STATEMENT OF MANAGEMENTS RESPONSIBILITY FOR FINANCIAL

STATEMENTS

The management of ABC DEVELOPMENT COOPERATIVE is responsible for all

information and representations contained in the financial statements for the years
ended December 31, 2009 and 2008. The financial statements have been prepared
in conformity with Financial Reporting Standards applicable for Cooperatives in the
Philippines and reflect amounts that are based on the best estimates and informed
judgment of management with an appropriate consideration to materiality.
In this regard, management maintains a system of accounting and reporting which
provides for the necessary internal controls to ensure the transactions are properly
authorized and recorded, assets are safeguarded against unauthorized use or
disposition and liabilities are recognized.
The Board of Directors the financial statements before such statements are
approved and submitted to the members of the cooperative.
Xxx, the independent auditor and appointed by the board of Directors, has
examined the financial statements of the cooperative in accordance with the
Philippines Standards on Auditing and the Standard Audit Systems for Cooperatives
and has expressed her opinion on the fairness of presentation upon completion of
such examination, in her report to the members of the cooperative.

________
Chairman

CEO/General Manager

Treasurer

STATEMENT OF REPRESENTATION
TO THE COOPERATIVE DEVELOPMENT AUTHORITY:
In connection with my examination of the financial statements of the ABC
DEVELOPMENT COOPERATIVE covering the period ended December 31, 2009 that
are herewith submitted to the Cooperative Development Authority, I hereby
represent the following:
1. The said financial statements herewith attached are prepared and presented
in conformity with the financial reporting standards applicable to
cooperatives in the Philippines;
2. That in the conduct of my audit, I adhere to the Philippine Standards on
Auditing and the Standard Audit System for Cooperatives (SASC) as required
by the Cooperative Development Authority;
3. That I am qualified as provided for in Section 8 of the Code of Professional
Ethics for Certified Public Accountants and Article 81 of R.A. No. 9520
(Cooperative Code of the Philippines);
4. That I am fully aware of my responsibility as an independent auditor for the
audit report issued and attached to the financial statements and the
sanctions to be bestowed on me for my representations that I may have
willingly or unwillingly committed;
5. That I or any member of my immediate family do not have any direct or
indirect financial interest with the cooperative;
6. That I am not an employee or an officer of a secondary cooperative or tertiary
cooperative of which this cooperative is a member;
7. That I am not an employee of the Cooperative Development Authority nor
have I engaged an employee of the CDA in the course of audit;
8. That I make representation in my individual capacity;
9. That I am a member of the __________Chapter of the PICPA.
It is however, understood that my accountability is based on matter with the normal
coverage of an audit conducted in accordance with Philippine Standards on Auditing
and the Standard Audit Systems for Cooperatives.
Name of auditor
CPA Reg. No.
BOA Reg. No. TIN No.
PTR No.
CDA Registration No.
Date

INDEPENDENT AUDIT REPORT

TO THE BOARD OF DIRECTORS
ABC DEVELOPMENT COOPERATIVE
TOWN, PROVINCE

We have audited the accompanying financial statements of ABC DEVELOPMENT

COOPERATIVE, which comprise the statements of financial condition as at December
31, 2009 and 2008, and the statements of operations, statements of changes in
equity and statements of cash flows for the years then ended, and a summary of
significant accounting policies and other explanatory notes.
Managements Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these
financial statements in accordance with Financial Reporting Standards applicable to
Cooperatives in the Philippines, taking into consideration Cooperative laws, rules,
regulations and principles. This responsibility includes: designing, implementing
and maintaining internal control relevant to the preparation and fair presentation of
financial statements that are free from material misstatements, whether due to
fraud or error, selecting and applying appropriate accounting policies; and making
accounting statements that are responsible in the circumstances.
Auditors Responsibility
Our responsibility is to express an opinion on these financial statements based on
our audit. We conducted our audit in accordance with Philippine Standards on
Auditing. Those standards require that we comply with ethical requirements and
plan and perform the audit to obtain reasonable assurance whether the financial
statements are free from material misstatements.
An audit involves performing procedures to obtain audit evidence about the amount
and disclosures in the financial statements. The procedure selected depend to the
auditors judgment, including the assessment of the risks of material misstatement
of the financial statements, whether due to fraud or error. In making those risks
assessments, the auditor considers internal control relevant to the entitys
preparation and fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion of the effectiveness of the entitys internal control. An audit
also includes evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by management, as well as
evaluating the overall presentation of the financial statements. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.

