accounted for as a change in an accounting
estimate.
17 The straight line method of depreciation is adopted PPSAS 17, Refer to WP No. 3.
unless another method is more appropriate for PAG 4
agency operation.
Derecognition
18 The carrying amount of an item of PPE is IPSAS Refer to WP No. 3.
derecognized: 17:82
(a) On disposal; or
The disposal of PPE may occur by sale, donation,

or through a finance lease (refer to Checklist on
Leases).
(b) When no future economic benefits or service
potential is expected from its use or disposal.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
However, an eagency that, in the course of its

ordinary activities, routinely sells items of PPE
that it has held for rental to others shall transfer
such assets to inventories at their carrying
amount when they cease to be rented and become
held for sale. The proceeds from the sale of such
assets shall be recognized as revenue.
19 The gain or loss arising from the derecognition of IPSAS 5. Validated JEV taking up the
PPE through disposal by sale is the difference 17:82,86 transaction with supporting
between the net disposal proceeds, if any, and the documents.
carrying amount of the item. Refer also to WP No. 3.
20 If payment for the item is deferred, the consideration IPSAS Refer to WP No. 3 and 5.
received is recognized initially at the cash price 17:87
equivalent. The difference between the nominal
amount of the consideration and the cash price
equivalent is recognized as interest revenue.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
21 The loss on assets arising from derecognition through IPSAS Refer to WP No. 3 and 5.
disposal by destruction is the difference among the 17:82, 86
cost, accumulated depreciation and impairment
losses.
22 The cost/expense arising from derecognition through IPSAS Refer to WP No. 3 and 5.
disposal by donation is the difference among the 17:82, 86
cost, accumulated depreciation and impairment
losses.
23 If the cost of a replacement of an item of PPE is IPSAS Refer to WP No. 3 and 5.

included in the carrying amount of the PPE, the NGA 17:85
derecognizes the carrying amount of the replaced
part regardless of whether the replaced part had been
depreciated separately.
If it is not practicable for the NGA to determine the

carrying amount of the replaced part, it may use the
cost of the replacement as an indication of what the
cost of the replaced part was at the time it was
acquired or constructed.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
Disclosures
24 The financial statements disclose, for each class of IPSAS Refer to the FS/NFS.
PPE recognized in the financial statements: 17:88
(a) The measurement bases used for determining the

gross carrying amount;
(b) The depreciation methods used;
(c) The useful lives or the depreciation rates used;
(d) The gross carrying amount and the accumulated

period; and
(e) A reconciliation of the carrying amount at the

beginning and end of the period showing:
(i) Additions;
(ii) Disposals;
(iii) Acquisitions through entity combinations;

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(iv) Impairment losses recognized in surplus or

deficit in accordance with IPSAS 21 or IPSAS 26,
as appropriate;
(v) Impairment losses reversed in surplus or
deficit in accordance with IPSAS 21 or IPSAS 26,
as appropriate;
(vi) Depreciation;
(vii) The net exchange differences arising on the
translation of the financial statements from the
functional currency into a different presentation
currency, including the translation of a foreign
operation into the presentation currency of the
reporting agency; and
(viii) Other changes.
25 The financial statements also disclose for each class IPSAS

of PPE recognized in the financial statements: 17:89
(a) The existence and amounts of restrictions on title,

and property, plant, and equipment pledged as
securities for liabilities;

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(b) The amount of expenditures recognized in the

carrying amount of an item of property, plant, and
equipment in the course of its construction;
(c) The amount of contractual commitments for the

acquisition of property, plant, and equipment;
(d) If it is not disclosed separately on the face of the

statement of financial performance, the amount of
compensation from third parties for items of
property, plant, and equipment that were impaired,
lost or given up that is included in surplus or deficit;
(e) whether depreciation is recognized in surplus or IPSAS

deficit or as a part of the cost of other assets, during a 17:90
period;
(f) nature and effect of a change in the estimated IPSAS
costs of dismantling, removing, or restoring PPE that 17:91
has an effect in the current period or is expected to
have an effect in subsequent periods; and

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(g) information on impaired PPE. IPSAS

17:93
26 Users of financial statements may also find the IPSAS
following information relevant to their needs: 17:94
(a) The carrying amount of temporarily idle property,

plant, and equipment;
(b) The gross carrying amount of any fully

depreciated property, plant, and equipment that is
still in use;
(c) The carrying amount of property, plant, and

equipment retired from active use and held for
disposal; and
(d) When the cost model is used, the fair value of

property, plant, and equipment when this is
materially different from the carrying amount.

Annex 10
IPSAS/PPSAS 21 - Impairment of Non-Cash Generating Assets
Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
Non-Cash Generating Assets
1 The NGA correctly identifies its non-cash generating IPSAS 21:14 Refer to WP No. 1 for
assets, i.e., assets not primarily intended to generate IPSAS/PPSAS 17 - PPE.
commercial returns but rather used for
production/supply of goods/services or for
administrative purpose.
An asset may be a non-cash-generating asset even IPSAS 21:16

though it may be breaking even or generating a
commercial return during a particular reporting
period.
2 In identifying its non-cash generating assets, the IPSAS 21:20 1. Written documentation of policy.
NGA develops criteria so that it can exercise
definition of cash-generating assets and non-cash
generating assets.
3 In cases where it is not clear whether the primary IPSAS 21:20 Refer to WP No. 1.
objective of holding an asset is to generate a
commercial return, the NGA evaluates the
significance of the cash flows in accordance with the
criteria developed by the NGA for the purpose.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
In some cases, it may not be clear whether the IPSAS 21:20
primary objective of holding an asset is to generate a
commercial return. Judgement is needed to
determine whether the extent to which the asset
generates cash flows is so significant that IPSAS 21
applies rather than IPSAS 26. Thus, the NGA needs
to develop criteria so that it can exercise that
judgement. However, given the overall objectives of
most public sector entities, other than GBEs, the
presumption is that assets are non-cash-generating
and, therefore, IPSAS 21 will apply.
Recognition and Measurement of Impairment

4 An impairment is recognized in surplus or deficit in IPSAS 21:54 2. JEV taking up the specific
accordance with the definition of impairment losses. COA_C2013 transaction with supporting
-002 documents.
5 At each reporting date, the NGA estimates the 3. Computation sheet for
recoverable service amount of the asset when there is impairment testing.
indication that:
(a) an asset is impaired; or IPSAS 21:26

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(b) the impairment loss recognized in prior periods IPSAS 21:59
no longer exist or have decreased.
In assessing whether there is any indication that
an asset may be impaired, refer to Paragraph 27
to 34 of IPSAS 21.
In assessing whether there is any indication of a
reversal of impairment loss, refer to Paragaraph
60-63, IPSAS 21.
A redesignation of assets from cash-generating IPSAS 21:71
assets to non-cash-generating assets or from non-
cash-generating assets to cash-generating does
not necessarily trigger an impairment test or a
reversal of an impairment loss.
6 Irrespective of whether there is any indication of IPSAS Refer to WP No. 3.

impairment, the NGA also tests annually, an 21:26A
intangible asset with an indefinite useful life or an
intangible asset not yet available for use for
impairment.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
This is done by comparing the carrying amount of IPSAS
the PPE with its recoverable service amount. This 21:26A
impairment test may be performed at any time during
the reporting period, provided it is performed at the
same time every year.
Different intangible assets may be tested for IPSAS

impairment at different times. However, if such an 21:26A
intangible asset was initially recognized during the
current reporting period, that intangible asset is
tested for impairment before the end of the current
reporting period.
In the annual testing, the most recent detailed

calculation of recoverable service amount made in a
preceding period may be used in the impairment test
for that asset in the current period, provided certain
criteria are met. (Refer to Paragraph 39A of IPSAS
21)
7 Recoverable service amount as determined by the IPSAS Refer to WP No. 3.

