Cash and Cash

Equivalents
 Cash Items

Cash on Hand
currencies
money order
bank drafts Cashier’s check not included:
Certified check NSF or DAIF
Customer’s check postdated
checks stale
Manager’s check
Personal check
Traveler’s check
NSF or DAIF
company's check postdated add back to Cash
stale
Cash in Bank
checking and savings account
silent ✓
compensating balance not legally restricted ✓
legally restricted x
short term loan - CA
long term loan - NCA

deposit in foreign bank not legally restricted ✓

legally restricted x
deposit in closed bank non current asset

same bank cash but deduction

bank overdraft different bank current liability
silent current liability
Cash Fund
Petty cash fund Tax fund
Revolving fund Interest fund
For Operations Change fund Dividend fund
Payroll fund Travel fund

Not For Operations

disbursement:
Sinking fund within 12 months ✓
Pension fund beyond 12 months x
Preference share redemption fund silent x

Plant acquisition fund

Depreciation fund always excluded
Contingency fund
Insurance fund
 Cash Equivalents

3-Month Rule:
from date of acquisition of CE to the date of
maturity of CE.
Time Deposits
Certificate of Deposit
Money Order
Commercial Paper
Treasury Bills
Investment in preference share with redemption date

Other Items:
1. I Owe You (IOUs) – treated as receivables
2. Postage stamps – treated as supplies
3. Credit memo from suppliers – treated as contra purchase account
4. Cash surrender value – treated as investment
5. Investment in shares (equity securities) – treated as investment
 Petty Cash Fund
Cash xx correct value of PCF
Coins and Currencies xx
Replenishment Checks xx Set up PCF xx
CIB xx
Good Employees' Checks xx Disbursement No entry
Good Officers' Checks xx Replenishment Expense xx
Advances to Employees xx CIB xx
xx Increase PCF xx
IOUs CIB xx
VALEs xx Decrease CIB xx
Bad Employees' Checks xx PCF xx
Expenses xx
Unreplenished Vouchers xx
ignore:
Paid Vouchers xx Unused postage stamps
Closed envelope
Total Count / Accountability xx
GL Bal of PCF / Accounted for (xx) deduct:
Opened envelope
Short or Over xx
 Bank Reconciliation
Per Book Per Bank
Unadjusted balance per ledger Unadjusted bal. per bank statement
Add: Credit memos Add: Deposit in transit
Note collected by bank in behalf
Interest earned by bank deposit
Loan proceeds directly credited
Less: Debit memos Less: Outstanding checks
NSF check from customer
Bank service charge
Auto debit agreement
Add: Errors Add: Errors
Overstated disbursements Overstated disbursements
Understated receipts Understated receipts
Less: Errors Less: Errors
Understated disbursements Understated disbursements
Overstated receipts Overstated receipts
Adjusted balance Adjusted balance
 Proof of Cash
CBPM REC DISB CBCM
Per BOOKS xx xx xx xx
Credit memo, PM xx (xx ) - -
Credit memo, CM - xx - xx
Debit memo, PM (xx ) - (xx ) -
Debit memo, CM - - xx ( xx)
Errors x(x) x(x) x(x) x(x)
Adjusted balance xx xx xx xx
Per BANK xx xx xx xx
Deposits in transit, PM xx (xx ) - -
Deposits in transit, CM - xx - xx
Outstanding checks, PM (xx ) - (xx ) xx
Outstanding checks, CM - - xx (xx )
Errors x(x) x(x) x(x) x(x)
Adjusted balance xx xx xx xx
 Proof of Cash
corrected in CM NOT corrected in CM
CBPM REC DIS CBCM CBPM REC DIS CBCM
PM Errors
↑Receipts (xx ) - (xx ) - (xx ) - - ( xx)
↑Disbursements xx ( xx) - - xx - - xx
↓Receipts xx ( xx ) - - xx - - xx
↓Disbursements (xx ) - (xx ) - (xx ) - - (xx )

CM Errors
↑Receipts - ( xx) (xx ) - - (xx ) - (xx )
↑Disbursements - (xx ) (xx ) - - - ( xx ) xx
↓Receipts - - - - - xx - xx
↓Disbursements - - - - - - xx ( xx)
Receivables
 Accounts Receivables