Opinion
In our opinion, the financial statements present fairly, in all material respects, the
financial position of ABC DEVELOPMENT COOPERATIVE as of December 31, 2009 and
2008, and of its financial performance, changes in equity, and its cash flows for the
years then ended in accordance with Financial Reporting Standards applicable to
Cooperatives in the Philippines, taking into consideration Cooperative laws, rules,
regulations and principles.
xxxName of CPA
CPA Reg. No.
BOA Reg. No. TIN No.
PTR No.
CDA Registration No.
Date

ABC DEVELOPMENT COOPERATIVE

XXX TOWN , PROVINCE
NOTES TO FINANCIAL STATEMENTS
As of December 31, 2009
(Amounts in Peso)

1. GENERAL INFORMATION
The ABC DEVELOPMENT COOPERATIVE (referred hereinafter as Cooperative)
was registered as a cooperative pursuant to RA 9520 for the purpose of
encouraging thrift and granting loans to members for productive, educational
and providential purpose, providing goods and services and other requirements
of the members, among others. The Cooperative adopted its current name as
per amended articles of cooperation as well as by-laws during the Cooperatives
General Assembly held las_________.20__. Its former name is ABC Credit
Cooperative, Inc.
The Cooperatives new name was granted the CDA Registration No. LGA-xxxxx
last August 17,1995. Under the RA 9520, the cooperative is exempt from
payment of income and sales taxes, provided that a substantial portion of its net
income is returned to members in the form of interest and or patronage refunds.
ADD: Cooperative Identification No.
Coperative was issued a Certificate of Good Standing dated____
The area of operation of this cooperative includes_________ and its principal office
is located at___________ Town, province.
The financial statements of the cooperative for the year ended December 31,
200_ were authorized for issued by the Board of Directors on xxx,20__.
2. SUMMARY OF SIFNIFICANT ACCOUNTING POLICIES
To facilitate the understanding of the financial statements, the more significant
accounting policies and practices of the Cooperative are summarized as follows:
Basis of Preparation/Partial Adoption of New/Revised Philippine
Accounting Standards

The financial statements have been prepared in conformity with Financial

Reporting Standards applicable to the Philippine Cooperatives
PAS 1 -

Presentation of Financial Statements

PAS 8 -

Accounting Policies, Change in Accounting Estimates and Errors

PAS 10

Events after Balance Sheet Date

PAS 16

Property, Plant and Equipment

PAS 19

Employee Benefits

PAS 21

The Effects of Changes in Foreign Exchange Rates

PAS 24

Related Party Transactions

PAS 36

Impairment of Assets

PAS 41

If producers and agriculture type of coop

PAS 2

Inventories

PAS 7

Cash Flow Statements

PAS 18

Revenue

PAS 38

Intangible Assets

PAS 32,39

for credit coops

PAS 40

Investment Property

PAS 1

Presentation of Financial Statements

Provides framework of financial statements presentation. It requires more

specific balance sheet line items tax liabilities, provisions, non-current interest
bearing debt, among others; financial statements must be comparative; and, has
a number of new disclosure requirements. The standard also requires
presentation of comparative information.
PAS 8
and Errors

Accounting policies, Changes in Accounting Estimates

The standard is applied in selecting and applying accounting policies, and

accounting for changes in accounting policies, changes in accounting estimates
and correction of prior period errors.
PAS 10

Events after Balance Sheet Date

The standard is applied in the accounting for, and disclosure of the events after
balance sheet date.
PAS 16

Property, Plant and Equipment

PAS 16 (a) provides additional guidance and clarification on recognition and

measurement of property, plant and equipment; requires capitalization of the
cost of asset dismantling, removal or restoration; and requires measurement of
an item f property and equipment acquired in exchange for a non-monetary
asset or a combination of monetary and nonmonetary assets at fair value, unless
the exchange transaction lacks commercial substance. The standard also
provides guidelines for derecognition. (disposal).
PAS 19/IAS 19 -

Employee Benefits

Prescribes the accounting and disclosure for employee benefits, including shortterm benefits (wages, annual leave, sick leave, annual profit-sharing bonuses,
and non-monetary benefits); pensions, post-employment life insurance and
medical benefits other long-term employee benefits (long-service lease,
disability, deferred compensation, long-term profit sharing and bonuses, and
equity compensation).
PAS 21/IAS 21 -