NGA is the higher of a non-cash-generating asset’s 21:14, 35
fair value less costs to sell and its value in use.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
8 The PPE’s fair value less costs to sell is: Refer to WP No. 3.
(a) in a binding sale agreement – the sale price
(b) in an active market – market price less cost of

disposal
The binding sale agreement should be in an arm’s IPSAS 21:40
length transaction with the sale price, adjusted for
incremental costs that would be directly
attributable to the disposal of the asset.
If there is no binding sale agreement, the market IPSAS 21:41

price less cost of disposal of the PPE traded in an
active market, may be used. This is usually the
current bid price. When this is not available, the
price of the most recent transaction may be used,
provided that there has not been a significant
change in economic circumstances between the
transaction date and the date as at which the
estimate is made.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
If there is no binding sale agreement or active IPSAS 21:42
market for an asset, fair value less costs to sell is
based on the best information available to reflect
the amount that the NGA could obtain, at
reporting date, from the disposal of the asset in an
arm’s length transaction between knowledgeable,
willing parties, after deducting the costs of
disposal.
9 The value in use of the non-cash-generating asset as IPSAS Refer to WP No. 3.

determined by the NGA is the present value of the 21:14, 44
asset’s remaining service potential.
Assets that are used to deliver goods and services in IPSAS 1:11
accordance with the NGA’s objectives, but which do
not directly generate net cash inflows, are often
described as embodying service potential.
The present value of the remaining service potential

of the asset is determined using:

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(a) Depreciated Replacement Cost Approach - IPSAS 21:45
measured as the reproduction or replacement cost of
the asset, whichever is lower, less accumulated
depreciation calculated on the basis of such cost, to
reflect the already consumed or expired service
potential of the asset.
(b) Restoration Cost Approach - determined by IPSAS 21:48

subtracting the estimated restoration cost of the asset
from the current cost of replacing the remaining
service potential of the asset before impairment. The
latter cost is usually determined as the depreciated
reproduction or replacement cost of the asset,
whichever is lower.
(c) Service Units Approach - determined by IPSAS 21:49

reducing the current cost of the remaining service
potential of the asset before impairment to conform
to the reduced number of service units expected from
the asset in its impaired state.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
The choice of the most appropriate approach to IPSAS 21:50
measuring value in use depends on the availability of
data and the nature of the impairment. Refer also to
IPSAS 21, Paragraphs 45 to 50.
10 Impairment loss is recognized if the recoverable IPSAS 21:52 Refer to WP Nos. 2 and 3.
service amount is less than its carrying amount.
11 In recording impairment loss, the carrying amount of IPSAS 21:52 Refer to WP Nos. 2 and 3.
the asset is reduced to its recoverable service amount.
12 After the recognition of an impairment loss, the IPSAS 21:57 Refer to WP No. 3 for
depreciation (amortization) charge for the asset is IPSAS/PPSAS 17 - PPE.
adjusted in future periods to allocate the asset’s
revised carrying amount, less its residual value (if
any), on a systematic basis over its remaining useful
life.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
13 A reversal of impairment loss is recognized if there is IPSAS 21:65 Refer to WP No. 2 and 3.
a change in the estimates used to determine the
asset’s recoverable service amount since the last
impairment loss was recognized.
Examples of change in estimates include change in IPSAS 21:67
the basis for recoverable service amount (i.e.,
whether recoverable service amount is based on fair
value less costs to sell or value in use) and changes
in the components of said bases.
14 In recording reversal of impairment loss, the carrying IPSAS 21:65 Refer to WP No. 2 and 3.
amount of the asset is increased to its recoverable
service amount.
15 The increased carrying amount of an asset IPSAS 21:68 Refer to WP No. 2 and 3.
attributable to a reversal of an impairment loss does
not exceed the carrying amount that would have been
determined (net of depreciation or amortization) if no
impairment loss was recognized for the asset in prior
periods.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
16 After a reversal of an impairment loss is recognized, IPSAS 21:70 Refer to WP No. 3 for
the depreciation (amortization) charge for the asset is IPSAS/PPSAS 17 - PPE.
life.
Disclosures
17 The NGA discloses the criteria developed to IPSAS 21:72 Refer to FS/NFS.
distinguish non-cash-generating assets from cash-
generating assets.
18 The NGA discloses, among others, the following for IPSAS 21:73
each class of assets:
(a) The amount of impairment losses recognized in

surplus or deficit during the period, and the line
item(s) of the statement of financial performance in
which those impairment losses are included; and

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(b) The amount of reversals of impairment losses
recognized in surplus or deficit during the period,
and the line item(s) of the statement of financial
performance in which those impairment losses are
reversed.
19 If the NGA reports segment information in IPSAS 21:76

accordance with IPSAS 18, Segment Reporting, the
following are disclosed for each segment reported by
the NGA:
surplus or deficit during the period; and

recognized in surplus or deficit during the period.
20 The NGA discloses the following for each material IPSAS 21:77
impairment loss recognized or reversed during the
period:
(a) The events and circumstances that led to the

recognition or reversal of the impairment loss;

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(b) The amount of the impairment loss recognized or
reversed;
(c) The nature of the asset;
(d) The segment to which the asset belongs, if the

NGA reports segment information in accordance
with IPSAS 18;
(e) Whether the recoverable service amount of the

asset is its fair value less costs to sell or its value in
use;
(f) If the recoverable service amount is fair value less

costs to sell, the basis used to determine fair value
less costs to sell (such as whether fair value was
determined by reference to an active market); and
(g) If the recoverable service amount is value in use,

the approach used to determine value in use.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
21 The NGA discloses the following information for the IPSAS 21:78
aggregate of impairment losses and aggregate
reversals of impairment losses recognized during the
period for which no information is disclosed in
accordance with paragraph 77.
(a) The main classes of assets affected by impairment

losses (and the main classes of assets affected by
reversals of impairment losses); and
(b) The main events and circumstances that led to the

recognition of these impairment losses and reversals
of impairment losses.

Annex 11
IPSAS/PPSAS 23 - Revenue from Non-Exchange Transactions
Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
Recognition of Assets/Revenue
1 Taxes and transfers received or receivable by the IPSAS 1. List of non-exchange transactions
NGA are recorded in accordance with the definition 23:5,7 with details of collection (OR
of revenues from non-exchange transactions. COA_C201 number, date and amount),
3-002 breakdown of the amount (principal,
interest, penalty), nature of
collection/transaction, period to
which the payment will be applied,
reference/details in case receipt is
installment/partial, date transaction
was recorded in the books, accounts
used/recorded with the
corresponding amount, and auditor's
remark/observation.
Non-exchange transactions are transactions where IPSAS 9:11

the NGA either receives value from another agency
without directly giving approximately equal value in
exchange, or gives value to another agency without
directly receiving approximately equal value in
exchange.
(a) Taxes

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(b) Transfers
Transfers (whether cash or noncash) include IPSAS 23:5,
grants, debt forgiveness, fines, bequests, gifts, 77
donations, goods and services inkind, the off- COA_C201
market portion of concessionary loans received 3-002
and shares of government agencies from NG and
GOCCs including PAGCOR and PCSO. These
are recorded under subsidy, share, assistance,
grants and donation income accounts.
2 Inflows of resources in respect of the revenue from a IPSAS Refer to WP No. 1.

non-exchange transaction, other than services in- 23:31
kind, are recorded as assets.
An asset received from a non-exchange transaction is IPSAS
recognized when and only when: (a) It is probable 23:31
that the future economic benefits or service potential
associated with the asset will flow to the NGA; and
(b) The fair value of the asset can be measured
reliably.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
3 Services in-kind are not recorded in the books but IPSAS Refer to FS/NFS and WP No. 1.
disclosed by way of NFS. 23:98, 108
PPSAS 23,
PAG 3
PPSAS 23, PAG 3 requires disclosure in accordance
with paragraph 108, which requires disclosure of
"the nature and type of major classes of services in-
kind received". The extent to which an entity is
dependent on a class of services in-kind will
determine the disclosures it makes in respect of that
class.
4 Assets in respect of taxes (including the related fines PPSAS 23, 2. JEV/s taking up the specific
and penalties) are recognized when collected or when PAG 2 transaction with supporting
measurable and legally collectible, irrespective of the documents.
taxable event. The related refunds, including those Refer also to WP No. 1.
that are measurable and legally collectible, are
deducted from the recognized tax revenue.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
The taxable event is the event that the government, IPSAS 23:7,
legislature, or other authority has determined to be 65
subject to taxation. While the NIRC and supporting
RMCs prescribe the taxable events, generally, the
taxable event for income tax is the earning of
assessable income during the taxation period; for
goods and services tax, it is the purchase or sale of
taxable goods and services; for customs duty, it is the
movement of dutiable goods or services across the
customs boundary, etc.
The recording of revenue when the taxable event

