Public Sector Accounting Standards Board (PSAcSB)

INTRODUCTION
to the
Philippine Public Sector Accounting
Standards (PPSAS) and Revised
Chart of Accounts (RCA)
For Government Corporations
classified as Non-Government
Business Enterprises (GBEs)

Assistant Commissioner Lourdes M. Castillo

Government Accountancy Sector
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 Legal Bases

Authority to
promulgate
accounting
rules and
regulations

Section 2(2), Article IX D Section 25 (4)

of 1987 Philippine of P.D. 1445
Constitution
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 Why
IPSAS?

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 INTERNATIONAL PUBLIC SECTOR
ACCOUNTING STANDARDS (IPSASs)

accounting standards
developed by the IPSAS Board, IFAC
general purpose financial reports
(GPFRs)
public sector entities except GBEs

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 Objectives and Benefits of IPSAS

Quality General
Purpose Financial
Reporting

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 General Purpose Financial Reports
(GPFRs)

Statement of Financial Position

Statement of Financial Performance Financial
Statements
Statement of Cash Flows
Notes

Budget information
Separate
Service delivery
Report
Achievements
or
Prospective Financial and Notes
Non-financial Information

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Methodology
Evaluation of IPSAS
Studied and evaluated each IPSAS to determine applicability
Development and Adoption of PPSAS
Provided the PAG for IPSAS provisions which were not adopted
Exposed drafts to stakeholders
Conducted Focus Group Discussions
COA Resolution No. 2014-003 dated January 24, 2014 (adoption of
25 PPSASs)
COA Circular No. 2015-003 dated April 16, 2015 (classification
of Government Corporations (GC) to GBEs and Non-GBEs)
COA Resolution No. 2015-040 dated December 01, 2015
(deferment of the implementation by GCs-Non-GBEs from January
1, 2014 to January 1, 2016)

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Methodology
Revision of the Chart of Accounts
COA Circular No. 2015-010 dated December 1,
2015 (adoption of the Revised Chart of
Accounts for GCs)
Proposed COA Circular on the Conversion from
the PGCA to the RCA for GCs is for CPs
consideration
Proposed COA circular on the Supplementary
Guidelines in the Preparation of FSs and
financial reports is for revision
Preparation of Government Accounting Manual
Government Accounting Manual for GCs-
Non-GBEs in conformity with the PPSASs
shall be developed
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 PHILIPPINE PUBLIC
SECTOR ACCOUNTING
STANDARDS (PPSAS)

IPSAS

PPSAS

PAG

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 Bases of PPSAS
Pronouncements issued by IPSASB (IPSASs), IASB,
PICPA, International Organization of Supreme Audit
Institutions and others.
Relevant factors, including best accounting practices,
and
Capacity of Agencies to comply with PPSAS.

Objective
To set out the recognition, measurement,
presentation and disclosure requirements for
financial reporting in the Philippine Government.

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 Scope

PPSASs set out requirements dealing with

transactions and other events in general purpose
financial reports of all NGAs, LGUs and GOCCs
not classified as GBEs

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 Scope
GBE is an entity that:
a) has the power to contract in its own name;
b) has been assigned the financial and
operational authority to carry on a business;
c) sells goods and services, in the normal
course of its business, to other entities at a
profit or full cost recovery;
d) is not reliant on continuing government
funding to be a going concern (other than
purchases of outputs at arms length); and
e) is controlled by a public sector entity.
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 Approach to Implementation
28 out of 32 PPSAS in the 2012 HIPSAP
shall be implemented
Phased Implementation
Phase 1 (25 PPSAS for implementation in 2014,
deferred to 2016 for non-GBEs)

Phase 2
o Initial Proposal (3 PPSASs in 2015)
o Revised Proposal, based on 2016 HIPSAP
6 PPSASs in 2017
1 PPSAS in 2018
2 PPSASs in 2020

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 Phase 1 For implementation in 2016

1. PPSAS 1- Presentation of Financial Statements

2. PPSAS 2- Cash Flow Statements
3. PPSAS 3 Accounting Policies, Changes in
Accounting Estimates and Errors
4. PPSAS 4- The Effects of Changes in Foreign
Exchange Rates
5. PPSAS 5- Borrowing Costs
6. PPSAS 6- Consolidated and Separate Financial
Statements

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Phase 1 (continued)
7. PPSAS 8 Interests in Joint Ventures
8. PPSAS 9- Revenue from Exchange Transactions
9. PPSAS 12- Inventories
10.PPSAS 13- Leases
11.PPSAS 14- Events after the Reporting Date
12.PPSAS 16- Investment Property
13.PPSAS 17- Property, Plant and Equipment

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Phase 1 (continued)
14.PPSAS 19- Provisions, Contingent Liabilities and
Assets
15.PPSAS 20 Related Party Disclosures
16.PPSAS 21- Impairment of Non-Cash Generating
Assets
17.PPSAS 23- Revenue from Non- Exchange
Transactions (Taxes and Transfers)
18.PPSAS 24- Presentation of Budget Information in
Financial Statements

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Phase 1 (continued)
19.PPSAS 26- Impairment of Cash Generating
Assets
20.PPSAS 27- Agriculture
21.PPSAS 28- Financial Instruments: Presentation
22.PPSAS 29-Financial Instruments: Recognition
and Measurement
23.PPSAS 30- Financial Instruments: Disclosures
24.PPSAS 31- Intangible Assets
25.PPSAS 32- Service Concession Arrangements:
Grantor

