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COOPERATIVES
CUMITAG & EMPLEO

ACA 323
 Cooperative (Co-op)
an autonomous and duly registered
association of persons, with common bond of
interest, who have voluntarily joined together
to achieve their social, economic, and cultural
needs and aspirations by making equitable
contributions to the capital required,
patronizing their products and services and
accepting a fair share of the risks and
benefits of the undertaking in accordance
with universally accepted cooperatives
principles.
 Cooperatives in the Philippines

Registered
18,848 cooperatives in the
Philippines as of
2020
The number of
reporting
cooperatives in
Philippines by
region as of
10,900
2020
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Cooperative Principles
CONCERN FOR COMMUNITY
COOPERATION AMONG
COOPERATIVES

VOLUNTARY AND
EDUCATION, TRAINING OPEN MEMBERSHIP
AND INFORMATION

DEMOCRATIC MEMBER CONTROL

AUTONOMY AND INDEPENDENCE

 Examples of sectors where
Cooperatives can be found

Agriculture Banking Education Grocery stores

Blue Diamond, Land Credit Unions Private schools owned by the stores and markets are
O'Lakes and Ocean Spray. teachers, parent owned by those who
organizations, and institutions shop there

—Someone Famous

Health care Housing Insurance Utilities

Pharmacists, home- Members include those Owned by the Provide electricity,
based care and other who live in a building, while clients who have telecommunication
cooperatives the cooperative owns the policies at the services or water to its
property. insurance company members
 Personal Business Structures vs.
Cooperative
01 Sole Proprietorship- owned by 03
one person or a married couple, Co-op- a type of
easy to set up and easy to corporation owned by
manage. the people who use
-owners are liable for company the company's
debts in the event of insolvency services or by its
or lawsuits. employees.

-Nobody owns a
larger portion of the
02 business than anyone
else
Limited liability company (LLC)
provides more personal protection, -Profits are split with
but it is still a structure designed the owners or
for a single owner, not a large reinvested in the
group of people. company.
COOPERATIVES VS. CORPORATION
CO-OP
• Cooperatives are formed to serve the needs
of their members
• Board members come from the cooperative
membership
• Each member gets one vote in a cooperative
• Cooperatives are taxed differently

CORP
• Corporations exist primarily to make a
profit.
• Non-shareholders can be elected to sit on a
corporation's board.
• Corporate shareholders get a vote for each
share they own.
Financial Reporting
Framework for
Cooperatives
HereDeveloped
you can from
describe the topic
the Philippine of the Reporting
Financial section Standards
(PFRS) for Small and Medium-Sized Enterprises (SMEs).
Modifications were made on several provisions of the
standards taking into considerations cooperative laws, rules,
regulations and principles.
Financial Statements of a Cooperative

provide information about

the financial condition,
performance and cash
flows of the cooperative
that is useful for economic
decision-making.

Show the results of the

stewardship and the
accountability of
management for the
resources entrusted to it.
 Statement of Financial Condition as of reporting date

COMPLETE
Mercury Statement of Operations for the reporting period
SET OF is the closest
Mercury Despite eing red, Mars is
planet to the Sun a cold place
FINANCIAL Statement of Changes in Equity for the reporting
STATEMENTS period
OF A
COOPERATIVE: Statement of Cash Flows for the reporting period
Saturn is the ringed one It’s the farthest planet
and aa gas
Notes, comprising giant
summary of significant from the Sun
accounting policies and other explanatory information.
 Statement of Financial Condition
presents a cooperative’s assets, liabilities and equity as of a specific
date—the end of the reporting period

Asset
future economic benefit of an
asset is its potential to
contribute, directly or
indirectly, to the flow of cash Equity
and cash equivalents to the
cooperative. residual of recognized assets
minus recognized liabilities. It
is classified in the statement
Basic Premium Pro
of financial condition as
Liabilities
You can explain your You can explain your
Members’ Equity, Statutory
YouDonations
can explainand
your
Funds, Grants,
essential
productcharacteristic
or your of a product or your and Revaluation
product or Surplus.
your
liability is that
servicethe cooperative service service
has a present obligation to
act or perform in a particular
way. The obligation may be
either a legal obligation or a
constructive obligation.
 Information to be presented in the
Statement Of Financial Condition:
As a minimum, the statement of financial condition shall include line items that
present the following amounts:

a. Cash and Cash Equivalents p. Financial Liabilities (excluding

b. Loans and Receivables amounts shown under (l) (m)
c. Financial Assets (excluding (n) (o) and (s)
amounts shown under (a), (b), q. Liabilities and Assets for
(i) (j) and (k)) current tax (if applicable)
d. Inventories r. Deferred Tax Liabilities and
e. Property, Plant and Equipment Deferred Tax Assets (if
f. Basic
Investment Property Premium applicable) Pro
g. Intangible Assets s. Provisions
h. can
You Biological assets
explain your t. Members’
You can explain your Equity You can explain your
i. Investments in Associates
product or your u. Donations and Grants
product or your product or your
j. Investments
service in Joint Ventures service
v. Statutory Funds (Reserve Fund,
service
k. Investments in Subsidiaries Education & Training Fund,
l. Trade and Other Payables Optional Fund and Community
m. Interest on Share Capital Development Fund)
Payable w. Revaluation Surplus
n. Patronage Refund Payable
o. Due to Unions and Federations
(CETF)
 Statement of Operations
present the financial performance of the cooperative for the
period.