occurs is in accordance with accrual basis of
accounting. However, the difficulty of measuring the
revenue to be recorded at such point is apparent, and
thus, an exception is made on the recording of tax
revenues.
5 Resources for taxes received prior to the occurrence IPSAS 23:7, Refer to WP Nos. 1 and 2.
of the taxable event (advance receipts) are 66
recognized as an asset and a liability.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
Advance receipts in respect of taxes are not IPSAS 23:7,
fundamentally different from other advance receipts, 66
so a liability is recognized until the taxable event
occurs. When the taxable event occurs, the liability is
discharged and revenue is recognized.
6 Asset in respect of transfers is recognized when the IPSAS Refer to WP Nos. 1 and 2.
transferred resources (including bequests, gifts, 23:76, 91,
donations) meet the definition of an asset and satisfy 95
the criteria for recognition as an asset.
Transfers satisfy the definition of an asset when the IPSAS
NGA controls the resources as a result of a past 23:78, 91,
event (the transfer), and expects to receive future 96
economic benefits or service potential from those
resources. Transfers (except services-in-kind in case
of gifts and donations) satisfy the criteria for
recognition as an asset when it is probable that the
inflow of resources will occur, and their fair value
can be reliably measured.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
In certain circumstances, such as when a creditor IPSAS
forgives a liability, a decrease in the carrying 23:29
amount of a previously recognized liability may
arise. In these cases, instead of recognizing an asset
as a result of the transfer, the NGA decreases the
carrying amount of the liability.
Pledges are unenforceable undertakings to transfer IPSAS

assets to the recipient. These do not meet the 23:104
definition of an asset, and therefore are not
recognized as assets or revenue because the recipient
is unable to control the access of the transferor to the
future economic benefits or service potential
embodied in the item pledged.
7 Resources received before a transfer arrangement IPSAS Refer to WP Nos. 1 and 2.

becomes binding are recognized as assets when they 23:105
meet the definition of an asset and satisfy the criteria
for recognition as an asset; and as liability.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
Advance receipts in respect of transfers are not IPSAS
fundamentally different from other advance receipts, 23:105
so a liability is recognized until the event that makes
the transfer arrangement binding occurs, and all
other conditions under the agreement are fulfilled.
When that event occurs and all other conditions
under the agreement are fulfilled, the liability is
discharged and revenue is recognized.
8 Inflows of resources from a non-exchange IPSAS Refer to WP Nos. 1 and 2.

transaction recognized as an asset is recognized as 23:44
revenue, except to the extent that a liability is also
recognized in respect of the same inflow.
9 As the liability is satisfied, the carrying amount of IPSAS Refer to WP Nos. 1 and 2.
the liability is reduced and revenue is recognized in 23:45
an amount equal to the reduction.
10 Conditions imposed on transfer of assets are recorded IPSAS Refer to WP Nos. 1 and 2.
as liability in respect of the transfer on initial 23:17
recognition of the asset.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
Terms imposed on the use of transferred assets are IPSAS
either conditions or restrictions. While both require 23:14, 15,
the NGA to use or consume the future economic 17
benefits or service potential embodied in an asset for
a particular purpose (performance obligation) on
initial recognition, only conditions require that
future economic benefits or service potential be
returned to the transferor in the event that the
stipulation is breached (return obligation). Because
the recipient is unable to avoid the outflow of
resources, as it is required to consume the future
economic benefits or service potential embodied in
the transferred asset in the delivery of particular
goods or services to third parties, or else to return to
the transferor future economic benefits or service
potential, the recipient initially recognizes an asset
and at the same time also incurs a liability. The part
not subject to a condition and thus, not a liability is a
revenue.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
Measurement of Assets/Revenue
11 Revenue from non-exchange transactions is IPSAS Refer to WP Nos. 1 and 2.
measured at the amount of the increase in net assets 23:48
recognized by the NGA.
12 An asset acquired through a non-exchange IPSAS Refer to WP Nos. 1 and 2.
transaction is initially measured at its fair value as at 23:42
the date of acquisition.
13 Assets arising from taxation transactions are IPSAS Refer to WP Nos. 1 and 2.
measured at the best estimate of the inflow of 23:67, 89
resources to the NGA.
IPSAS requires that assets arising from taxation IPSAS
transactions be measured at their fair value as at the 23:67
date of acquisition. Thus, accounting policies should
conform with this requirement and take into account
both the probability that the resources arising from
taxation transactions will flow to the government,
and the fair value of the resultant assets.
14 Transferred assets are measured at their fair value as IPSAS Refer to WP Nos. 1 and 2.
at the date of acquisition. 23:83, 92,
97

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
Inventories, property, plant, equipment, investment IPSAS
property, financial instruments, including cash and 23:83
transfers receivable that satisfy the definition of a
financial instrument, and other assets acquired
through non-exchange transactions are to be initially
measured at their fair value as at the date of
acquisition.
15 The amount recognized as a liability is the best IPSAS Refer to WP Nos. 1 and 2.
estimate of the amount required to settle the present 23:57
obligation at the reporting date.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
When, as a result of a non-exchange transaction, the IPSAS
NGA recognizes an asset, it also recognizes revenue 23:49, 58
equivalent to the amount of the asset, unless it is also
required to recognize a liability. Where a liability is
required to be recognized, it is measured taking into
account the risks and uncertainties that surround the
events causing the liability to be recognized. Where
the time value of money is material, the liability is
measured at the present value of the amount
expected to be required to settle the obligation. When
a liability is subsequently reduced, because the
taxable event occurs, or a condition is satisfied, the
amount of the reduction in the liability is recognized
as revenue.
Debt Forgiveness and Assumption of Liabilities

16 Revenue is recognized when a former debt no longer IPSAS Refer to WP Nos. 1 and 2.
meets the definition of a liability or satisfies the 23:85
criteria for recognition as a liability.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
Lenders may sometimes waive their right to collect a IPSAS
debt owed by the NGA, which effectively increases 23:84, 86
the NGA’s net assets because a liability it previously
recognized is extinguished. However, when the debt
cancelled is between a controlling entity and a
wholly owned controlled entity, such as a department
and a bureau, or a main office and regional office,
the transaction may be a contribution from owners,
and thus, revenue is not recognized.
17 Revenue arising from debt forgiveness is measured at IPSAS Refer to WP Nos. 1 and 2.
the carrying amount of the debt forgiven. 23:87
Disclosures
18 The following are disclosed either on the face of, or IPSAS Refer to FS/NFS.
in the notes to, the general purpose financial 23:106
statements:
(a) The amount of revenue from non-exchange

transactions recognized during the period by major
classes showing separately:

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(i) Taxes, showing separately major classes of
taxes; and
(ii) Transfers, showing separately major classes of
transfer revenue.
(b) The amount of receivables recognized in respect

of non-exchange revenue;
(c) The amount of liabilities recognized in respect of

transferred assets subject to conditions;
(i) The amount of liabilities recognized in respect
of concessionary loans that are subject to conditions
on transferred assets;
(d) The amount of assets recognized that are subject
to restrictions and the nature of those restrictions;
(e) The existence and amounts of any advance

receipts in respect of non-exchange transactions; and
(f) The amount of any liabilities forgiven.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
19 The following are disclosed in the notes to the IPSAS
general purpose financial statements: 23:107
(a) The accounting policies adopted for the
recognition of revenue from non-exchange
transactions;
(b) For major classes of revenue from non-exchange

transactions, the basis on which the fair value of
inflowing resources was measured;
(c) For major classes of taxation revenue that

theNGA cannot measure reliably during the period in
which the taxable event occurs, information about the
nature of the tax; and
(d) The nature and type of major classes of bequests,

gifts, and donations, showing separately major
classes of goods in-kind received.