Beginning balance Collections: credit customers

Credit Sales Sales discount (gross method)
Sales discount lost (net) SRA from credit customers
Recovery Recovery if NOT yet included
Dishonored notes Write off
Settlement of accounts by
issuing notes
Gross AR Allowance for Bad Debts
AR per ledger Ending balance
Allowance for Sales Discounts
Allowance for Sales Returns
Allowance for Freight
Amortized Cost
or Net Realizable Value
 Allowance for Bad Debts

Write off Beginning balance

Recovery
Bad debt expense

Ending balance

Method of Recording Method of Estimating

Direct Write Off Allowance Method IS approach BS approach

BDE xx BDE xx % of sales % of AR
AR xx ABD xx Aging of AR

BDE ABD, end

 Receivable Financing

Pledge (general) no derecognition | only disclosure

AR Assignment (specific) notification AR - assigned

Notes payable
xx
(xx)
non-notification Equity in Assigned AR xx
AR - factored xx
Factoring w/o recourse Factor's holdback (xx)
Service fee (xx)
w/ recouse Loss on Interest expense (xx)
factoring Proceeds xx
Loss of recourse obligation
Discounting w/o recourse
derecognized thru NR Discounted account
NR conditional sale
Discounting w/ recourse
no derecognition
secured borrowing
interest MV = FV + interest in full term
Maturity value non-interest MV = FV
Less: Bank discount MV x Discount Rate x unexpired term
Net proceeds xx
Less: CV of NR on discounted date (xx) Loss on Discounting w/o recourse
xx conditional sale
Interest expense secured borrowing
 Notes Receivables

Initial Subsequent
short term face value face value

non-interest 1) cash price equivalent initial measurement

x 1 + effective rate
2) principal x PVF less: principal payment

interest:
realistic face value face value
NOM=EFF

unrealistic 1) cash price equivalent initial measurement

NOM>EFF premium
NOM<EFF discount 2) principal x PVF x 1 + effective rate
+ interest x PVF less: nom int (face x nr)
less: principal payment
 Notes Receivables

Gain or Loss on Sale of PPE Interest Income

Cost of PPE Non-interest bearing CA, beg x EFF
Less: Accum dep.
CA of PPE Realistic nominal FV x NOM
Initial Unrealistic nominal CA, beg x EFF
Down payment
Total consideration
Less: CA of PPE
Gain or loss Interest Receivable

Revenue or Sales Non-interest bearing none

FV of notes receivable Interest bearing FV x NOM

Downpayment
Revenue or sales
 Loan Receivables
Initial Measurement
Method 1 Method 2
Face value PV of Principal
Direct origination cost PV of Interest
Less: Direct origination fee
Initial measurement
Initial measurement

Expected Credit Loss

no significant increase in credit risk
Stage 1 low credit risk
recognize 12 month ECL
significant increase in credit risk but no obj evidence of imp
Stage 2 past due of more than 30 days
recognize lifetime ECL
interest = gross CA
objective evidence of impairment
Stage 3 recognize lifetime ECL
interest = net CA
 Impairment of Loan

Carrying amount xx
Interest receivable - accrued xx
Total amount subject to impairment - old xx
PV of new principal xx if old > new
PV of new nominal interest xx = impairment loss
PV of expected future cash flow - new xx
tested for imp.
Measurement of new receivable xx DI at AC
x 1 + Original effective rate x%
Less: Nominal interest ( xx) DI at FVOCI
Less: Principal payment ( xx) Lease receivables
Carrying amount of LR at year end xx
EI at FVPL
EI at FVOCI
Measurement of new receivable xx
x Original effective rate x% DI at FVPL
Interest income after impairment xx
 Present Value Computation

PV Factor Annuity Due (Payment at Beg)

1. Press [Link] 1. Press [Link]
2. Division sign twice 2. Division sign twice
3. Equal sign - number of period 3. Equal sign x number of period
4. Deduct 1
5. Divide by rate
Ordinary Annuity (Payment at End) 6. Press +/-
1. Press [Link] 7. Add 1
2. Division sign twice
3. Press equal sign Alternative:
4. Press M+ x no. of periods 1. Press [Link]
5. Press MRC 2. Division sign twice
3. Press M+ x number of periods
4. Press MRC
Note:
- if semi annual, period x 2
- exclude period where payment has been made
- if one time payment, PV of 1
Inventories
 Inventory Composition
Inventories
Under Consignment
Finished Goods ✓ Consignor
Work in Process DM, DL, OH sent out, shipped out, out on
Raw Materials factory supplies X Consignee
Supplies office supplies held on, received on
marketing

