Professional Documents
Culture Documents
Note* Ang asset na held for sale, including land, or for investment ay hindi
included sa property, plant and equipment.
Unidentifiable asset
An asset that cannot exist independent of a business as a whole. Example is
goodwill.
Other noncurrent assets
Other noncurrent assets ay ang asset na do not cfit intothe definition ng
noncurrent assetss.
Examples:
a. Long-term refundable deposit
b. Long-term advances to employees
Liabilities
The essential characteristics of a liability are:
a. Present obligation of a particular entity. Ang entity na liable must be
identified. Ang present obligation exists only kung saan ang entity ay
walang alternative but to make sacrifice to settle the obligation.
b. The liability arises from past event. Ang liability ay marerecognize lamang
once na incurred na ito.
c. The settlement of the liability requires an outflow of resources embodying
economic benefits. Ang pagbabayad ng obligation or liability is by
transferring or paglalabas ng resources ng entity.
Current liabilities
PAS 1, paragraph 69 shall classify a liability as current when:
a. Ang entity ay expected na magbabayad ng liability within the entitys
normal operating cycle.
b. The entity holds the liability for the purpose of trading
c. Ang liability ay magdue-due within twelve months after the reporting
period.
d. The entity does not have an unconditional right to defer settlement
of the liability for at least twelve months after the reporting period.
Examples:
o Trade payables and accruals for employee and other operating costs
even if they are settled more than twelve months after the reporting
period.
o Financial liabilities held for trading incurred with an intention na i-
repurchase kaagad or in near term.
Long-term debt currently maturing
PAS 1, paragraph 72, ang liability na magdue-due within twelve months
after the end of reporting period ay classified as current, even if:
a. Ang original term ng liability ay for the period na longer than twelve
months.
b. Ang agreement ng i-refinance or i-reschedule ang payment ng long-
term basis of liability ay completed after the end of reporting period
at bago ma-authorized for issue ang financial statements.
However, if ang refinancing ng long-term basis ay nacomplete lang on or
before the end of the reporting period, ang refinancing ay adjusting
event and will be classified as noncurrent.
Discretion to refinance
PAS 1, paragraph 73, provides that if the entity ay gustong magrefinance ng
obligation for atleast twelve months after the reporting period under an
existing loan facility, ang obligation ay ika-classify as noncurrent kahit pa na
mag-due ito within a shorter period.
Covenants
Covenants are often attached to borrowing agreemets which reperesent
undertakings by the borrower.
These covenants are actually restrictions sa borrower ang mag-undertake pa ng
utang, magbayad ng dividends, maintain specific level of working capital and so
forth.
Under these covenants, if certain conditions related sa borrowers financial
situation are breached or di natupad, ang liability ng borrower becomes payable
in demand.
Classified sya as current because sareporting date ang borrower ay walang
unconditional right na i-revise ang payment schedule for atleast twelve months
after the end of the reporting period.
However, paragraph 75 states that the liability ay calssified as noncurrent if the
lender ay nag-agree on or before the end of the repoting period na magprovide
ng grace period ending atleast twelve months after the end of the reporting
period.
Grace peiod is a period within which a borrower can rectify the breach and during
which the lender cannot demand immediate payment.
Presentation of current liabilities
PAS 1, paragraph 54, provides that as a minimum, the face of the statement of
financial position shall include the following line items:
a. Trade and other payables (accounts payable, notes payable, accrued
interest on note payable, dividends payable and accrued expenses)
b. Current provisions
c. Short-term borrowing
d. Current portion of long term debt
e. Current tax liability
Noncurrent liabilities
The term noncurrent liabilities is also a residual definition.
PAS 1, paragraph 69, simply states that lahat ng liablities na hindi classified as
current liabilities ay classified as noncurrent liabilities.
Examples:
a. Noncurrent portion of long-term debt
b. Finance lease liability
c. Deferred tax liability
d. Long-term obligations to entity officers
e. Long-term deferred revenue
Sabi sa PAS 1, paragraph 56 kapag ang entity ay nagpresent ng current and
noncurrent liabilities as separate classification on the face of statement of
financial position, hindi ika-classify ang deferred tax liability as current
liability.
