COMMISSION ON AUDIT CIRCULAR NO.

80-92-A September 17, 1980 TO : All Heads of Ministries, Bureaus and Offices of National Government; Managing Heads of Government Owned and/or Controlled Corporations, Boards and Commission; Chief Accountants/Corporate Treasurers; Provincial Governors, City/Municipal Mayors; Local Treasurers; COA Managers/Regional Directors, Auditors and All Others Concerned. Amendment of COA Circular 78-92, to delete from the Standard Government Chart of Accounts (SGCA) the account 3-23-000, pursuant to the provisions of P.D. No. 1421.

SUBJECT :

To conform with the amended definition of current operating expenditures (COE), as embodied in P.D. No. 1421, the Standard Government Chart of Accounts is hereby amended to delete from the account codes 3-23-000, intended for Furniture, Equipment and Books, under the maintenance and operating expenditures of agencies. Henceforth, all furniture, equipment and books the cost of which amount to P300 or more, whose serviceable life is more than one year and which add to the assets of the government, shall be charged to account 4-33-000. Furniture and Equipment Outlay. Thus, the definition for the account 4-33-000, Furniture and Equipment Outlay, is amended to read as follows: "This account includes furniture, equipment and books the cost of which amount to P300 or more, whose serviceable life is more than one year and which add to the assets of the government". As a result of such amendment, properties having value of less than P300 and which are normally consumed within a year shall be classified as supplies and materials. However, for properties having value of less than P300 but with a life expectancy of more than one year, or the benefits from which, last for more than one year, but which will have decreased substantially in their value, i.e., these will have nominal value after being used for only one year, shall likewise be treated as semi-expendable supplies and materials which will be accounted for as follows: To record receipt of semi-expendable supplies and materials upon payment: Dr. 8-72-600 8-86-600 To record disposition: 8-86-600 8-72-600 xx xx xx xx Cr.

These items should be duly covered by Memorandum Receipts when issued for use by the property officer. In view of these, the definitions and instructions of when to debit and credit the accounts 8-72-600 and 8-86-600 are likewise amended and shall read as follows: "8-72-600 Inventories - Semi-Expendable Supplies Containers and Property This account is used to record the cost of semi- expendable supplies, containers and property purchased for use in the course of government operations and charged to appropriation or allotments. It includes containers, acquired after the contents were used such as drums, bottles, etc., which have market value but for which no deposits were paid when the contents were purchased. This has a contra account 8-86-600. Debit this account for: Semi-expendable supplies, containers, furni- ture, equipment and books with a value of not more than P300 each and/or with a life expectancy of more than one year, charged to appropriations. Containers charged to appropriations. Empty containers left after contents were used. Credit this account for: Use, sale and other disposition of the above items. 8-86-600 Miscellaneous Liabilities and Deferred Credits - Semi-Expendable Supplies, Containers and Property This account is used as a contra-account of 8-72-600, representing semiexpendable supplies, containers and property which had already been charged to appropriations. Debit this account for: Loss of semi-expendable items. Use, sale and other disposition of semi-expendable items. Credit this account for: Semi-expendable supplies, containers, furniture, equipment and books with a value of not more than P300 each and/or with a life expectancy of more than one year, charged to appropriations. Containers charged to appropriations. Empty containers left after contents were used".

In the same manner, the definition of 3-07-000, shall also be amended to read as follows: "This account includes the cost of all expendable commodities acquired or ordered for immediate use in connection with government operation. It also includes, but is not restricted to items (1) normally consumed within one year after being put into use, or (2) converted in the process of manufacture or construction, (3) having life expectancy of more than one year but which shall have decreased substantially in value after being put into use in only one year. Examples are: printed forms, pencils, ink pads, soaps, powder, cartridge, cards, ledgers, journals, brooms, paint, brushes, nails, medical supplies, construction materials, semi-expendable property having value of less than P300 and other expendable property consumed in a function, activity or office". This circular shall take effect January 1, 1981. (SGD.) FRANCISCO S. TANTUICO, JR., Acting Chairman