Goods in Transit inventoriable NOT inventoriable

1. freight in 1. freight out
shipping terms owner 2. insurance during 2. insurance after
delivery delivery
FOB shipping point 3. storage of WIP 3. storage of FG
FOB seller 4. normal spoilage 4. abnormal spoilage
FOB CIF buyer 5. nonrecoverable tax 5. recoverable tax
FOB FAS 6. interest incurred 6. interest incurred
non-routinely routinely manufactured
manufactured 7. commission or
FOB destination 7. commission or advisers fee related to
FOB buyer seller advisers fee sales
FOB ex-ship related to purchase
 Inventory System
Periodic Perpetual
Purchase Purchases xx Inventory xx
AP or Cash xx AP or Cash xx

Sale AR or Cash xx AR or Cash xx

Sales xx Sales xx
Cost of Goods Sold xx
Inventory xx

Sale Return Sales Return xx Sales Return xx

AR xx AR xx
Inventory xx
COGS xx
Inventory, end xx No Entry
Year end Cost of goods sold xx
Adjustment Inventory, beg xx
Purchases xx
Estimated selling price xx A B C
Estimated cost to sell (xx ) Cost xx xx xx
Estimated cost to complete (xx ) NRV xx xx xx
Net Realizable Value xx Lower xx xx xx
NRV of RM or Factory Supplies = Replacement Cost

Allowance Method Direct Method

BI at cost xx BI at LCNRV xx
Add: Net purchases xx Net purchases xx
Less: EI at cost (xx ) Less: EI at LCNRV (xx )
COGS, excluding impairment xx COGS + impairment xx
Add: Impairment of Inventory xx
Less: Gain on Reversal (xx )
COGS + impairment xx
 Inventory Cost Flow
Units Unit Cost In Peso
FIFO Ending Inventory xx
Method Recent Purchase (xx ) x xx = xx
EI from 2nd to last xx x xx = xx
ENDING INVENTORY IN PESO Pxx

Weighted TGAS in peso x EI = EI in peso

Average = ave. unit cost
Method TGAS in units x units sold = COGS

A B C
units unit cost total cost
Moving BI xx xx xx
Average Purchases Add: xx xx xx
Method Total Updated Invty xx C /A xx
Sales Less: (xx ) (updated unit cost) (AxB)
ENDING INVENTORY xx xx
 Gross Profit Method
if silent use:
GPR based on Sales GPR based on Cost
Net sales xx Net sales xx
x 100 - GPR x% - 100 + GPR x%
Cost of Goods Sold xx Cost of Goods Sold xx

Gross Sales - Credit xx Gross Purchases xx

Cash Sales xx Freight in xx
Total Sales xx Purchase discount ( xx)
Sales Return (xx ) Purchase returns (xx )
Net Sales xx Net purchases xx

Beginning inventory xx
Add: Net purchases xx
Less: Cost of goods sold (xx )
Estimated ending inventory xx
Less: LCNRV of actual inventory remaining (xx )
Missing inventory - inventory loss xx
 Retail Method
cost retail
Beginning inventory add add
Purchases add add
Freight in add -
Purchase returns less less
Purchase discounts less -
Purchase allowance less -
Departmental transfer in - debit add add
Departmental transfer out - credit less less
Abnormal losses less less
Mark up - add
Mark up cancellation - less
Mark down - less
Mark down cancellation - add
TOTAL GOODS AVAILABLE FOR SALE xx xx
 TGAS at Retail xx
Sales xx Net Sales (xx )
Sales Returns ( xx) EI at Retail xx
Employee Discounts xx Cost Ratio x%
Normal Losses xx EI at Cost xx
Net Sales xx
TGAS at Cost xx
EI at Cost (xx )
Cost of Goods Sold xx
Cost Ratio
TGAS at Cost
Average Method
TGAS at Retail