Working Capital
Ang working capital ay measure ng entitys liquidity, efficiency and its short-term
financial status.
Working capital ay capital ng entity na ginagamit sa day-to-day trading
operations, excess of current assets over current liabilities and the working capital
ratio is current assets divided by current liabilities.
Estimated liabilities (can be classified as current or noncurrent)
Ang estimated liabilities ay obligations na nag-exist at the end of the period which
is yung amount nila ay hindi definite.
Also, ang due date ng liability is not definite and in soe instances, the exact payee
ay hindi rin ma-determine or ma-identify.
But inspite ng pagka- indefinite nito, still ang existence ng estimated liabilities ay
valid and unquestioned.
Examples:
a. Estimated liability for premiums
b. Estimated liability for warranties
c. Estimated liability under customer loyalty program
Technically, an estimated liability ay macoconsider na provision which is both
probable and measurable.
Contingent liability
Ang contingent liability ay ang possible liability that may occur depende sa
outcome ng uncertain future event not wholly within the control of the entity.
Ang contingent liability ay ang present obligation or liability arises from past
event pero hindi ma-recognized dahil hindi sya probable that an outflow
embodying economic benefits will be required para ibayad sa obligation or the
amount of the liability cannot be measured reliably.
The uncertainty relating to future events can be expressed by a ranged of
outcome.
a. Probable. Ang future event is likely to occur. More than 50% likely, meaning
51% and above.
b. Reasonably possible. Ang future event is less likely to occur.
c. Remote. Ang future event is least likely to occur or the chance of the future
events na mangyari ay napakaliit lamang.
Treatment of contingent liability
A contingent liability ay hindi nire-recognized sa financial statements.
However, if ang present obligation ay probable at ang amount ay name-measure
reliably, ang obligation ay hindi contingent liability kundi ire-recognized as
provision.
Ang expense at estimated liability ay dapat i-recordsa pagrecognize ng provision.
Ang contingent liabilities ay maaaring probable or measurable pero hindi
probable at measureable.
Ang contingent liability ay hindi nire-record dahil ito ay maarari lamang i-
disclosed.
Required disclosures are:
a. Brief description of the nature of the contingent liability.
b. Estimates ng financial effects nito
c. Indication na nag-eexist ang uncertainties
d. Possibility of reimbursement
Kapag ang contingent liablity ay remote, di na kailangan ng disclosure.
Contingent asset
Ang contingent asset ay ang possible asset that may arise from past events at ang
maco-confirmed lamang ang existence sa occurrence or nonoccurrence ng one or
more uncertain future events not wholly within the control of the entity.
Ang contingent asset ay usually na galling sa unplanned events na nagbibigay ng
possible inflow ng economic benefits sa entiy.
Treatment of contingent asset
A contingent asset shall not be recognized because this may result to recognition
of income that may never be realized.
A contingent asset ay maaaring i-disclose lamang kung ito ay probable. Pero kung
only possible or remote di ni-rerequire ang disclosure.
Equity
Equity is the residual interest in the asset of the entity after deducting all of the
liabilities.
Ang equity ay nadadagdagan dahil sa kinikita sa operations at contributions ng
may-ari.
Ang equity ay nababawasan dahil sa unprofiatable operations at ditribution sa
may-ari.
Ang term na ginagamit sa reporting ng equity ng entity ay nakabase sa form ng
entity:
a. Owners equity (proprietorship)
b. Partners equity (partnership)
c. Shareholders equity(corporatioons)
Pero pwede naman gamitin mismo ang term na Equity sa lahat ng business entity.
Ang may hawak ng instruments classified as equity at tinatawag na owners.
Shareholders Equity
Shareholders Equity is the residual interest of owners in the net assets of a
corporation measured by the excess of assets over liabilities.
ASSETS
Current Assets
Cash and cash equivalents XX
Financial assets at fair value XX
Trade and other receivables XX
Inventories XX
Prepaid expenses XX
Total current Assets XXX
Noncurrent Assets
b. Account form
It provides information in a horizontal format. Mayroon itong dalawang columns,
na ang asset ay shown sa left side and ang liabilities and equities ay sa right side
ng statement of financial position.
UACS COMPANY
Statement of Financial Position
December 31, 2017