Annex 12
IPSAS/PPSAS 24 - Presentation of Budget Information in Financial Statements.
Yes/
WP Index Suggested WP/
Standards/Requirements Reference No/ Remarks
Number Minimum Requirement
NA
Refer to PGAM for other details.
Presentation of a Comparison of Budget and Actual Amounts
1 The NGA presents a comparison of the budget IPSAS 24:14 Refer to FS and NFS
amounts for which it is held publicly accountable and
actual amounts as a separate financial statement.
Paragraph 14 requires presentation of budget IPSAS 24:14

amounts either as a separate additional financial PPSAS 24,
statement or as additional budget columns in the PAG 2
financial statements currently presented in
accordance with IPSAS. For NGAs, the comparison
of budget and actual amounts shall be presented as a
separate financial statement.
2 The comparison of budget and actual amounts

presents separately:
a) The original and final budget amounts; IPSAS 24:14

Yes/
NA
The original budget includes residual IPSAS
appropriated amounts automatically carried over 24:11, 12
from prior years by law. The final budget
includes all authorized changes/amendments and
supplemental appropriations.
b) The actual amounts on a comparable basis; and IPSAS 24:14
Actual amounts refer to amounts that result from IPSAS 24:13

execution of the budget. For NGAs, actual
amounts refer to payments of budgeted amounts.
The amounts of unpaid goods or services
delivered or rendered shall not form part of the
actual amounts.
c) Differences between the actual amounts and the IPSAS 24:14

budget amounts, whether original or final budget.
Under IPSAS, an agency may present the IPSAS 24:15
difference between the actual amounts and the
budget amounts but is not compelled to do so.
For completeness and accountability, a NGA is
required to present the difference in the financial
statements.

Yes/
NA
d) By way of note disclosure, an explanation of IPSAS 24:14
material differences between the budget and actual
amounts, unless such explanation is included in other
public documents issued in conjunction with the
financial statements, and a cross reference to those
documents is made in the notes.
Explanation of material differences between IPSAS 24:19

actual and budget amounts are included in notes
to the financial statements, unless (a) included in
other public reports or documents issued in
conjunction with the financial statements, and (b)
the notes to the financial statements identify the
reports or documents in which the explanation
can be found.
3 The NGA presents an explanation of whether IPSAS 24:29

changes between the original and final budget are a
consequence of reallocations within the budget, or of
other factors:
a) By way of note disclosure in the financial
statements; or
b) In a report issued before, at the same time as, or in
conjunction with, the financial statements.

Yes/
NA
4 Where disclosures are made in separate reports rather IPSAS
than in the financial statements, the notes to the 24:29, 30
financial statements include a cross reference to the
report.
5 The comparison of budget and actual amounts is IPSAS 24:31
presented on a comparable basis to the budget.
Comparable basis means that the budget and actual IPSAS
amounts are presented on the same accounting basis 24:32, 34
(accrual, cash, or other basis), same classification
basis, and for the same agency and period as for the
approved budget. This will ensure that the disclosure
of information about compliance with the budget in
the financial statements is on the same basis as the
budget itself. This does not mean that agencies do
not adopt different bases of accounting for the
preparation of their financial statements and for
their approved budgets.
Note Disclosures
6 The NGA explains in the notes to the financial
statements the:

Yes/
NA
a) budgetary basis adopted in the approved budget; IPSAS 24:39
Budgetary basis means the accrual, cash, or other IPSAS 24:7

basis of accounting adopted in the budget that has
been approved by the legislative body.
b) classification basis adopted in the approved IPSAS 24:39

budget;
An approved budget may classify items by IPSAS 24:41
economic nature (salaries, transportation,
communication expenses), or function
(administrative services, support services, etc.),
or by programs (poverty reduction, etc.).
c) the period of the approved budget; and IPSAS 24:43
d) the entities included in the approved budget IPSAS 24:45

(where applicable)..
Reconciliation of Actual Amounts

Yes/
NA
7 Where the financial statements and the budget are not
prepared on a comparable basis, the actual amount
presented on a comparable basis to the budget is
reconciled to the following actual amounts presented
in the financial statements, identifying separately any
basis, timing, and entity differences:
(a) If the accrual basis is adopted for the budget, total IPSAS 24:47
revenues, total expenses, and net cash flows from
operating activities, investing activities, and
financing activities; or
(b) If a basis other than the accrual basis is adopted IPSAS 24:47
for the budget, net cash flows from operating
activities, investing activities, and financing
activities.
8 The reconciliation is disclosed on the face of the IPSAS 24:47
statement of comparison of budget and actual
amounts, or in the NFS.
Basis differences occur when the approved budget is IPSAS 24:48
prepared on a basis other than the accounting basis.
For example, where the budget is prepared on the
cash basis or modified cash basis and the financial
statements are prepared on the accrual basis;

Yes/
NA
Timing differences occur when the budget period IPSAS 24:48
differs from the reporting period reflected in the
financial statements; and
Entity differences occur when the budget omits IPSAS 24:48
programs or entities that are part of the entity for
which the financial statements are prepared.

Annex 13
IPSAS/PPSAS 26 - Impairment of Cash Generating Assets
Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
Cash-Generating Assets
1 The NGA correctly identifies its cash-generating IPSAS Refer to WP No. 1 for
assets, i.e., assets held with the primary objective of 26:13, 14 IPSAS/PPSAS 17 - PPE.
generating a commercial return to generate positive
cash inflows from the asset (or from the cash-
generating unit of which the asset is a part), and earn
a commercial return that reflects the risk involved in
holding the asset.
In certain instances, an asset may generate cash IPSAS

flows and also be used for non-cash generating 26:17
purposes. If the non-cash-generating component of
the activity is an insignificant component of the
arrangement as a whole, the asset is accounted for
as a cash generating asset.
2 In cases where it is not clear whether the primary IPSAS Refer to WP No. 1 for
objective of holding an asset is to generate a 26:18 IPSAS/PPSAS 21 - Impairment of
commercial return, criteria are established to guide Non-Cash Generating assets.
consistent exercise of judgement by the NGA.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
In cases where it is not clear whether the primary IPSAS
objective of holding an asset is to generate a 26:18
commercial return, judgment is applied. The NGA
should develop criteria so that it can exercise that
definition of cash generating assets and non-cash-
generating assets. However, given the overall
objectives of most public sector entities other than
GBEs, the presumption is that assets are non-cash-
generating in these circumstances.
Recognition and Measurement of Impairment Loss of Individual Assets

3 The NGA recognizes impairment loss if the IPSAS 1. JEV taking up the specific
recoverable amount of a cash generating asset is less 26:72, 73 transaction with supporting
than its carrying amount. documents.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
Impairment is defined as a loss in the future IPSAS
economic benefits or service potential of an asset, 26:20, 21
over and above the systematic recognition of the loss COA_C201
of the asset’s future economic benefits or service 3-002
potential through depreciation. Paragraphs 25–27
present the indications that an asset may be
impaired.
Recoverable amount is the higher of an asset’s or a IPSAS

cash-generating unit’s fair value less costs to sell 26:13, 31
and its value in use. Paragraphs 32–70 set out the
requirements for measuring recoverable amount.
4 At each reporting date, the NGA estimates the 2. Computation sheet for
recoverable amount of the asset when there is impairment testing.
indication that:
(a) an asset is impaired; or IPSAS
26:22
(b) the impairment loss recognized in prior periods IPSAS
no longer exist or have decreased. 26:99
5 The NGA tests for impairment the carrying amount IPSAS Refer to WP No. 2.
of an intangible asset that is not yet available for use, 26:23, 24
at least annually.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
The ability of an intangible asset to generate IPSAS
sufficient future economic benefits or service 26:24
potential to recover its carrying amount is usually
subject to greater uncertainty before the asset is
available for use than after it is available for use.
Therefore, the NGA is required to test for
impairment, at least annually, the carrying amount of
an intangible asset that is not yet available for use.
6 Irrespective of whether there is any indication of IPSAS Refer to WP No. 2.