TGAS at Cost
LCNRV or Conservative
TGAS at Retail + Mark Down

FIFO Method TGAS at Cost - BI

TGAS at Retail - BI
Property, Plant,
and Equipment
 PPE Acquisition

✓ probable that future economic benefits will flow to the entity

✓ cost can measured reliably

Acquisition cost xx
Directly attributable cost xx
Estimated dismantling cost xx
Initial measurement of PPE xx
only if the entity has present obligation
to dismantle, remove, or restore
 Mode of Acquisition
Cash basis Cash price equivalent
On account List price
Less: Trade discounts
Invoice price
Less: Cash discounts
Lump-sum purchase
All FV is given Allocate to each item based on their:
1. fair value
2. appraised value
3. assessed value
FV of 1 PPE is not given Residual value method
All FV are NOT available All FV is allocated to Land
and NONE is allocated to Building.

Deferred basis 1. Cash price equivalent

2. Present value pf cash flows
 Modes of Acquisition
Issuance of Share 1. FV of PPE received
Capital 2. FV of Shares given up + cash paid
3. Par Value of Shares + cash paid

Donation FV of asset received

1. Shareholder
CR: Donated Capital
2. Non-shareholder
CR: Income (no condition)
CR: Liability (w/ condition)
3. Government
CR: Government Grant

Self Constructed ✓Direct cost of materials

✓Direct cost of labor
✓ Overhead
✓ Borrowing costs
 Mode of Acquisition
Constructed (a) Demolition of old building less sale of scrap
(b) Payment to vacant the building
(d) Construction cost
(e) Excavation cost
(f) Architect cost
(g) Construction & removal of temporary structures
(h) Building permit
(i) Supervision and inspection
(j) Interest incurred (specific borrowings)
(k) Insurance during the construction

Exchange or Trade-in 1. FV of asset given up + Cash paid - received

2. FV of asset received
3. CA of asset given up + Cash paid - received
FV of asset given up or assumed FV xx
CA of asset given up (xx )
Gain or loss on exchange xx
 Directly Attributable Costs
Equipment and Machinery
1. Import duties and non-refundable taxes
2. Freight, delivery, transportation and handling
3. Installation cost
4. Testing cost, net of proceeds
5. Repair or reconditioning prior to use
6. Registration cost
7. Site preparation
8. Professional fees
9. Cost of safety platforms and other devices needed prior to use

Building
1. Options acquired
2. Unpaid mortgage assumed
3. Unpaid taxes assumed (before acquisition)
4. Professional fees
5. Remodeling (repairs) prior to usage
 Directly Attributable Costs
Land
1. Options acquired
2. Unpaid mortgage assumed
3. Unpaid taxes assumed (before acquisition)
4. Professional fees
5. Title search, legal fees, title guarantee cost
6. City assessments
7. Cost of grading, leveling, surveying
8. Payment to vacant the land prior to construction
9. Demolition cost (if no building was constructed )

Land Improvements
1. Landscaping, trees, and scrubs
2. Permanent fences
3. Water systems
4. External driveways, parking lots, and safety lightings
5. Sidewalks and pavements
 Borrowing Cost

Specific Borrowing
Principal amount xx
x Interest rate x%
Combination of Specific and General
Interest incurred xx
Investment income (xx ) WAVE expenditure xx
Borrowing cost xx Principal of SB (xx )
Expenditures financed by GB xx
General Borrowing Borrowing cost from SB xx
Lower of: Borrowing cost from GB xx
Ave. Expenditure xx Total borrowing cost xx
x Ave. Capitalization Rate x%
x Construction Period x/x
or
Actual borrowing cost xx
 Borrowing Cost
Average Expenditures
no. of mos. outstanding
Expenditure x
no. of mos under construction during the yr
Average Interest Rate
Total annual interest of all general borrowings
Total principal of all general borrowings
Interest Expense
Total annual interest xx
Less: Capitalizable borrowing cost (xx )
Interest expense xx

Construction cost xx
Total Borrowing cost xx
Capitalized cost of building xx
 Depreciation

Cost of PPE - Residual Value

Straight-line Method
Useful Life

Initial cost of PPE - Accum. Dep

Double Declining Method
x 2 /useful life

Cost - Residual Value x Remaining Life

Sum of Years Digit
Useful life x (Useful Life + 1 ) / 2

Depreciable Cost
Output Method x Actual Output
Total Estimated Output
 Depletion
Acquisition cost of the land xx
Exploration cost xx
Development cost xx
Present value of restoration cost xx
Initial carrying amount of wasting asset xx
Residual value (est. SP at end of life ) ( xx)
Depletable amount xx