Analysis of expenses
A cooperative shall present an analysis of expenses
based on the function of expenses within the
Basic
cooperative where Premium
expenses are aggregated Pro
according to their function as part of cost of sales or,
You can explain your You can explain your You can explain your
for example,
product or your the costs of or
product distribution
your or product or your
administrative
service activities. At a minimum, a cooperative
service service
should disclose its cost of sales separately from other
expenses.
 A cooperative shall present its
Profit or Loss:
As a minimum, a cooperative shall include, in the statement
of operations, line items that present the following
amounts for the period:

• Revenue
• Cost of Sales or Direct Cost of Services
Basic Premium Pro
• Finance Cost
You can explain your You can explain your You can explain your
• Selling
product or your or Marketing Cost
product or your product or your
Administrative Cost
• service service service

• Other Income or Expense

• Tax expense, if applicable
• Allocation of Net Surplus
Statement of Statement of
Changes in Cash Flows
Equity
provides information
presents the amounts about the changes in
of investments and cash and cash
withdrawals by
Basic
members, addition and
Premiumequivalents of Pro a
cooperative for a
utilization of statutory
You can explain your You can explain your You can explain your
product or your product or yourreporting period,
product or your
funds, movement
service in service showing separatelyservice
donations and grants, changes from operating
and revaluation activities, investing
surplus during the activities and financing
period activities.
 Monthly Cash Flow Statement
important management planning tool to indicate the cooperative can meet monthly
cash obligations.

Basic Premium Pro

You can explain your You can explain your You can explain your
product or your product or your product or your
service service service
 Notes to Financial Statements
contain information in addition to that presented in the statement of financial condition,
statement of operations, statement of changes in equity, and statement of cash flows.

A cooperative normally presents the notes in the following order:

A. A statement that the financial

statements have been prepared
in compliance with the Philippine
Financial Reporting Framework
for Cooperatives
Basic Premium Pro
You can explain your You can explain your B. AYou
summary of significant
can explain your
product or your accounting policies applied;
product or your product or your
service service service
C. Supporting information
for items presented in the
financial statements, in the
sequence in which each
statement and each line D. Any other disclosures
item is presented
 Member Accounts
Patronage account Retained Per-Unit Capital
Accurate records of Earnings Retains
the level of each used by the cooperative Member Accounts
Another method of
member’s to finance the future member capital Receivable
patronage are operations or investment
needed to Capital supplement startup Sales on credit to
determine the capital. member-users should
Cooperatives be monitored closely
distribution of usually require
patronage refunds some member
investment,
especially for
Basic startup capital Premium Pro
You can explain your You can explain your You can explain your
product or your product or your product or your
service service service
 Audit of Financial Statements

Substantive
▪ Procedures
Basic Premium
• Pro
You can explain your You can explain your You can explain your
product or your product or your product or your
•
service service service

•
•
Special Features
of Co-Operative
Audit
 Examination of Overdue Interest
Overdue Debts
Examine and classify overdue
Mars debts
• 6 months – 5 years
• 5 years + in two categories
and shall have to report it in
his audit report.
Valuation of Assets
and Liabilities
Excluded No specific provisions
or instructions under
Jupiter
the Act and Rules are
provided.
It’s the biggest planet in
the Solar System

Mercury
Adherence to Co- Certification of Observation of the
operative principles Bad-debts Satun Provisions of the
Mercury
ascertain howisfar closest no bad debts can SaturnAct
thethe and Rules
is the ringed
objectives,
planetfor
towhich
the Sunthe be written off unless Auditor should be well
Co-operative society is they are certified as
planet. It’s awith
versed gas the
giant
set up, have been bad debts by the Provisions of the Act and
achieved in course of its Auditor Rules of the Cooperative
working Society and the by-laws
thereof.
 Verification of Members
Special Report to Audit Classification
Register and Examination of
the Registrar of Society
their Pass Books
to ensure that the books of any irregularities are Auditor has to

Jupiter
accounts are free from any found by the Auditor that award a class to the
manipulation. should be reported to the society.
Registrar It’s the biggest planet in
the Solar System

Discussion on
By-laws Investment of Funds
Audit Draft
A registered society can invest or
audit report can Each registered deposit its funds only in −
never be finalized society is required to • Saving bank account of Government
without discussing frame its own by- Banks.
with the managing laws • The shares or in the security of any
committee. other registered society.
• Any bank or person carrying on the
business of banking approved for this
purpose by the Registrar.
 Governance And Management Audit
Working Paper

• To be used by the Audit Committee or Internal

Auditor in analyzing/assessing the
performance of the coop to be prescribed by
the Authority.
• Must be filled up by the Audit Committee/
Internal Auditor
• Two Major Components:
• Governance Reports
• Management Reports/Records
Governance And Management Audit Report

• Refers to the summary reports of

analysis/assessment to be undertaken by the
cooperative based on the results of the audit
using the tool prescribed by the Authority.
• Its purpose is to determine the presence of
the documents needed to be maintained by
every cooperative in the operation and
management of its business.
Period of Submission to the Cooperative Development
Authority and Sanctions

Not later than days from Non submission means non

the end of each Calendar issuance of Certificate of
Year as attachment of the Compliance and continuous
Cooperative Annual non submission the coop be
Progress Report (CAPR) subjected to a procedural
process of cancellation
Consolidation, Evaluation and Submission of
Management and Governance Audit Report

• Supervision and Examination Unit

(SEU)

• The results will be submitted to the

Extension Office Directors (EODs)
for possible intervention

• Summary of the Report to the

Central Office