impairment, the NGA also tests for impairment 26:23
annually, an intangible asset with an indefinite useful
life.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
The NGA tests for impairment by comparing the IPSAS
carrying amount of the asset with its recoverable 21:23
amount. This impairment test may be performed at
any time during the reporting period, provided it is
performed at the same time every year. Different
intangible assets may be tested for impairment at
different times. However, if such an intangible asset
was initially recognized during the current reporting
period, that intangible asset is tested for impairment
before the end of the current reporting period.
In assessing whether there is any indication that an

asset may be impaired, refer to IPSAS 21:25 to 30.
7 The NGA measures the recoverable amount of its IPSAS Refer to WP No. 2.
cash generating assets as the higher of the assets' fair 26:31
value less costs to sell and the value in use.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
In cases where it is not possible to determine fair IPSAS
value less costs to sell because there is no basis for 26:33
making a reliable estimate of the amount obtainable
from the sale of the asset in an arm’s length
transaction between knowledgeable and willing
parties, the NGA uses the asset’s value in use as its
recoverable amount.
If there is no reason to believe that an asset’s value IPSAS

in use materially exceeds its fair value less costs to 26:34
sell, the asset’s fair value less costs to sell may be
used as its recoverable amount.
8 The most recent detailed calculation of the IPSAS Refer to WP No. 2.

recoverable amount of an intangible asset with an 26:37
indefinite useful life, made in a preceding period is
used in the impairment test for that asset in the
current period, provided all of the following criteria
are met:

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(a) If the intangible asset does not generate cash IPSAS
inflows from continuing use that are largely 26:37
independent of those from other assets or groups of
assets and is therefore tested for impairment as part
of the cash generating unit to which it belongs, the
assets and liabilities making up that unit have not
changed significantly since the most recent
recoverable amount calculation;
(b) The most recent recoverable amount calculation IPSAS

resulted in an amount that exceeded the asset’s 26:37
carrying amount by a substantial margin; and
(c) Based on an analysis of events that have occurred IPSAS

and circumstances that have changed since the most 26:37
recent recoverable amount calculation, the likelihood
that a current recoverable amount determination
would be less than the asset’s carrying amount is
remote.
9 An asset's fair value less costs to sell is the: Refer to WP No. 2.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(a) binding sale agreement in an arm’s length IPSAS
transaction – sale price adjusted for incremental costs 26:38
directly attributable to the disposal of the asset;
(b) in an active market – the market price less cost of IPSAS

disposal or the price of the most recent transaction; 26:39
(c) best information available. IPSAS

26:40
If there is no binding sale agreement but an asset is IPSAS
traded in an active market, fair value less costs to 26:39
sell is the asset’s market price less the costs of
disposal. The appropriate market price is usually the
current bid price. When current bid prices are
unavailable, the price of the most recent transaction
may provide a basis from which to estimate fair
value less costs to sell, provided that there has not
been a significant change in economic circumstances
between the transaction date and the date as at
which the estimate is made.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
If there is no binding sale agreement or active IPSAS
market for an asset, fair value less costs to sell is 21:40
based on the best information available that reflects
the amount that the NGA could obtain, at the
reporting date, from the disposal of the asset in an
arm’s length transaction between knowledgeable,
willing parties, after deducting the costs of disposal.
10 The NGA reflects the following elements in the IPSAS Refer to WP No. 2.
calculation of its asset’s value in use: 21:43
(a) An estimate of the future cash flows expected to
be derived from the asset;
(b) Expectations about possible variations in the
amount or timing of those future cash flows;
(c) The time value of money, represented by the
current market risk free rate of interest;
(d) The price for bearing the uncertainty inherent in
the asset; and
(e) Other factors, such as illiquidity, that market
participants would reflect in pricing the future cash
flows expected to be derived from the asset.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
Estimating the value in use of an asset involves two IPSAS
steps: (1) Estimating the future cash inflows and 26:44
outflows to be derived from continuing use of the
asset and from its ultimate disposal; and (2)
Applying the appropriate discount rate to those
future cash flows.
The discount rate is the pre-tax rate that reflects IPSAS

current market assessments of: (a) the time value of 26:68
money, represented by the current risk-free rate of
interest; and (b) the risks specific to the asset for
which the future cash flow estimates have not been
adjusted.
Paragraphs 46 to 67 discuss the basis, composition

and conditions for estimates of future cash flows.
Refer also to the IPSAS Application Guidance for

guidance on the use of present value techniques in
measuring an asset’s value in use.
11 In recording impairment loss, the carrying amount of IPSAS Refer to WP Nos. 1 and 2.
the asset is reduced to its recoverable amount. 26:72

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
12 After the recognition of an impairment loss, the IPSAS Refer to WP No. 3 for
depreciation (amortization) charge for the asset is 26:75 IPSAS/PPSAS 17 - PPE.
life.
Recognition and Measurement of Impairment Loss of Cash Generating Units

13 If it is not possible to estimate the recoverable IPSAS Refer to WP No. 2.
amount of the individual asset, the NGA determines 26:77
the recoverable amount of the cash-generating unit to
which the asset belongs (the asset’s cash-generating
unit).
Cash-generating unit is the smallest group of assets IPSAS

that (a) includes the asset, and (b) generates cash 26:13, 79
inflows that are largely independent of the cash
inflows from other assets or groups of assets.
If recoverable amount cannot be determined for an IPSAS

individual asset, the NGA identifies the lowest 26:79
aggregation of assets that generate largely
independent cash inflows.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
The recoverable amount of an individual asset IPSAS
cannot be determined if: 26:78
(a) The asset’s value in use cannot be estimated to be
close to its fair value less costs to sell (for example,
when the future cash flows from continuing use of the
asset cannot be estimated to be negligible); and
(b) The asset does not generate cash inflows that are
largely independent of those from other assets and is
not capable of generating cash flows individually.
Even if part or all of the output produced by an asset IPSAS

or a group of assets is used by other units of the 26:82
agency (for example, products at an intermediate
stage of a production process), this asset or group of
assets forms a separate cash-generating unit if the
output can be sold in an active market. This is
because the asset or group of assets could generate
cash inflows that would be largely independent of the
cash inflows from other assets or groups of assets.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
For the purpose of determining the recoverable IPSAS
amount of a cash-generating unit, any reference in 26:85
paragraphs 32–70 to an asset is read as a reference
to a cash-generating unit.
14 The NGA identifies cash-generating units IPSAS Refer to WP No. 2.
consistently from period to period for the same asset 26:83, 84
or types of assets, unless a change is justified, in
which case, appropriate disclosures are made.
15 The NGA recognizes impairment loss for a cash- IPSAS Refer to WP Nos. 1 and 2.
generating unit if, and only if, the recoverable 26:91
amount of the unit is less than the carrying amount of
the unit.
16 The impairment loss on the cash generating unit is IPSAS Refer to WP Nos. 1 and 2.
treated as impairment losses on the individual assets 26:91
making up the unit, using pro-rata allocation based
on the carrying amount of the individual assets.
To reduce the carrying amount of the cash- IPSAS
generating assets of the unit, the impairment loss is 26:91
allocated on a pro rata basis, based on the carrying
amount of each asset in the unit. The reductions in
the carrying amounts are treated as impairment
losses on individual assets.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
17 The carrying amount of a cash-generating unit: IPSAS Refer to WP Nos. 1 and 2 for IPSAS/
26:87 PPSAS 17 - PPE.
(a) Includes the carrying amount of only those assets
that can be attributed directly, or allocated on a
reasonable and consistent basis, to the cash-
generating unit and will generate the future cash
inflows used in determining the cash-generating
unit’s value in use; and
(b) Does not include the carrying amount of any

recognized liability, unless the recoverable amount of
the cash-generating unit cannot be determined
without consideration of this liability.
The carrying amount of a cash-generating unit shall IPSAS
be determined on a basis consistent with the way the 26:86, 88
recoverable amount of the cash-generating unit is
determined. When assets are grouped for
recoverability assessments, it is important to include
in the cash-generating unit all assets that generate,
or are used to generate, the relevant stream of cash
inflows. Otherwise, the cash-generating unit may
appear to be fully recoverable when in fact an
impairment loss has occurred.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
18 In allocating an impairment loss, the carrying amount IPSAS Refer to WP Nos. 1 and 2.
of an asset is not reduced below the highest of: 26:92
(a) Its fair value less costs to sell (if determinable);