Succesful Cost Method successful capitalized

not successful expensed
Full Cost Method succesful or not capitalized

Depletion of the year

Depletable amount
Original est. number of output = Depletion Rate x Actual Output
 Depletion
w/ alternative use straight-line
PPE
life of PPE SL method
w/o alternative use shorter
life of mine output method
New Depletion Rate if:
Initial measurement xx
1. Addtl development cost xx
Accum. depletion cost ( xx)
CA at the date of change in estimate xx
2. New residual value ( xx )
Remaining depletable amount xx
3. - Revised est. remaining output xx
New Depletion Rate x%
Actual Output xx
NEW DEPLETION xx
 Impairment of ❌Asset ✔

initial
increase
from CV

COST MODEL CV

✔ ✔ ✔
Impairment Recovery until Recovery beyond
Loss CV had no IL CV had no IL
initial
increase
from CV

CV REVALUATION
MODEL
Impairment Recovery until Recovery beyond
Loss CV had no IL CV had no IL
 Impairment of Asset
Decrease in Value of PPE

Cost Model Revaluation Model

IMPAIRMENT LOSS previously NOT prev
revalued revalued
1. DEDUCT TO RS IMPAIRMENT LOSS
2. IMPAIRMENT LOSS
FV less Cost to Sell
Carrying amount of PPE xx
Less: Recoverable amount ( xx ) higher
PV of annual net cash flow xx
Impairment loss xx PV of Residual Value xx
Value in Use xx
New CA of PPE
= New Depreciation Expense
Rem. Useful Life
 Reversal of Impairment Loss

New CA after impairment xx

Subsequent new dep'n ( xx)
CA on date of reversal xx
CA on date of reversal xx
Reversal limit (xx )
Gain on Reversal xx
New Recoverable Amount xx
CA > LIMIT = NO REVERSAL CA if no impairment xx
Reversal limit ( lower) xx
CA < LIMIT = WITH REVERSAL

Initial measurement xx
Accum. Dep at reversal date ( xx)
CA if no impairment xx
 Revaluation of Asset
Increase in Value of PPE

Cost Model Revaluation Model

impaired NOT impaired impaired NOT impaired
before before before before
with limit do NOT without limit
record
gain on reversal 1. gain on reversal reval surplus
2. reval surplus

Depreciated replacement cost (FV or sound value ) xx

Carrying amount at the date of revaluation (xx )
Revaluation surplus, pretax xx
x 100-Tax Rate ( if given) x%
Revaluation surplus, after tax xx
 Revaluation Model
Proportionate Method
restated proportionately with the change in the
gross CA so that the CA of the asset equals its RA
Accum Dep'n on
Accum Dep'n
Revaluation Date Revalued A. Depn → %
Depreciable Cost
Elimination Method
eliminated against the gross CA and the asset
account is restated to its RA
Revalued A. Depn → 0

AS THE ASSET IS USED

Transfer of Rev Surplus allocate RS to RE over the useful life of the asset
to Retained Earnings
UPON DERECOGNITION OF ASSET
transfer the balance of the RA to RE when the
related asset is derecognized
 Cash Generating Unit

Asset X
Asset Y Total CA - Total RA = Impairment Loss
Asset Z
allocate
FVINA < Consideration Paid
Exhaust 100% first Goodwill

CA of Asset - RA or LCNRV Assets obviously impaired

= Own impairment

Impairment x CA of Individual Asset

CA of Other Assets in CGU Other assets
Agriculture
 PAS 41 - Agriculture
Included: Price - market xx
1. living animals and plants, except bearer plants Costs to bring to market (xx)
2. bearer animals Price - farm xx
3. agri product at the point of harvest Cost to sell (xx)
4. plants with dual use
5. unconditional grants related to BA FV Less Cost to Sell xx
Excluded:
1. bearer plants - PAS 16 PPE transfer taxes
2. agri produce processed - INVENTORY levies
3. animals in recreational activities- PAS 16 PPE
commission
point of processed point of processed
harvest for sale harvest for sale

tree fruit fruit shake cow milk cheese

PPE (PAS 16) AP (PAS 41) Invty (PAS 2) BA (PAS 41) AP (PAS 41) Invty (PAS 2)
Cost or Reval FVLCTS LCNRV FVLCTS FVLCTS LCNRV