The Effects of Changes in Foreign Exchange Rates

Provides certain restrictions in allowing the capitalization of foreign exchange

differentials. Under prevailing circumstances, the adoption will not have a
material effect on the Companys financial position, results of operations and
cash flows in year________.
PAS 24

Related Party Transactions

This standard applies in: (a) identifying related party relationships transactions;
(b) identifying outstanding balances between an entity and its related parties;
identifying the circumstances in which disclosures to be made about these items.
PAS 36

Impairment Assets

This standard applies in accounting for impairment of assets other than those
covered by separate standards.
PAS 41

Agriculture

Prescribes the accounting treatment, financial presentation and disclosures for

agricultural activity.
PAS 2

- Inventories

Prescribes the accounting treatment for inventories.

PAS 7

Cash Flows

Prescribes the provision f information about the historical changes in cash and
cash equivalents of an entity by means of a cash flow statement which classifies
cash flows during the period from operating, investing.
PAS 18

Revenue

Prescribes the accounting treatment for revenue arising from certain types of
transaction and events.

PAS 38

Intangible Assets

Prescribes the accounting treatment for Intangible Assets not dealt with
specifically in another Standard.
PAS 32, 39

Financial Instruments

Prescribes the accounting treatment, presentation and ______________ for credit

coops disclosure requirements for Financial Instruments.
PAS 40

Investment Property

Prescribes the accounting treatment and disclosure requirements for Investment

Property.

Managements Use of Judgments and Estimates

The financial statements are prepared in conformity with the above-mentioned

accounting principles accepted in the Philippines which requires management to
make estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Those estimates and
assumptions used in the financial statements are based on managements
evaluation of relevant facts and circumstances as of date of the financial
statements. Actual results could be differ from such estimates.
The key estimates/assumptions concerning the future that have a significant risk
of causing a material adjustment to the carrying amounts of assets and liabilities
within the next financial year are discussed below:
Estimated Useful Lives
The useful life of each of the Cooperatives property or equipment is estimated
based on the period.
Asset Impairment
PFRS requires that an impairment review be performed when certain impairment
indicators are present. Determining the value of property and equipment, which
require the determination of future cash flows expected to be generated from
the continued use and ultimate disposition of such assets, requires to
Cooperative to make estimate and assumptions that can materially affect its
statement of assets, liabilities and stockholders equity. Future events could
cause the Cooperative to conclude that the property and equipment are
impaired. Any resulting impairment loss shall be charged to operations.
Functional and presentation Currency
Items included in the Cooperatives financial statements are measured using the
currency of the primary economic environment in which the entity operates (the

functional currency). The financial statements are presented in Philippine

Peso, which is the Cooperatives functional and presentation currency.
Revenues Recognition
Revenue is recognized when it is probable that the economic benefits associated
with the transaction will flow to the Cooperative and the amount of revenue can
be measured reliably. Revenues from transactions of the Cooperative are
recognized on a modified accrual basis.
If you are using the above do not use PAS 18, use only PAS 18 if you use full
accrual.
Cash and Cash Equivalents
Cash includes cash on hand and in banks. Cash equivalents are short-term,
highly liquid investments that are readily convertible to known amounts of cash
and with original maturities of three months or less and that are subject to an
insignificant risk of change in value.

Financial Assets Receivables

Receivables, if any, are valued at face value, net of allowance for doubtful
accounts and any anticipated adjustments that will reduce the amount to its to
its estimated realizable value. The allowance for doubtful accounts is
determined after a study of the estimated collectability of the receivable balance
and evaluation of such factors as aging of the accounts, collection expense of
the Cooperative in relation to the particular receivable, past and expected loss
experience and identified doubtful accounts.
Note: If coops has more types of financial assets, use disclosures as stated in
separate sheets in this file.
Inventories
Inventories are assets which are held for sale in the ordinary course of business,
in the process of production for such sale or in the form of materials or supplies
to be consumed in the production process or in the rendering of services.
Inventories are valued at the lower of cost and net realizable value.
Note: if producers and agricultural type, use PAS 41 as reference (agriculture)
Property and Equipment
Property and Equipment are carried at cost less accumulated depreciation and
impairment in value. Depreciation is computed using the straight-line method
over the estimated useful lives of the properties.
Land Improvements
Building

