Trial Balance,

Financial Reports &

Statements
 Resolution 2014-003
• Issued by COA
• Dated January 24, 2014
• Adoption of the PPSAS (January 1, 2014)
• To enhance the quality and uniformity in financial reporting
by Philippine public sector entities, and ensuring
accountability, transparency, and comparability of financial
information with other public sector entities around the
world.
 Objectives of General Purpose Financial
Statements
• To provide information about the financial
position, financial performance, cash flows of
an entity, useful information for decision
making and to demonstrate the accountability
of the entity.
 Trial Balance
• Listing of General Ledger accounts with their
corresponding debit and credit balances
• Listed in order of the Revised Chart of
Accounts
• Shows equality of debit and credit balances
 Adjusting Journal Entries
• Made at the end of accounting period
• Two types of adjustments
• Accrued items
• Deferred items
• Other Items
• Unused NCA
• Petty Cash Fund
• Unreleased Commercial Checks
• Allowance of Impairment Losses of Asset accounts
• Depreciation Expenses
• Other Adjustments
 Pre-Closing Trial Balance
• Prepared after posting the adjusting journal entries
• Also called the Adjusting Trial Balance

Post-Closing Trial Balance

• Prepared at the end of the year after preparing and posting the closing
journal entries
 Closing Journal Entries
• These are the entries which close out the balances of all nominal and intermediate
accounts at the end of the year
• The intermediate accounts are:
• Balance of all revenue accounts to the “ Revenue and Expense Summary”
account
• Balance of all expense accounts to the “ Revenue and Expense Summary”
account
• Balance of the “ Revenue and Expense Summary” to the “Accumulated
Surplus/(Deficit)” account
• Balance of all “Cash-Treasury/Agency Deposit, Regular” to the “Accumulated
Surplus/(Deficit)” account
Statement of Management Responsibility for Financial
Statements
• Serves as the cover letter in transmitting the agency's financial
statements to the COA, DBM, other oversight agencies, and other
parties.
• Acknowledges the agency's presentation of the financial
statements.
• Signed by the Director of Finance and Management Office or
Comptrollership office, of the chief of office who has direct
supervision and control over agency's accounting and financial
transactions and the Head of Agency or his/her authorized
representative.
Complete set of Financial Statements
• Statement of Financial Position
• Statement of Financial Performance
• Statement of Changes in Equity
• Statement of Cash Flows
• Statement of Comparison of Budget and Actual
Amounts
• Notes to Financial Statements
 Statement of Financial Position
- a formal statement which shows the financial condition
of the entity at a certain date
• Three elements:
1) Assets
2) Liabilities
3) Equity
 Statement of Financial Position
• Condensed Statement of Financial Position - presents only the
major sub-classification of Statement of Financial Position
accounts in the Revised Chart of Accounts
• Detailed Statement of Financial Position - presents all Statement
of Financial Position accounts in the Revised Chart of Accounts as a
line item in the financial Report
 Statement of Financial Performance

• Shows the result of operations/performance of the

entity at the end of the accounting period.
• All items of revenue and expense recognized in a period
shall be included in surplus or deficit unless a PPSAS
requires otherwise
 Statement of Changes in Net Assets/Equity
• Shows the changes in equity between two accounting
periods reflecting the increase or decrease in the entity’s
net assets during the year.
 Statement of Comparison of Budget and
Actual Amount
• Presentation requires a comparison of budget
and actual amounts arising from execution of
the budget to be included in the financial
statements of entities that are required to, or
elect, to make publicly available their
approved budget, and for which they are,
therefore, held publicly accountable.
 Statement of Cash Flows

• Summarizes the cash flow from operating, investing and financing

activities of an entity during a given period
• Identifies sources of cash inflows
• Cash flows exclude movements between items that constitute
cash or cash equivalents because these components are part of
the cash management rather than operating, investing and
financing activities
 Notes to Financial Statements
• Integral parts of the financial statements
• These provides additional information and help clarify items
presented in the statements
• Provides narrative description or disaggregation of items in the
financial statements
• The notes shall:
• Present information
• Disclose information
• Provide information
 Events After Reporting Date
• Events that occur between the reporting date and the
date when the financial statements are authorized to
issue
• Two types:
• Adjusting events after reporting date – those that provide
evidence of conditions that existed at the reporting date
• Non-adjusting events after reporting date – those that are
indicative of conditions that arose after the reporting date
 Changes in Accounting Policies

• These are specific principles, bases, conventions, rules and practices

applied by an entity in preparing and presenting, financial
statements
• PPSAS 3 provides that an entity shall account for a change in
accounting policy resulting from the initial application of a PPSAS in
accordance with the specific transitional provisions, if any.
• PPSAS 3 further provides that when a change in accounting policy is
applied retrospectively, the entity shall adjust the opening balance of
cash affected and other comparative amounts
 Changes in Accounting Estimates

• According to PPSAS 3, changes in accounting estimates result

from new information or new development and, accordingly,
are not correction of errors
• When it is difficult to distinguish change in accounting policy
from a change in accounting estimate, the change is treated
as a change in accounting estimate.
 Errors
• Errors can arise in respect of the recognition, measurement,
presentation or disclosure of elements of financial statements
• Corrections of errors differ from changes in accounting estimates in a
way that accounting estimates, by their nature, are approximations
that may need revision as additional information becomes known.
• Includes mathematical mistakes, mistakes in applying accounting
policies, oversights or misinterpretation of facts, and fraud.
 Classification of Errors

• Current period errors – committed and discovered within

the same period
• Prior period errors – omissions from, and misstatements
in, the entities’ financial statements for one or more
periods
 Disclosures

1. Events After Reporting Date

2. Changes in Accounting Policy
3. Changes in Accounting Estimates
4. Prior Period Errors
 Interim Financial Statements
• Financial statements that are required to be prepared at any given period
or at a financial reporting period without closing the book of accounts
• Statements are prepared employing the same accounting principles used
for annual reports
• Adjusting and closing journal entries shall be prepared
 Deadline on Submission of Reports
• Provincial Offices and Operating Units
Statement / Report Deadline Submit to
Trial Balances ( TBs)
And 10 days after the Auditor,
Monthly
Supporting Schedules end of the month Regional Accountant
(SSs)
10 days after the Auditor,
Quarterly TBs, SSs, FSs end of the quarter Regional Accountant

On or before January Auditor,

TBs, SSs, FSs
Year-end 20 Regional Accountant
Of the following year
 Deadline on Submission of Reports
• Regional / Branches Offices
Statement / Report Deadline Submit to
Trial Balances ( TBs)
Regional Accountant,
And 10 days after the
Monthly Central Office
Supporting Schedules end of the month
Chief Accountant
(SSs)
10 days after the Regional Accountant,
Quarterly TBs, SDs, FSs end of the quarter Central Office
Chief Accountant
TBs, SSs, FSs On or before January Regional Accountant,
Year-end (combined RO and 31 Central Office
Ous) Of the following year Chief Accountant
 Deadline on Submission of Reports
• Central / Head / Main Office
Statement / Report Deadline Submit to
Trial Balances ( TBs)
And 10 days after the Auditor, DBM,
Monthly
Supporting Schedules end of the month Management
(SSs)
10 days after the
Auditor, DBM,
Quarterly TBs, SSs, FSs end of the quarter
Management

TBs, SSs, FSs

February 14 of the COA Auditor, DBM,
Year-end (combined CO, ROs
following year COA – GAS
and Ous)