Beg age @ Beg price price change

total change Beg age @ End price
End age @ End price physical change
FVLCTS of Newborn
Intangible
Assets
 Composition
Include: Other
1. Patent 1. Goodwill
2. Franchise 2. Customer list
3. Trademark 3. Brands
4. Copyright 4. Mastheads
5. Licenses integral part - PPE 5. Secret formula or recipe
6. Computer software internal + after TF - IA 6. Production Backlogs
7. Website reproduced - INVTY
solely for ads - EXP if purchased (silent: )
not solely for ads - IA INCLUDE

Exclude: if internally generated:

EXCLUDE
1. Organizational cost start-up cost
2. Prepaid expenses Research and Development
3. Discount and premium on bonds GR: expense
4. Leasehold improvement 1. purchased
5. Continuing franchise fee 2. from buscom IA
6. Cost of defending the intangible asset 3. tech feasibility
 Research and Development
RD IA INV
tech fs sale

Research to discover new knowledge to be used in developing

new products or improving existing products
Development application of new knowledge
Probable future economic benefits
Intention to complete and use or sell
Resources adequate and available
Ability to use or sell the asset
Technical feasibility
Expenditures realiably measureable
with alternative use dep'n RD expense
PPE CA PPE
without alternative use cost immediately expensed as RD
 Amortization
Life of Intangible Asset
definite indefinite

Initial measurement xx no amortization

- UL or rem. legal life (shorter) xx
Amortization expense xx X - Acc Dep - Acc Amort = CA
cost model = cost
revaluation model = FV
Franchise
TOTAL EXPENSES

Continuing franchise fee

Int exp on notes issued Patent
Amortization expense Cost of litigation , succesful or not
Impairment loss, if any Amortization expense for the year
Impairment loss, if any
Other IA RD expense related
Amortization expense
Impairment loss
Investments
 Classification of Equity Securities

no control yes
alone?
PFRS 3
joint Bus Com
no control? yes Inv in Subsidiary
PFRS 2:
significant Joint Arrangement
no influence? yes Inv in Joint Operation
Inv in Joint Venture
PFRS 9 IAS 28
Fin Instrument Inv. in Assoc

yes held for elects yes carry at FVOCI

FV? trading? no FVOCI?
no
yes no
Inv in Unquoted ES carry at FVPL
 Investment in Equity Securities

TRADING NONTRADING UNQUOTED

initial fair value FV + trans cost Purch Price + TC

fair value fair value cost less impair loss

subsequent
FV → PL FV → OCI N/A

dividends income income income

sale G/L → PL Accum UGUL → RE G/L → PL

Dividend income Dividend income

To PL Transaction cost Dividend income GL on sale
GL on sale Impairment loss
 Investment in Equity Securities
declaration record settlement
div-on ex-div purchase price = fair value
deduct to purch price

FVPL FVOCI
FV, ending xx
UGUL - SPL FV, beginning ( xx ) N/A
Unrealized GL - PL xx
FV, ending xx
UGUL - SOCI N/A FV, beginning (xx )
Unrealized GL - OCI xx
FV, ending xx
UGUL - SFP N/A Initial msrmt. (xx )
Unrealized GL - OCI xx
UGUL - PL xx
UGUL - SCI UGUL - OCI xx
Unrealized GL - SCI xx
 FVPL FVOCI
Selling price xx
GL on Sale CV at date of sale xx )
( N/A
GL on sale xx
CV = FV of last year end 1. update the FV
2. derecognize
deduct dividend-on 3. transfer OCI to RE
type of dividend msrmt. of dividend income Selling price xx
Initial msrmt. (xx)
cash face value Transferred to RE xx
property fair value at date of declaration no effect on total no. of shares↑
value of investment value of shares↓
share in lieu of cash 1. fv of shares at date of decl.
2. cash that shouldve been received 1. assume shares will be received.
2. assume it will be sold.
3. recognize GL on assumed sale
share or bonus issue different class:
Total value of investment xx
1. original shares @fv -No. of share after share div. xx
Updated value of each share xx
2. share dividend @fv
Cash div in lieu of share div xx
share split same class: memorandum only Share div x Updated Value (xx )
GL on assumed sale xx
cash in lieu of share zero
Dr. Cash xx
liquidating zero Cr. Investment xx
 Bonus issue or Share Split
carrying value per share changes = total carrying value in peso
old shares + additional shares