Office Equipment
Office Furniture and Fixture
Transportation Equipment
Consumer Equipment
Financial Liabilities
Financial liabilities include bank loans, trade and other payables, as well as
Interest on Share Capital and Patronage Refund Payable to the Cooperatives
members. These are recognized when the cooperative becomes a party to the
contractual agreements of the instrument. All interest related charges are
recognized as Statement of Operations under the caption Finance Costs.
Trade payables are recognized at their nominal value. Interest on Share Capital
and Patronage Refund payable are recognized as financial liabilities based on the
Cooperatives By-Laws as well as Cooperative principles and policies
Financial liabilities are derecognized from the balance sheet only when the
obligations are extinguished either through discharge, cancellation or expiration.
Impairment of Assets
The carrying amounts of the Cooperatives non-current assets are reviewed at
each balance sheet date to determine whether there is any indication of
impairment. If any of such indication exists, the assets recoverable amount is
estimated.
An impairment loss is recognized whenever the carrying amount of an asset r its
cash-generating unit exceeds its recoverable amount.
Costs and Expenses
Costs and expenses, not directly attributable to capitalizable assets or projects,
are recognized and charged to operations as incurred.
Accounting Expenses
The preparation of financial statements in accordance with accounting principles
generally accepted in the Philippines requires the Cooperative to make estimates
and assumptions that affect the reported amounts on income, expenses,
resources, liabilities and disclosure of contingent resources and liabilities. Actual
results could differ from those estimates.
ACCOUNTS PECULIAR TO COOPERATIVE
The following accounts are peculiar to a Cooperative due to its nature as well as
adherence to Cooperative laws, issued policies, rules and regulations, as well as
cooperative principles and practices:
ASSETS:

Cash in Cooperative Federation refers to money deposited in federation

which are unrestricted and readily available when needed. These are treated as
cash and other cash equivalents.
Due from Accountable Officers and Employees refers to total collectibles from
shortages and other losses due from accountable officers and employees that
are subject to immediate settlement/sanction. These are recognized at cost, less
allowance for impairment, if any.
Cooperative Development Cost refers to expenses incurred prior to the actual
operations of the cooperative. These are recognized at cost, subject to
amortization for a period not exceeding 3 years.
Other Funds and Deposits refers to restricted funds set aside for funding of
reserves (Statutory and Other Reserves) established by the cooperative such as
Retirement, Mutual Benefit and other Funds. This is recorded at cost.
LIABILITIES:
Interest on Share Capital Payable refers to liability of the cooperative to its
member for interest on share capital, which can be determined only at the end
of every fiscal year.
Patronage Refund Payable is the liability of the cooperative to its members and
patrons for patronage refund, which can be determined only at the end of every
fiscal year.
Due to Union /Federation (CETF) in an amount set aside for the education and
training fund of an apex organization, which is 50% of the amount allocated, by
the cooperative in accordance with the provision of the cooperatives by-laws
and the cooperative code. The apex organization may either be a federation or
union of which the cooperative is a member.
Revolving Capital Payable is the deferred payment of interest on share capital
and patronage refund whose payment has been withheld, which should be
agreed upon in the General Assembly.
Project Subsidy Fund Payable unused portion of the donation/grant for training,
salaries and wages.
Mutual Benefit and Other Fund Payable are funds for special purposes such as
members welfare and benefits i.e. loan protection, hospitalization, death,
scholarship assistance, etc. including KBGF?CGF, provision for accidents not
taken from net surplus.
EQUITY
Donation/Grants are amounts received by the cooperative as awards,
subsidies, grants, aids and other. This shall not be available for distribution as
interest on share capital and patronage fund, and shall form part of the
members equity of the Statement of Financial Condition.

Statutory Funds are mandatory funds established/set up in accordance with Article

