Revenue and

Other
Receipts
 2

Receipts
Revenue
Actual cash allocations
Gross inflow of economic from all sources
benefits or service
during a period
potential during the
reporting period when
those inflows result in an
increase in equity, other
than increases relating to
contributions from
owners
 3

Fundamental principles of revenue

➜ All revenues shall be remitted to the BTr and
included in the General Fund, unless another law
specifically allows otherwise.
➜ All moneys and property received by a public
officer, acting in any capacity or upon any
occasion, shall be accounted for as government
funds and government properly unless another law
specifically states otherwise.
 4

Fundamental principles of revenue

➜ Amounts received in trust and from business-type
activities of the government may be separately
recorded and disbursed in accordance with
relevant rules
➜ Receipts shall be recorded as revenue of Special,
Fiduciary or Trust Funds other than the General
Fund only when authorized by law
 5

Fundamental principles of revenue

➜ A collecting officer shall immediately issue an
official receipt upon collecting a payment of any
nature
➜ Where mechanical devices are used to
acknowledge cash receipts, the COA may approve,
upon request, the exemption from the use of
accountable forms.
➜ Temporary receipts shall never be used to
acknowledge the receipt of public funds
 6

Fundamental principles of revenue

➜ Pre-numbered official receipts shall be issued in
strict numerical sequence.
➜ A collecting officer shall accept payments to the
government in the form checks, upon proper
endorsement and identification of the payee or
endorsee
➜ Receipts of government funds shall be
acknowledged in accordance with the law
 Types of funds
• General Funds
• Special Funds
• Trust Fund
• Revenue Fund
• Depository Fund
• Special Account in the General Fund (SAGF)
• Special Purpose Funds (SPFs)
 8
Sources of Revenue

Non-Exchange
Exchange Transactions
Transactions  Tax revenue
 Sale of goods  Fines and penalties
 Rendering of  Gifts, Donations &
services Goods-In-Kind
 Interest, Royalties &
Dividends
 9

Recognition of revenue
from Exchange
Transaction
 10

Sale of Goods
Revenue from the sale of goods shall be recognized when all
of the following conditions are satisfied:
• Significant risks and rewards of ownership of the goods are
transferred to the buyer;
• The entity does not retain continuing managerial
involvement or effective control over the goods sold;
• It is probable that economic benefits will flow to the entity;
• Revenue can be measured reliably; and
• Costs relating to the transaction can be measured reliably. 
 11

Rendering of Services
Revenue from rendering of services is recognized on a straight
line basis over the contact term.
➜ However, revenue is recognized by reference to the stage of completion
if the outcome of the transaction can be estimated reliably, such as
when all of the following conditions are satisfied:
 The stage of completion can be measured reliably;
 It is probable that economic benefits will flow to the entity;
 Revenue can be measured reliably; and
 Costs relating to the transaction can be measured reliably.
 12

Interest, Royalties & Dividends

Interest
➜ recognized on a time proportion basis that takes into
account the effective yield on the asset;
Royalties
➜ recognized as they are earned in accordance with the
substance of the relevant agreement; and
Dividends
➜ recognized when the entity’s right to receive payment is
established.
.
 13

Measurment of revenue
from Exchange Transaction
 14

 Revenue from exchange transactions are

measured at the fair value of the consideration
received or receivable.
 Any trade discounts and volume rebates shall be
taken into account.
 When cash flows are deferred, the fair value of
the consideration is the present value of the
consideration receivable.
 Exchanges of goods or
services with:
 Similar Nature and Value
- Do not give rise to revenue

 Dissimilar Nature and Value

- Give rise to revenue
 16

Recognition of revenue
from Non-exchange
Transaction
 17

Recognition
Revenue from non-exchange transactions are
recognized on a cash basis until a reliable
measurement model is developed
 Tax Revenue
Type of tax Taxable event
 Income tax  Earning of taxable income
 Value added tax  Undertaking of a taxable
activity
 Goods and  Purchase or sale of taxable
services tax goods or services
 Customs duty  Movement of dutiable goods
or services across the
customs boundary

 Death duty  Death of the owner of the

taxable property
 Property tax  Passage of the time period for
which the tax is levied
 19