Share rights
✓ pre-emptive right to maintain his ownership percentage

subscription price
accounted for w/ FV? + fv of share rights exercised
separately? cost of new investment

theoretical/parity
no journal entry market value method

rights on = fv of SR on - subsc price

declaration record settlement
# of rights to purchase + 1
rights-on ex-rights fv of ex SR - subsc price
ex rights =
# of rights to purchase
 Investment in Associate
CA, beg ( purchase price) xx Net income per book xx
Investment income xx Less: Amort'n of excess FV (over) ( xx)
Add: Amort'n of excess CA (under) xx
Dividend received (xx ) Less: Intercompany gains (xx )
SOCI - gain xx Add: Intercompany losses xx
SOCI - loss ( xx) Less: Amort'n of intercom losses (xx)
Impairment loss ( xx) Add: Amort'n of intercom gains xx
xx Adjusted net income xx
Carrying amount, end Less: Preference dividends (xx)
Net income to ordinary shareholders xx
x Percentage of ownership xx%
Purchase price xx x Ratio of months as owner / 12 x/12
FV of net assets acquired (xx ) Share in net income
Gain on bargain purchase
xx
xx
Goodwill / Gain on BP xx/ (xx ) Investment income xx

Preference Dividends Amortization

depreciable non-depreciable
cumulative non-cumulative
every year one time
Par value of PS declared not declared
x Dividend rate excess whole excess
One basic dividend actual zero remaining life on the date
dividends it was sold
 ❌

Share in Net Loss Investee with Heavy Losses

1. investment in ordinary shares
2. investment in preference shares
3. loans or advances to associate
CA
Resume
Share in Net Income recognizing NI
1. loans or advances to associate Net Loss Subsequent Net
2. investment in preference shares Income until no
3. investment in ordinary shares unrecognized NL

Discontinuing the Equity Method

Net proceeds xx Share in NI until date of sale xx
CA of investment sold (xx) Dividend income after sale xx
Gain or loss on sale - PL xx Gain or loss on sale xx
Gain or loss on remeasurement xx
FV or retained investment xx Total income during the year xx
CA of retained investment (xx)
Gain or loss on remeasurement xx accounted for as FVPL, FVOCI, or Cost
 Investment in Debt Securities

FVPL FVOCI AMORT COST

initial fair value FV + trans cost FV + trans cost

fair value fair value - Initial msrmt.

subsequent + Discount amortn
FV → PL FV → OCI - Premium amortn
- Impairment loss
interest face x nr amort cost x er amort cost x er
income
interest face amount x nominal rate x no. of months unpaid over 12
receivable

gl on sale Selling price Selling price Selling price

- FV at last yr end - AC at date of sale - AC at date of sale
 Investment in Debt Securities

PV of Principal xx term serial

PV of Interest xx principal pv of 1 pv of annuity
Purchase price xx interest pv of annuity pv of 1

FVPL FVOCI IAC

FV, ending xx
UGUL - SPL FV, beginning ( xx ) N/A N/A
Unrealized GL - PL xx

FV, ending xx
UGUL - SFP N/A AC, ending (xx ) N/A
Unrealized GL - BS xx

UGUL - BS, beg xx

UGUL - SOCI N/A UGUL - BS, end (xx ) N/A
Unrealized GL - OCI xx
 Reclassification of Debt Securities
✓ Only when there is change in business model
✓ Done prospectively from the reclassification date
1st day ofthe reporting period ff. the reclassification date

from: FVPL FVOCI IAC

initial CV fair value fair value
GL on reclass none none
amortization NI - EI NI - EI
interest income EIR based on new ER EIR based on new ER
subsequent CV fair value amortized cost
UGUL, current period OCI section of SCI none
UGUL, ending balance SHE section of SCI none
 Reclassification of Debt Securities
from: FVOCI FVPL IAC
initial CV fair value amortized cost
cumulative UGUL transferred to PL adjusted against FV
amortization none NI - EI
interest income nominal interest EIR based on orig ER
subsequent CV fair value amortized cost
UGUL, current period PL section of SCI none
UGUL, ending balance none none