(b) Its value in use (if determinable); and
(c) Zero.
The amount of the impairment loss that would IPSAS
otherwise have been allocated to the asset shall be 26:92
allocated pro rata to the other cash-generating
assets of the unit.
19 Where a non-cash-generating asset contributes to a IPSAS Refer to WP Nos. 1 and 2.
cash-generating unit, a proportion of the carrying 26:93
amount of that non-cash-generating asset shall be
allocated to the carrying amount of the cash-
generating unit prior to estimation of the recoverable
amount of the cash-generating unit.
The carrying amount of the non-cash-generating IPSAS

asset reflects impairment loss at the reporting date 26:93
that have been determined under the requirements of
IPSAS/PPSAS 21.
Reversing an Impairment Loss for an Individual Asset

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
20 The NGA reverses an impairment loss recognized in IPSAS Refer to WP Nos. 1 and 2.
prior periods for an asset if, and only if, there has 26:103
been a change in the estimates used to determine the
asset’s recoverable amount since the last impairment
loss was recognized.
The NGA is required to identify the change in IPSAS

estimates that causes the increase in estimated 26:104
service potential. Examples of changes in estimates
include: (a) a change in the basis for recoverable
amount, (b) if recoverable amount was based on
value in use, a change in the amount or timing of
estimated future cash flows, or in the discount rate;
or (c) If recoverable amount was based on fair value
less costs to sell, a change in estimate of the
components of fair value less costs to sell.
21 The increased carrying amount of an asset IPSAS Refer to WP Nos. 1 and 2.

attributable to a reversal of an impairment loss does 26:106
not exceed the carrying amount that would have been
determined (net of amortization or depreciation) had
no impairment loss been recognized for the asset in
prior years.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
Reversal of impairment loss means the carrying IPSAS
amount of an asset is increased to its recoverable 26:103
amount.
Any increase in the carrying amount of an asset IPSAS
above the carrying amount that would have been 26:107
determined (net of amortization or depreciation) had
no impairment loss been recognized for the asset in
prior years is a revaluation.
22 After a reversal of an impairment loss is recognized, IPSAS Refer to WP Nos. 1 and 2.

the depreciation (amortization) charge for the asset is 26:109
life.
Reversing an Impairment Loss for a Cash-Generating Unit

23 The reversal of an impairment loss for a cash- IPSAS Refer to WP Nos. 1 and 2.
generating unit is allocated to the cash-generating 26:110
assets of the unit pro rata with the carrying amounts
of those assets.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
In allocating a reversal of an impairment loss for a IPSAS
cash-generating asset, the carrying amount of an 26:111
asset shall not be increased above the lower of:
(a) Its recoverable amount (if determinable); and
(b) The carrying amount that would have been

determined (net of amortization or depreciation) if
no impairment loss had been recognized for the asset
in prior periods. The amount of the reversal of the
impairment loss that would otherwise have been
allocated to the asset shall be allocated pro rata to
the other assets of the unit.
24 The increases in carrying amounts are treated as IPSAS Refer to WP Nos. 1 and 2.
reversals of impairment losses for individual assets. 26:110
25 No part of the amount of such a reversal is allocated IPSAS Refer to WP Nos. 1 and 2.
to a non-cash-generating asset contributing service 26:110
potential to a cash-generating unit.
Redesignation of Assets

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
26 The NGA redesignates a cash-generating asset to a IPSAS Refer to WP No. 1 for
non-cash-generating asset or a non-cash-generating 26:112 IPSAS/PPSAS 17 - PPE.
asset to a cash-generating asset only when there is
clear evidence that such a redesignation is
appropriate.
There are circumstances in which public sector IPSAS

agencies may decide that it is appropriate to 26:113
redesignate a cash-generating asset as a non-cash-
generating asset or vice versa. In these cases,
prudent judgement is needed.
Disclosure
27 The NGA discloses the criteria it developed to IPSAS Refer to FS/NFS.
distinguish cash-generating assets from non-cash- 26:114, 116
generating assets.
28 The NGA discloses the following for each class of IPSAS
assets: 26:115
surplus or deficit during the period, and the line
item(s) of the statement of financial performance in
which those impairment losses are included.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
recognized in surplus or deficit during the period,
and the line item(s) of the statement of financial
performance in which those impairment losses are
reversed.
A class of assets is a grouping of assets of a similar IPSAS

nature or function in the agency’s operations that is 26:117
shown as a single item for the purpose of disclosure
in the financial statements.
29 If the NGA reports segment information in IPSAS

accordance with IPSAS/PPSAS 18, Segment 26:119
Reporting, it discloses the following for each
reported segment:
surplus or deficit during the period; and
recognized in surplus or deficit during the period.
30 The NGA discloses the following for each material IPSAS
impairment loss recognized or reversed during the 26:120
period for a cash-generating asset or a cash-
generating unit:

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(a) The events and circumstances that led to the
recognition or reversal of the impairment loss;
(b) The amount of the impairment loss recognized or
reversed;
(c) For a cash-generating asset:
(i) The nature of the asset; and
(ii) If the agency reports segment information in
accordance with IPSAS/PPSAS 18, the reported
segment to which the asset belongs, based on the
agency’s reporting format.
(d) For a cash-generating unit:
(i) A description of the cash-generating unit (such
as whether it is a product line, a plant, a business
operation, a geographical area, or a reported
segment);
(ii) The amount of the impairment loss recognized
or reversed by class of assets, and, if the agency
reports segment information in accordance with
IPSAS/PPSAS 18, by reported segment based on
the agency’s reporting format; and

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(iii) If the aggregation of assets for identifying the
cash generating unit has changed since the
previous estimate of the cash-generating unit’s
recoverable amount (if any), a description of the
current and former way of aggregating assets and
the reasons for changing the way the cash
generating unit is identified.
(e) Whether the recoverable amount of the asset is its

fair value less costs to sell or its value in use;
(f) If the recoverable amount is fair value less costs
to sell, the basis used to determine fair value less
costs to sell (such as whether fair value was
determined by reference to an active market); and
(g) If the recoverable amount is value in use, the
discount rate(s) used in the current estimate and
previous estimate (if any) of value in use.
31 The NGA discloses the following information for the IPSAS
aggregate impairment losses and the aggregate 26:121
reversals of impairment losses recognized during the
period for which no information is disclosed in
accordance with paragraph 120:

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(a) The main classes of assets affected by impairment
losses and the main classes of assets affected by
reversals of impairment losses; and
(b) The main events and circumstances that led to the
recognition of these impairment losses and reversals
of impairment losses.
The NGA is encouraged to disclose assumptions IPSAS
used to determine the recoverable amount of 26:122
assets during the period. However, paragraph
123 requires disclosure of information about the
estimates used to measure the recoverable amount
of a cash-generating unit when an intangible
asset with an indefinite useful life is included in
the carrying amount of that unit.
32 Where the carrying amount of intangible assets with IPSAS

indefinite useful lives allocated to the cash- 26:123
generating unit is significant in comparison with the
total carrying amount of intangible assets with
indefinite useful lives, the NGA discloses the
following information for each cash-generating unit:
(a) The carrying amount of intangible assets with

indefinite useful lives allocated to the unit;

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(b) The basis on which the unit’s recoverable amount
has been determined (i.e., value in use or fair value
less costs to sell);
(c) If the unit’s recoverable amount is based on value
in use:
(i) A description of each key assumption on which
management has based its cash flow projections
for the period covered by the most recent
budgets/forecasts. Key assumptions are those to
which the unit’s recoverable amount is most
sensitive;
(ii) A description of management’s approach to

determining the value(s) assigned to each key
assumption, whether those value(s) reflect past
experience or, if appropriate, are consistent with
external sources of information, and, if not, how
and why they differ from past experience or
external sources of information;

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(iii) The period over which management has
projected cash flows based on financial
budgets/forecasts approved by management and,
when a period greater than five years is used for a
cash-generating unit, an explanation of why that
longer period is justified;
(iv) The growth rate used to extrapolate cash flow

projections beyond the period covered by the most
recent budgets/forecasts, and the justification for
using any growth rate that exceeds the long-term
average growth rate for the products, industries,
or country or countries in which the entity
operates, or for the market to which the unit is
dedicated; and
(v) The discount rate(s) applied to the cash flow

projections.
(d) If the unit’s recoverable amount is based on fair
value less costs to sell, the methodology used to
determine fair value less costs to sell. If fair value
less costs to sell is not determined using an
observable market price for the unit, the following
information are also disclosed:

