Recognition as an Expense

The carrying amount of an inventory is

recognized as expense in the period it is:
a. Sold;
b. Distributed;
c. Exchanged;
d. Consumed; or
e. Written down to its NRV or Current
replacement cost (only the portion of the
carrying amount in excess of the NRV or CRC
is recognized as expense).

GOVT ACCTG & ACCTG FOR NPOs by: Z.B.Millan

 Receipt and Disposition of Inventories
• Requisition
1. End users prepare the Purchase Request (PR)
form.

2. Purchasing Unit prepares the Purchase Order

(PO).

(Note: A canvass from at least 3 suppliers is

required for purchases amounting to ₱1,000 and
above.)

GOVT ACCTG & ACCTG FOR NPOs by: Z.B.Millan

 Receipt and Disposition of Inventories
• Receipt
3. Property/Supply Division prepares the
Inspection and Acceptance Report (IAR)
and forwards it to the Property Inspector.
4. Property Inspector inspects the delivered
items and fills up the IAR.

GOVT ACCTG & ACCTG FOR NPOs by: Z.B.Millan

 Receipt and Disposition of Inventories
• Receipt
3. Property/Supply Division prepares the
Inspection and Acceptance Report (IAR)
and forwards it to the Property Inspector.
4. Property Inspector inspects the delivered
items and fills up the IAR.
5. The Property/Supply Division records
accepted deliveries in the Stock Card (SC).
6. The Accounting Division records accepted
deliveries in the books of accounts and in
the Supplies Ledger Card (SLC).
GOVT ACCTG & ACCTG FOR NPOs by: Z.B.Millan
Receipt and Disposition of Inventories
• Receipt
4. The Property/Supply Division
prepares the Disbursement
Voucher (DV) then forwards
it, together with the
supporting documents, to the
Accounting Division for
processing of payment.
GOVT ACCTG & ACCTG FOR NPOs by: Z.B.Millan