from: IAC FVPL FVOCI

initial CV fair value fair value
gl on reclass PL OCI
amortization none NI - EI
interest income nominal interest EIR based on orig ER
subsequent CV fair value fair value
UGUL, current period PL section of SCI OCI section of SCI
UGUL, ending balance none SHE section of SCI
 Investment Property
included: Initial measurement: at cost
capital appreciation ✓ purchase price
undetermined future use
potential plant site import duties
non refundable taxes
leased out under operating lease less: trade discounts
leased out to subsidiary in the separate FS
constructed or developed as IP ✓ directly attributable costs
employee benefits
excluded: professional fees
installation cost
production or administrative purposes freight cost
owner occupied site preparation
constructed or developed as owner-occupied
leased out as finance lease Dual purpose
operating lease to subsidiary in the conso FS
operating lease to employees at or below ✓ can be split
market rent owner occupied: PPE
constructed in behalf of third party operating lease: IP
for sale
hotels can't be split:
machineries, equipment, furniture, fixtures OWNOCC insignificant: IP
significant: PPE
 Cost Model FV Model

Cost - same rule as PPE Fair Value

subsequent Less: Accumulated depreciation at the date of question
Carrying amount

Cost
Less: residual value
depreciation Depreciable cost N/A
- Useful life
Depreciation expense

FV, ending
GL on FV N/A Less: FV, beginning
Gain (loss) in change in FV

Carrying amount
Impairment Less: Recoverable amount N/A
Impairment loss
 Transfers

Only when there's change in use

✓ IP to PPE: commencement of owner occupation
✓ PPE to IP: end of owner occupation
✓ IP to INVTY: commencement of development with view of sale
✓ INVTY to IP: commencement of operating lease to another party

from to initial change in fv

Cost IP PPE/INVTY carrying amount none

Model PPE/INVTY IP carrying amount none
IP PPE/INVTY fair value P/L
Fair Value PPE IP fair value RS (OCI) / Loss (P/L)
Model
INVTY IP fair value P/L
 Other Investments
Long Term Fund Investment
Beginning balance Fund expenses
Set up or additional investments Use of funds
Fund or investment income Reversal to cash of any excess fund

Ending balance
other than insurance expense
Entity insures entity
the life of its beneficiary
key officers
entity cash surrender value
Premiums paid xx
Dividends earned xx Proceeds from insurance xx
Increase in CSV (xx ) Less: CSV (xx )
Life insurance expense xx Less: Unexpired premium (xx )
x Expired portion x/12 Gain on settlement xx
LIE at settlement date xx
NCA Held for Sale
and Discontinued
Operations
 NCA Held For Sale
w/in the scope of IFRS 5 Step 1: Initial
lower of FVLCTS
✓ PPE CA on date of reclass
✓ intangible assets If CA > FVLCTS = impairment loss
✓ IP using cost model
Step 2: Subsequent
X IFRS 9 FVLCTS at year end
X deferred tax asset lower of CA, beginning
X IP using FV model No amortization and depreciation

Step 3: Reclassification back Initial msrmt Impairment loss

Reversal of IL
RV higher VIU CA at year end
FVLCTS
lower IL at reclass xx
IL at year end xx
CA cost less acc depn Total IL for the year xx
Step 3: If sold
Initial measurement Selling price xx
Less: CA before reclass CA of NCA HFS (xx)
Gain or loss on reclass back Gain or loss on sale xx
 Discontinued Operations

✓ separate from continuing operation CA

✓ single amount reported in PL
✓ net of tax Impairment Recovery until Recovery beyond
Loss CV has no IL previous IL

Revenue xx
Expenses xx
PL - Ordinary activities xx
Relocation or Termination Costs xx
Gain or Loss on Sale ( sold during the period ) xx
Impairment loss or Recovery (unsold at BS date ) xx CA > FVLCTS = impaired
PL from discontinued operations, before tax xx
Income tax expense or benefit xx
PL from discontinued operations, after tax xx

PL from continuing operations, net of tax xx

PL from discontinued operations, net of tax xx
Total profit or loss xx