86 and 87 of the Cooperative Code. They are as follows:
Reserve Fund amounts set aside annually for the stability of the cooperative and
to meet net losses in its operations. It is equivalent to at least 10% of the net
surplus. A corresponding fund should be set up either in the form of time deposit
with local banks or government securities. Only the amount in excess of the paid
up share capital may be used for the expansion and authorized investment of the
cooperative as provided for in its by-laws.
Education and Training Fund an amount retained by the cooperative out of the
mandatory allocation as stipulated in the cooperatives by-laws.
Community Development Fund This is computed at__% of cooperatives net
surplus. This is used for projects or activities that will benefit the community where
the cooperative operates.
Optional Fund fund set aside from the net surplus (should not Exceed 10%) for
future use such as land and building, community development, etc.
EXPENSES
General Assembly Meeting expenses incurred in the conduct of
regular/special meeting
Members Benefit all expenses incurred for the benefit of the members
Affiliation Fee amount incurred to cover membership or registration fees
and annual dues to a federation or union.
Social and Community Service expenses incurred by the cooperative in its
social community involvement including solicitations and donations to charitable
institutions.
Provision for CGF (KBGF) amount set up for the provision of CGF(KBGF)
Provision for Members Future Benefits amount set up for future benefit of
members, such as pension of members, etc. not taken from net surplus.

OTHER ITEMS
Project Subsidy refer to the amount deducted from project subsidy fund to
subsidized project expenses. This shall appear in the statement of operation as a
contra account to Subsidized Project Expenses.
Donation and Grant Subsidy refers to an amount deducted from Donation
and Grants account to subsidize depreciation funded by donations and grants.
Optional Fund Subsidy refers to an amount deducted from Optional Fund to
subsidize depreciation funded by Optional Fund and/or community development
expense.

Subsidized Project Expenses refers to a portion of the Project Subsidy Fund

expended for training, salaries and wages and other activities by donations and
grants.
INCOME TAXES
The Cooperative Code states that the Cooperative transacting business only with its
members is exempt from all government taxes, and therefore cannot apply the PAS
for income taxes because of its tax- exempt nature. However, should the
cooperative exceed the limit as set forth in the cooperative code, it will adopt the
accounting standards for income taxes as stated in PAS 12.
INCOME RECOGNITION
As a rule, cooperatives adopt the accrual basis of accounting. However, for credit
and other cooperative, recognition of revenues is on modified accrual basis, i.e.
Interest income, fines, penalties and surcharges shall be recognized when earned
and actually collected. This is so because only interest income, fines, penalties and
surcharges on loans receivable that has been realized (i.e. earned and collect) shall
be the basis of the income available for distribution to its members through interest
on share capital and patronage refund.
Also, due to the cash-based income distribution scheme of a cooperative as well as
the inherent limitations of small-scale countryside credit cooperatives, it cannot
adopt the effective interest method.
3. MMANAGEMENTS SIGNIFICANT ACCOUNTING JUDGEMENT AND
ESTIMATES
3.1
Judgments
The preparation of the Cooperatives financial statements in conformity with
Financial Reporting Framework (in reference to the Generally Accepted
Accounting Principles of the Philippines) requires management to make
estimates and assumptions that affect the amounts reported in the
Cooperatives financial statements and accompanying notes. The estimates
and assumptions used in the Cooperatives financial statements are based
upon managements evaluation of relevant facts and circumstances as of the
date of the Cooperatives financial statements. Actual results could differ
from such estimates, judgments and estimates are continually evaluated and
are based on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the circumstances.
3.2
Estimates
In the application of the Cooperatives accounting policies, management is
required to make judgments, estimates and assumptions about the carrying
amounts of assets and liabilities that are not readily apparent from other
sources. The estimates and associated assumptions are based on historical
experience and other factors that are considered to be relevant. Actual
results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognized in the period in which the
estimate is revised if the revision affects only that period, or in the period of

the revision and future periods if the revision affects both current and future
periods.
The following represents a summary of the significant estimates and
judgments and related impact and associated risks in the Cooperatives
financial statements.
Allowance for Doubtful Accounts
The Cooperative assesses whether objective evidence of impairment exist for
receivables and due from related parties that are individually significant and
collectively for receivables that are not individually significant. Allowance for
doubtful accounts is maintained at a level considered adequate to provide for
potentially uncollectible receivable.
There are no allowances for doubtful accounts because they are potentially
collectible based on their historical collection.
The Cooperative follows the guidance of PAS 39 in determining when an asset
is other than temporarily impaired. The determination requires significant
judgment. In making this judgment, the Cooperative evaluates, among the
factors, the duration and extent to which the fair value of an investment is
less than its cost; the financial health of and near-term business outlook of
the investee, including factors such as industry and sector performance,
changes in technology and operational and financing cash flow.
If the assumption made regarding the duration that, and extent to which the
fair value is less than the cost, the Cooperative would suffer an additional
loss in its financial statements, representing the write down of cost at its fair
value.
Estimated Useful Lives of Property, Plant and Equipment
The Cooperative estimates useful lives of property, plant and equipment
based on the period over which the property, plant and equipment are
expected to be available for use. The estimated useful lives of the property,
plant and equipment are reviewed periodically and are updated if
expectations differ from previous estimates due to physical wear and tear,
technical or commercial obsolescence and legal or other limits on the use of
the property, plant and equipment. In addition, the estimation of the useful
lives of property, plant and equipment is based on the collective assessment
of industry practice, internal technical evaluation and experience with similar
assets. If possible, however, that future financial performance could be
materially affected by changes in the estimates brought about by changes in
factors mentioned above. The amounts and timing of recorded expenses for
any period would be affect ted by changes in these factors and
circumstances.
A reduction in the estimated useful lives of the property, plant and equipment
would increase the recorded expenses and decrease the noncurrent assets.
Depreciation is computed on a straight-line method over the estimated useful
lives of the assets as follows:
Leasehold Improvements
5-10 years
Furniture and Fixture
3-5 years
Other Equipment
3-5 years