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(i) A description of each key assumption on which
management has based its determination of fair
value less costs to sell;
Key assumptions are those to which the unit’s
recoverable amount is most sensitive.
(ii) A description of management’s approach to
determining the value (or values) assigned to each
key assumption, whether those values reflect past
external sources of information, and, if not, how
and why they differ from past experience or
external sources of information. If fair value less
costs to sell is determined using discounted cash
flow projections, the following information shall
also be disclosed:
(iii)The period over which management has

projected cash flows;
(iv)The growth rate used to extrapolate cash flow
projections; and
(v)The discount rate(s) applied to the cash flow
projections.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(e) If a reasonably possible change in a key
assumption on which management has based its
determination of the unit’s recoverable amount
would cause the unit’s carrying amount to exceed its
recoverable amount:
(i) The amount by which the unit’s recoverable

amount would exceed its carrying amount;
(ii) The value assigned to the key assumption; and
(iii) The amount by which the value assigned to

the key assumption must change, after
incorporating any consequential effects of that
change on the other variables used to measure
recoverable amount, in order for the unit’s
recoverable amount to be equal to its carrying
amount.
33 If some or all of the carrying amount of intangible IPSAS

assets with indefinite useful lives is allocated across 26:124
multiple cash-generating units, and the amount so
allocated to each unit is not significant in comparison
with the agency’s total carrying amount of intangible
assets with indefinite useful lives, the NGA
discloses:

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(a) that fact;
(b) the aggregate carrying amount of intangible
assets with indefinite useful lives allocated to those
units; and
(c) if applicable, the fact that the recoverable
amounts of any of those units are based on the same
key assumptions, and the aggregate carrying amount
of intangible assets with indefinite useful lives
allocated to them is significant in comparison with
the agency’s total carrying amount of intangible
assets with indefinite useful lives.
34 In relation to (c) above, the NGA also discloses: IPSAS

26:124
(a) The aggregate carrying amount of intangible
assets with indefinite useful lives allocated to those
units;
(b) A description of the key assumption(s);

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(c) A description of management’s approach to
determining the value(s) assigned to the key
assumption(s), whether those value(s) reflect past
external sources of information, and if not, how and
why they differ from past experience or external
sources of information;
(d) If a reasonably possible change in the key

assumption(s) would cause the aggregate of the
units’ carrying amounts to exceed the aggregate of
their recoverable amounts:
(i) The amount by which the aggregate of the
units’ recoverable amounts would exceed the
aggregate of their carrying amounts;
(ii) The value(s) assigned to the key
assumption(s); and
(iii) The amount by which the value(s) assigned to
the key assumption(s) must change, after
incorporating any consequential effects of the
change on the other variables used to measure
recoverable amount, in order for the aggregate of
the units’ recoverable amounts to be equal to the
aggregate of their carrying amounts.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
The most recent detailed calculation made in a IPSAS
preceding period of the recoverable amount of a 26:125
cash-generating unit may, in accordance with
paragraph 37, be carried forward and used in the
impairment test for that unit in the current period,
provided specified criteria are met. When this is
the case, the information for that unit that is
incorporated into the disclosures required by
paragraphs 123 and 124 relate to the carried
forward calculation of recoverable amount.

Annex 14
IPSAS/PPSAS 27 - Agriculture
Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
Recognition of asset
1 Biological assets and agricultural produce (at the COA_C201 1. List of biological assets showing
point of harvest) are appropriately recorded as: 3-002 classification (bearer, consumable),
purpose (operation, sale, rent), life,
fair value/cost and auditor's remark/
observation.
A biological asset is a living animal or plant while IPSAS 27:9

an agricultural produce is the harvested product of
biological assets.
(a) bearer biological assets IPSAS

27:40

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
Bearer biological assets are self-generating and
used repeatedly or continuously for more than
one year in an agricultural activity. Examples of
types of animals that are bearer biological assets
include breeding stocks (including fish and
poultry), livestock from which milk is produced,
and other animals used for wool/leather
production. Examples of types of plants that are
bearer biological assets include trees, vines and
shrubs cultivated for fruits, nuts, sap, resin, bark
and leaf products and trees from which firewood
is harvested while the tree remains.
(b) consumable biological assets IPSAS

27:40

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
Consumable biological assets are those that are
held for harvest/consumption as agricultural
produce or for sale or distribution at no charge or
for a nominal charge as biological assets.
Examples of consumable biological assets are
animals and plants for one-time use, such as
livestock intended for the production of meat,
livestock held for sale, fish in farms, crops such as
maize and wheat, and trees being grown for
lumber.
2 A biological asset/agricultural produce is recorded in IPSAS

the books when and only when: 27:13
(a) The NGA controls the asset as a result of past

events;
In agricultural activity, control may be evidenced IPSAS

by, for example, legal ownership of cattle and the 27:15
branding or otherwise marking of the cattle on
acquisition, birth, or weaning.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(b) It is probable that future economic benefits or
service potential associated with the asset will flow
to the NGA; and
(c) The fair value or cost of the asset can be

measured reliably.
The fair value of an asset is based on its present IPSAS
location and condition. Thus, the fair value of 27:14
cattle at a farm is the price for the cattle in the
relevant market less the transport and other costs
of getting the cattle either to that market or to the
location where it will be distributed at no charge
or for a nominal charge.
Measurement
3 Biological assets, including those acquired through IPSAS 1. JEV taking up the specific
non-exchange transactions, are measured initially and 27:16, 17 transaction with supporting
at each reporting date at fair value less costs to sell documents showing computation of
except where the fair value cannot be measured cost with details of all factors
reliably. considered (fair value, cost to sell,
market used, etc.).

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
4 Agricultural produce harvested from the NGA’s IPSAS Refer to WP No. 1.
biological assets is measured at fair value less costs 27:18, 36
to sell at the point of harvest.
The presumption that fair value can be measured IPSAS

reliably can be rebutted only on initial recognition 27:34, 35
for which market-determined prices are not
available, and alternative estimates are clearly
unreliable. In such case, the biological asset is
measured at its cost less any accumulated
depreciation and any accumulated impairment
losses. Once the fair value of such a biological asset
becomes reliably measurable, the asset is measured
at its fair value less costs to sell.
In determining cost, accumulated depreciation and IPSAS

accumulated impairment losses, consider IPSAS 12, 27:37
17, 21, and 26.
5 If an active market exists for a biological asset in its IPSAS Refer to WP No. 1.
present condition and location, the NGA uses the 27:21
quoted price in that market as basis in determining
the fair value of the asset.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
There may be no separate market for biological IPSAS
assets that are attached to the land but an active 27:29
market may exist for the combined assets, that is, for
the biological assets, raw land, and land
improvements, as a package. The NGA may use
information regarding the combined assets to
determine fair value for the biological assets. For
example, the fair value of raw land and land
improvements may be deducted from the fair value of
the combined assets to arrive at the fair value of
biological assets.
6 If there are two or more active markets, the NGA IPSAS Refer to WP No. 1.
uses the price existing in the more relevant market as 27:21
basis in determining the fair value of the asset.
7 If an active market does not exist, the NGA uses one IPSAS Refer to WP No. 1.
or more of the following, when available, in 27:22
determining fair value:
(a) The most recent market transaction price,
provided that there has not been a significant change
in economic circumstances between the date of that
transaction and the reporting date;