Fines and Penalties

 Recognized as income in the year they are
collected.
 Recognized as revenue when the receivable
meets the recognition criteria for asset and are
measured at the best estimate of inflow of
resources to the entity
 20

Gifts, Donations and

Goods In-kind
Recognized revenue when it is probable that
future economic benefits or service potential
will flow to the entity

Services in-kind
Not recognized as revenue
Debt Forgiveness
Recognized revenue equal to the carrying amount
of the debt forgiven

Bequests
Recognized revenue measured at the fair value of
the resources received or receivable

Grant with condition

Recognized revenue only when condition is
satisfied
Illustration
The NG received a foreign grant amounting to P10
million for the construction of a railroad system. Under
the terms of the grant, the construction project shall be
completed within a period of two years from the receipt
of the grant, otherwise, the money shall be returned to
the grantor. The money can only be used as stipulated
and the NG is required to include a note in the financial
statement detailing how the money was spent. The
Department of Public Works and Highways (DPWH)
will be the implementing entity.
 23
➜ Receipt of the Grant
Books of the NG - Cash in Bank-Local Currency,
BTr Bangko Sentral ng Pilipinas 10,000,000
Other Deferred Credits
10,000,000
Books of the Cash-Modified Disbursement
Implementing NGA System (MDS), Special Account 10,000,000
– DPWH Subsidy from National Gov’t
10,000,000
➜ Purchase of construction materials and payment for labor for the construction
of a railroad system amounting to P10,000,000.
Books of the NG - Construction in Progress-
BTr Infrastructure Asset 10,000,000
Cash-Modified Disbursement
System (MDS), Special Account 10,000,000
Books of the Subsidy from National Gov’t 10,000,000
Implementing NGA Cash in Bank-Local Currency,
– DPWH Bangko Sentral ng Pilipinas
10,000,000
 24

➜ Receipt of the report from DPWH for the completion of the

construction of a railroad system amounting to P10,000,000
Books of the NG - Other Deferred Credits 10,000,000
BTr Income from Grants and
Donations in Cash 10,000,000

➜ Turnover and Acceptance of Completed Infrastructure Asset

Books of the Railway System 10,000,000
Implementing Construction in Progress-
NGA – DPWH Infrastructure Asset 10,000,000
Pledges
Not recognized as revenue

Concessionary Loans
The difference between the transaction price and
the fair value of the loans on initial recognition is
recognized as revenue
 26

Measurement of revenue
from Non-exchange
Transaction
 27

Measurement
➜ Assets
– acquisition-date fair value.
➜ Liabilities
– Present value
➜ Revenue
– At the amount of increase in net assets
– If initially recognized as liability,
subsequent reduction in that liability
 28

Impairment Losses and Allowance

for Impairment Losses

When an amount already recognized as

revenue becomes uncollectible, it is
recognized as expense (i.e., impairment loss)
rather than as an adjustment to the revenue
originally recognized.
 29

Other
Receipts
 30
 Subsidy from NG  Recognized as revenue
 Subsidy from other from assistance and
government agencies, subsidy.
including LGUs and
GOCCs
 Receipts from:  Not recognized as revenue.
a. excess cash advance;
b. overpayment of expenses;
c. performance bonds and
security deposits;
d. collections on behalf of
other entities; and
e. inter or intra-agency fund
transfers.
Receipt of NCA 31
 32

Non-Cash Availment Authority

Cash Disbursement Ceiling 33
Cash Disbursement Ceiling 34
Tax Remittance Advice. 35
Tax Remittance Advice. 36
Receipt of Subsidy/Assistance from other NGAs, 37

LGUs, GOCCs and Other Funds

Dishonored Checks 38
 39
Dishonored Checks
 40

Cash Overage/Shortage
 41
Cash Overage/Shortage
 42
Refund of excess cash advances granted to officers
and employees
Advances to Officers and Employees
Advances for Operating Expenses
Advances for Payroll
Advances to Special Disbursing Officer
(SDO)
 43
Refund of excess cash advances granted to officers
and employees
 44
Refund of excess cash advances granted to officers
and employees
 45

Performance bond/security deposits

Refund of overpayment of expenses 46
Collections made on behalf of another entity or non- 47

government/private org
Collections made on behalf of another entity or non- 48

government/private org
Intra-agency fund transfers 49
 50
inter-agency fund transfers