Motor Vehicle

5 years

The company assets the value of property, plant and equipment which
require the determination of future cash flows expected to be generated from
the continued use and ultimate disposition of such assets, and require the
Company to make estimates and assumptions that can materially affect the
financial statements. Future events could cause the Company to conclude
that property, plant and equipment and other long-lived assets are impaired.
Any resulting impairment loss could have a material adverse impact on the
Companys financial condition and result of operation.
The preparation of the estimated future cash flow involves significant
judgment and estimations. While the Company believes that its assumptions
are appropriate and reasonable, significant changes in these assumptions
may materially affect the Companys assessment of recoverable and may
lead to future additional impairment charges.
Revenue Recognition
The Companys revenue recognition policies require the use of estimates and
assumptions that may affect the reported amounts of revenues and
receivables. Differences between the amounts initially recognized and actual
settlements are taken up in the accounts upon reconciliation. However, there
is no assurance that such use of estimates may not result to material
adjustments in future periods.
4. Financial Risk Management Objectives and Policies
The Cooperative is exposed to credit, liquidity, and other risk that arise in the
normal course of its business. Its risk and control framework includes a focus
on minimizing negative effects on the Companys financial performance due
to unpredictability of financial markets that drives the risks.
Credit Risk
Generally, the maximum credit risk exposure of financial assets is the
carrying amount of the financial assets as shown on the face of the statement
of financial condition.
The Cooperative continuously monitors defaults of customers and other
counterparties, and incorporate this information into its credit risk controls.
The Cooperatives policy to deal only with creditworthy counterparts.
The Cooperatives management considers that all the above financial assets
that are not impaired or past due for each balance sheet are of good credit
quality.
With respect to trade and other receivables, the Cooperative is not exposed
to any significant credit risk exposure to any single counterparty or any group
of counterparties having similar characteristics. Based on historical

information about customer default rates management consider the credit

quality of trade receivables that are not past due or impaired to be good.
The credit risk for cash and cash equivalents, money market funds,
debentures and derivatives financial instruments is considered negligible,
since the counterparties are reputable banks with high quality external credit
ratings.
Liquidity risks
Liquidity or funding risk is the risk than an entity will occur difficulty in raising
funds to meet commitments associated with financial instruments. Liquidity
risk may result from either the inability to sell financial assets quickly at their
fair values; or counterparty failing on repayment of contractual obligation; or
inability to generate cash flows as anticipated.
In order to minimize liquidity risk, the Cooperative maintains sufficient cash
and has the availability of funding through an adequate amount committed
credit facilities.
Other Price Risk Sensitivity
The Cooperatives market price risk arises from its investments carried at fair
value (financial assets classified as financial assets and fair value through
profit or loss and available-for-sale financial assets). It manages its risk
arising from changes in market price by monitoring the changes in the
market price of the investments.