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(b) Market prices for similar assets with adjustment
to reflect differences; and
(c) Sector benchmarks such as the value of an
orchard expressed per export tray, bushel, or hectare,
and the value of cattle expressed per kilogram of
meat.
8 In case the market-determined prices or values are IPSAS Refer to WP No. 1.
not available for use in determining the fair value of 27:24
a biological asset in its present condition, the NGA
uses the present value of expected net cash flows
from the asset discounted at a current market-
determined rate.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
In determining the present value of expected net cash IPSAS
flows, an entity includes the net cash flows that 27:25, 26,
market participants would expect the asset to 27
generate in its most relevant market. The possibility
of variations in cash flows into either the expected
cash flows, or the discount rate, or some
combination of the two, should also be considered.
However, cash flows for financing the assets,
taxation, or re-establishing biological assets after
harvest (for example, the cost of replanting trees in a
plantation forest after harvest) are not included.
9 A gain or loss is included in surplus or deficit for the IPSAS Refer to WP No. 1.
period in which the following arises: 27:30, 32
(a) initial recognition of a biological asset and

agricultural produce at fair value less costs to sell;
(b) a change in fair value less costs to sell of a
biological asset; and
(c) initial recognition of agriultural produce.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
Biological transformation comprises the processes of IPSAS 27:9
growth, degeneration, production, and procreation
that cause qualitative or quantitative changes in a
biological asset.
Biological transformation such as when an animal is IPSAS

born may result in a gain while initial recognition 27:30, 32
upon acquisition through purchase or non-exchange
transaction, of biological assets may result in a loss.
A loss is likely to occur because the fair value less

estimated point-of-sale costs are likely to be less than
the total purchase price plus transaction and
transportation costs.
10 All costs relating to biological assets, except the cost IPSAS Refer to WP No. 1.
of purchase, are taken to profit or loss. (Example, 27:30
feeds, vitamins)
Disclosures
11 The NGA discloses: Refer to FS/NFS.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(a) the aggregate gain or loss arising during the IPSAS
current period: 27:38
(i) on initial recognition of biological assets and
agricultural produce, and
(ii) from the change in fair value less costs to sell
of biological assets
(b) quantified description accompanied by narrative IPSAS
description of biological assets that distinguishes: 27:39, 41
(i) between consumable and bearer biological
assets, and
(ii) between biological assets held for sale and
those held for distribution at no charge or for a
nominal charge.

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
The NGA is also encouraged to distinguish IPSAS
between mature and immature biological assets, 27:42, 43
as appropriate to provide information that may be
helpful in assessing the timing of future cash flows
and service potential. Mature biological assets
are those that have attained harvestable
specifications (for consumable biological assets)
or are able to sustain regular harvests (for bearer
biological assets).
(c) the methods and significant assumptions applied IPSAS

in determining the fair value of each group of 27:45
agricultural produce at the point of harvest and each
group of biological assets;
(d) the fair value less costs to sell of agricultural IPSAS
produce harvested during the period, determined at 27:46
the point of harvest;
(e) The existence and carrying amounts of biological IPSAS
assets whose title is restricted, and the carrying 27:47
amounts of biological assets pledged as security for
liabilities;

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(f) The nature and extent of restrictions on the
NGA’s use or capacity to sell biological assets;
(g) The amount of commitments for the development

or acquisition of biological assets;
(h) Financial risk management strategies related to

agricultural activity; and
(i) a reconciliation of changes in the carrying amount IPSAS

of biological assets between the beginning and the 27:48
end of the current period, which includes:
(i) The gain or loss arising from changes in fair
value less costs to sell, disclosed separately for
bearer biological assets and consumable
biological assets;
(ii) Increases due to purchases;
(iii) Increases due to assets acquired through a
non-exchange transaction;

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(iv) Decreases attributable to sales and biological
assets classified as held for sale (or included in a
disposal group that is classified as held for sale) in
accordance with the relevant international or
national standard dealing with non-current assets
held for sale and discontinued operations;
(v) Decreases due to distributions at no charge or

for a nominal charge;
(vi) Decreases due to harvest;
(vii) Increases resulting from entity combinations;
(viii) Net exchange differences arising on the
translation of financial statements into a different
presentation currency, and on the translation of a
foreign operation into the presentation currency of
the reporting agency; and
(ix) Other changes.
(j) nature and amount of material item of revenue or IPSAS

expense that arises from climatic, disease and other 27:51
natural risks (Examples, outbreak of a virulent
disease, a flood, a severe drought or frost, and a
plague of insects).

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
12 If not disclosed elsewhere in information published IPSAS
with the financial statements,the NGA describes: 27:44
(a) The nature of its activities involving each group

of biological assets; and
(b) Non-financial measures or estimates of the

physical quantities of:
(i) Each group of theNGA's biological assets at

the end of the period; and
(ii) Output of agricultural produce during the
period.
13 If the NGA measures biological assets at their cost IPSAS

less any accumulated depreciation and any 27:52
accumulated impairment losses at the end of the
period, the NGA discloses for such biological assets:
(a) A description of the biological assets;

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(b) An explanation of why fair value cannot be
measured reliably;
(c) If possible, the range of estimates within which

fair value is highly likely to lie;
(d) The depreciation method used;
(e) The useful lives or the depreciation rates used;

and
(f) The gross carrying amount and the accumulated

period.
14 If, during the current period, the NGA measures IPSAS

biological assets at their cost less any accumulated 27:53
depreciation and any accumulated impairment losses,
the NGA discloses:

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(a) any gain or loss recognized on disposal of such
biological assets; and
(b) the reconciliation required by IPSAS 27:48

discloses:
(i) amounts related to such biological assets
separately, and
(ii) the following amounts included in surplus or
deficit related to those biological assets:
-Impairment losses;
-Reversals of impairment losses; and
-Depreciation.
15 If the fair value of biological assets previously IPSAS

measured at their cost less any accumulated 27:54
depreciation and any accumulated impairment losses
becomes reliably measurable during the current
period, the NGA discloses for those biological assets:
(a) A description of the biological assets;

Yes/ WP
Suggested WP/
Minimum Requirement
NA Number
(b) An explanation of why fair value has become
reliably measurable; and
(c) The effect of the change.

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GUIDE CHECKLIST

OUTLINE Tab Code

Philippine government accounting is generally on accrual basis of accounting

Intro, Page 2 of 231

5 The IPSAS/PPSAS sheets contain 5 columns. Column 1 presents the

Intro, Page 3 of 231

It should be emphasized, however, that the guide checklist is primarily the

11 Questions on specific sections/areas may be directed to the Government

12 The following acronyms are used:

Intro, Page 4 of 231

Intro, Page 5 of 231

(a) A statement of financial position;

(e) A comparison of budget and actual amounts; and

Annex 1, Page 6 of 231

2 The NFS are not used to justify/rectify inappropriate IPSAS 1:30

3 The NFS include an explicit and unreserved IPSAS 1:28

IPSAS1 sets out the overall considerations for the PPSAS 1,

4 The financial statements present fairly the financial IPSAS 1:27

Annex 1, Page 7 of 231

Financial statements shall not be described as IPSAS 1:28

A fair presentation also requires a NGA: IPSAS 1:29

(a) To select and apply accounting policies in

Annex 1, Page 8 of 231

The responsibility for the fair presentation and PPSAS 1,

5 In the extremely rare circumstances in which the IPSAS 1:31

(a) existing laws and regulations require, or IPSAS 1:31

Annex 1, Page 9 of 231

6 When the NGA departs from a requirement of a IPSAS 1:32

(b) That it has complied with applicable IPSAS-

Annex 1, Page 10 of 231

(d) For each period presented, the financial impact of

Annex 1, Page 11 of 231

(a) The title of the Standard in question, the nature of

(b) For each period presented, the adjustments to

Annex 1, Page 12 of 231

10 Material uncertainties related to events or conditions IPSAS 1:38

11 Where the financial statements are not prepared on a IPSAS 1:38

Annex 1, Page 13 of 231

13 Each material class of similar items is presented IPSAS 1:45

Annex 1, Page 14 of 231

Applying the concept of materiality means that a IPSAS 1:47

Annex 1, Page 15 of 231

17 The NGA discloses comparative information in IPSAS 1:53

Annex 1, Page 16 of 231

20 When comparative amounts are reclassified, the IPSAS 1:55

(b) The nature of the adjustments that would have

Annex 1, Page 17 of 231

22 Each component of the financial statements is IPSAS 1:63

23 The following information are displayed IPSAS 1:63

Annex 1, Page 18 of 231

Control is the power to govern the financial and IPSAS 2:8

(e) The level of rounding used in presenting amounts IPSAS 1:63

Annex 1, Page 19 of 231

24 The financial statements of the NGA are presented at IPSAS 1:66

Annex 1, Page 20 of 231

27 An asset is classified as current when: IPSAS 1:76

(a) It is expected to be realized in, or is held for sale

Annex 1, Page 21 of 231