NOTE: IF DEPRECIATION IS ALLOCATED BETWEEN DIRECT COST AND

EXPENSES, PROVIDE BREAKDOWN
45. ALLOCATION AND DISTRIBUTION OF NET SURPLUS
The Cooperatives constitution and by-laws explicitly provides that its net
surplus at the end of the fiscal year shall be distributed in the following
manner:

a. Reserve Fund - ___percent (__) shall be set

than 10%, if
Aside for the reserve fund. These reserve fund
less than
Shall be used for the stability of the cooperative
5 years, not
And to meet net losses in its operation

Not less

50%
Use by-laws, check if

exceeding
Limits
b. Educational and Training Fund - ___ percent
educational
(___) for the educational and training fund.
fund,5%
Half of the amount transferred to the
Union/Feder

5%And training
due to

Education and training fund annually under this

action

Subscription may be spent by the cooperative for

Education and training and other purposes; while
The other half shall be credited to the Cooperatives
Education and training fund of the apex organization
Of which the cooperative is a member.
c. Community Development Fund This is computed
at ___% of cooperatives net surplus. This is use for
exceeding 3%

Not

projects or activities that will benefit the community

where the cooperative operates.
d. Optional Fund This is computed at ____% of the
Not
exceeding 7%
Cooperatives net surplus
e. Interest on Share Capital and Patronage Refunds after
Deduction of the statutory accounts, any remaining
Net surplus shall be distributed to the cooperatives
Members in the form of interest not to exceed the
Normal rate of return on investments and patronage
Refunds. Interest on Fixed Deposits shall be allocated
In proportion to the individual members average
Share monthly, while patronage refund is divided
According to their individual patronage i.e., volumes of loans availed.
46. COOPERETIVE GUARANTED FUND

Under the CDA Articles of Cooperation NO. 4 Section 4, the Cooperative

Guarantee Fund shall be at least____% of the gross income of the cooperative
and shall be set aside to constitute the Cooperative Guarantee Fund which
shall be a social fund for the purpose of guaranteeing the realization of the
objectives of the Cooperative, payment of common services and facilities for
the benefit of the members, and for the investment in other cooperative
47.
EMPLOYEE BENEFITS
a. Retirement Benefits
Republic Act (RA No. 7641) (New Retirement
Law) took effect on January 7, 1993. Under
DISCLOSE NATURE
OF
The new law, the cooperative is required
RETIREMENT
To provide minimum retirement benefits to
Qualified retiring employees. This amount was
Set up by the Cooperative in compliance
With such law.
b. Other employee benefits
DISCLOSE DIFFERENT TYPES OF
EMPLOYEE
BENEFITS
48. INCREASE CAPITAL STOCK
Increase in capital stock from____
Shares to___ shares was approved by the
Cooperatives Development Authority on___.
49. RELATED PARTY TRANSACTIONS
There were no related party transaction.
HIGHLIGHT
DIRECTORS/
Made by the Cooperative for the years ending
OFFICERS/STAFF LOANS
December 2009 and 2008
IF IT EXCEEDING
CEILING AS
OF DATE-AMOUNT OF
CELING
STATE COMPLIANCE WITH
REGULATIONS
50. EVENTS AFTER BALANCE SHEET DATE
There were no events after balance sheet
Date that would require a disclosure or
Indicate
distribution of
Adjustment on the financial statements of
individuals
The Company as of Balance Sheet Date.
51. CAPITAL MANAGEMENT OBJECTIVES, POLICIES
AND PROCEDURES
The Cooperatives capital management
Objectives are to ensure the Cooperatives
DISCLOSE
STRATEGIES TO
Ability to continue as a going concern and to
MANAGE
COOPERATIVE

Provide an adequate return to shareholders

By pricing products and services commensurate
With the level of risk.

CAPITAL

Financial Assets
Investment at Fair Value through Profit or Loss refers to financial assets that
are upon initial recognition designated by the SCC as fair value through profit and
loss. This shall comprise both debt and equity securities.
There are to be carried by Cooperative at fair value through profit or loss upon initial
recognition. A financial asset is classified in this category if acquired principally
recognition. A financial asset is classified in this category if acquired principally
recognition. A financial asset is classified in this category if required principally for
the purpose of selling. The short term or if so designated by the Cooperative.
Assets in this category are classified as current assets if they are either hold for
trading or are expected to be realized within 12 months of the balance sheet date.
Subsequently to initial recognition, the financial assets included in the category are
measured at fair value with changes in fair value recognized in profit or loss.
Financial assets originally designated as financial assets at fair value through profit
or loss may not be subsequently be reclassified.
The use of fair value option hall be in accordance with the criteria set forth in the
amendments of PAS 39 subject to the following conditions:
1. SCCs shall have in place appropriate risk management systems (including
related risk management policies procedures and controls) prior to initial
application of the fair value option for a particular activity or purpose and on
ongoing basis;
2. SCCs shall apply the fair value option only to instruments for which fair
values can be reliably estimated;
3. SCCs shall provide CDA with supplemental information as may be necessary,
to enable CDA to assess the impact of the SCCs utilization of the fair value
option.
Loans and Receivables. Loans and receivables are non-derivative financial assets
with fixed or determinable payments that are not quoted in an active market. They
arise when the Cooperative provides money, goods or services directly to a debtor
with no intention of trading the receivables. They are included in current assets,
except directly to a debtor with no intention of trading the receivables. They are
included in current assets, except for maturities greater than 12 months after the
balance sheet date which are classified as non-current assets.
Loans and receivables are subsequently measured at amortized cost using the
effective interest method, less impairment losses. Any change in their value is
recognized in profit or loss.
Loans and receivables are presented as Trade and Other Receivables in the
Statements of Financial Condition.

Impairment loss is provided when there is objective evidence that the Cooperative
will not be able to collect all amounts due to it in accordance with the original terms
of the receivables. The amount of the impairment loss is determined as the
difference between the assets carrying amount and the present value of estimated
cash flows.
Under the Cooperatives Board Resolution No.______, the following interest rates
shall be implemented as a way of helping and at the same time encouraging
members to patronize the Banks lending services.
1. Secured Loans_____________________
2. Unsecured loan/Clean Loans_____________________________
Allowance for probable losses is maintained at a level considered adequate to
provide for potential losses on loans and other resources. The allowance is
increased by provision charged to operations and reduced by net write-offs
and reversals. The level of allowance is set up at the higher of the amount
determined based on the managements evaluation of potential losses after
consideration of prevailing and anticipated economic conditions.
Held- to- Maturity Financial Assets. This includes non-derivative financial assets
with fixed or determinable payments and a fixed date of maturity. Investments are
classified as held-to-maturity if the Company has a positive intention and ability to
hold them until maturity. They are included in a non-current assets under the Longterm Financial Assets account in the balance sheets, except those maturing within
12 months of the balance sheet date.
Hold-to-maturity investments are subsequently measured at amortized cost using
the effective interest method. In addition, if there is objective evidence that the
investment has been impaired the financial assets is measured at present value of
estimated cash flows. Any changes to the carrying amount of the investment are
recognized in profit or loss.
Available-for sale Financial Assets. This include non-derivative financial assets that
are either designated to this category or do not qualify for inclusion of any of the
other categories of financial assets. They are included in non-current assets under
the Long-term Financial Assets accounts in the Balance sheet unless management
intends to dispose the investment within 12 months of the balance sheet date.
All financial assets within the category are subsequently measured at fair value,
unless otherwise disclosed, with changes in value recognized in equity, net on any
effects arising from income taxes. Gains and losses arising from securities classified
as available-for-sale are recognized in the statement of income when they are sold
or when the investment is impaired.
In the case of impairment, any loss previously recognized equity is transferred to
the income statement. Losses recognized in the statements of income on equity
investments are not reversed through the statement of income. Loss recognized in
prior period income statement resulting from the impairment of debt instruments
are reversed through the income statement.

Unquoted Debt Securities Classified as Loans refers to the securities with fixed or
determinable payments and fixed maturity. Unquoted debt securities are measured
upon initial recognition at their value plus transaction cost that are directly
attributable to the acquisition of the securities. After initial recognition, the
Cooperative shall measure Unquoted-debt securities at their amortized cost using
the effective interest method. A gain or loss arising from the change in the fair
value of the securities shall be recognized in profit or loss when the security is
derecognized or impaired, and through the amortizing process.
Investment in Non-Marketable Equity Securities (INMES) refers to equity instruments
that do not have a quoted market price in an active market, and whose fair value
cannot be reliably measured.
INMES shall be measured upon initial recognition at its fair value plus transaction
cost that are directly attributable to the acquisition of the security. After initial
recognition, the SCC shall measure INMES at cost. A gain or loss arising from the
change in fair value of the INMES shall be recognized in profit or loss when the
security is derecognized or impaired.
Derecognition of financial assets occurs when the rights to receive cash flows from
the financial instruments expire or are transferred and substantially all of the risks
and rewards of ownership have been transferred.
NOTE: RISK MANAGEMENT POLICY SHOULD ALSO BE DISCLOSED WHEN A COOP
HAS FINANCIAL ASSETS