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 Phase 2 For Implementation in 2017

1. PPSAS 33- First-time Adoption of Accrual Basis

IPSASs
2. PPSAS 34 Separate Financial Statements
3. PPSAS 35 Consolidated Financial Statements
4. PPSAS 36 Investments in Associates and Joint
Ventures
5. PPSAS 37 Joint Arrangements
6. PPSAS 38 Disclosure of Interests in Other
Entities

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 Phase 2 For Implementation in 2018

1. PPSAS 39- Employee Benefits

Phase 2 For Implementation in 2020

1. PPSAS 18- Segment Reporting

2. PPSAS 22- Disclosure of Financial Information
about the General Government Sector

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 THE REVISED CHART OF ACCOUNTS
for Government Corporations
(RCA for GCs)

COA Circular No. 2015-010 dated

December 01, 2015

Effective date: January 1, 2016

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 OBJECTIVES

To provide new accounts for the adoption of the

Philippine Public Sector Accounting Standards
(harmonized with IPSAS)

To provide uniform accounts for government

corporations accounting and budget systems to
facilitate the preparation of harmonized financial and
budgetary accountability reports

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 OBJECTIVES

To expand the account code from three (3)

digits in the NGAS Chart of Accounts to eight
(8) digits,
To allow expansion or creation of new
accounts as may be necessary to implement
new standards or policies and
Provide up to four levels of consolidation
depending on the users information needs.

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 MAJOR CHANGES
a. Coverage - all GCs, except for Special Accounts in the
General Fund (SAGF) maintained by GOCCs

b. Expanded account code structure - from three (3)

digits to eight (8) digits

c. New accounts were provided for the PPSAS

implementation.

d. Some accounts no longer applicable to GCs were

deleted.

e. Expanded or compressed accounts.

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 COA RCA for GCs
ACCOUNT GROUPS
Codes are assigned to account groups to facilitate
location of accounts in the general and subsidiary
ledgers, to provide systematic arrangement and
classification of accounts and facilitate preparation of the
consolidated financial reports as follows:

Code Account Groups

1 Assets
2 Liabilities
3 Equity
4 Income
5 Expenses
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 COA RCA for GCs
ACCOUNT CODE STRUCTURE

0 00 00 000

Account Group

Major Account Group

Sub-Major Account Group

General Ledger Account

General Ledger Contra-Account

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 ASSET WITHOUT CONTRA ACCOUNT

Example: Cash-Collecting Officer

1-01-01-010

Asset
Cash and Cash Equivalents
Cash on Hand
Cash Collecting Officer
GL Contra-Account

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 ASSET WITH CONTRA ACCOUNT

Example: Accounts Receivable

1-03-01-010

Asset
Receivables
Loans and Receivable Accounts
Accounts Receivable
GL Contra-Account

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 ASSET CONTRA ACCOUNT

Example: Allowance for Impairment - Accounts

Receivable
1-03-01-011

Asset
Receivables
Loans and Receivable Accounts
Accounts Receivable
Allowance for Impairment-
Accounts Receivable

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 New Accounts

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 New Accounts In compliance with

Allowance for Impairment PPSAS 21 and 26 -

Accumulated Impairment Losses Impairment of Non-
Impairment Losses Cash and Cash-
Reversal of Impairment Loss Generating Assets
Operating Lease Receivable PPSAS 13 - Leases
Finance Lease Receivable
Leased Assets
Operating Lease Payable
Finance Lease Payable
Financial Assets Held for Trading PPSAS 28, 29 and 30
Financial Assets Designated at Fair Value - Financial
Through Surplus or Deficit Instruments
Derivative Financial Assets Held for Trading
Derivative Financial Assets Designated at Fair
Value Through Surplus or Deficit

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 New Accounts In compliance with

Investments in Joint Venture PPSAS 8 Interests

Share in the Profit/Revenue of Joint Venture in Joint Ventures
Investment Property, Land PPSAS 16
Investment Property, Buildings Investment Property
Bearer Trees, Plants and Crops PPSAS 17
Historical Buildings Property, Plant and
Other Heritage Assets Equipment
Service Concession-Tangible/Intangible PPSAS 32 - Service
Assets Concession
Other Service Concession Assets Arrangements:
Service Concession Arrangements Payable Grantor
Deferred Service Concession Revenue
Repairs and Maintenance-Service Concession
Assets

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 New Accounts In compliance with

Patents/Copyrights PPSAS 31 -
Websites Intangible Assets
Goodwill
Other Intangible Assets

Trees, Plants and Crops PPSAS 27 -

Gain on Initial Recognition of Biological Assets Agriculture
Gain from Changes in Fair Value Less Cost to
Sell of Biological Assets Due to Physical
Change
Gain from Changes in Fair Value Less Cost to
Sell of Biological Assets Due to Price Change

Semi-Expendable Inventories and Expenses RCA for GCs

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 Deleted Accounts

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Examples:

101 Cash in Vault for LGUs use

127 Real Property Tax Receivables for LGUs use

128 Special Education Tax for LGUs use

Receivables
131 Due from National Treasury for NGAs use

959 Remittance to National Treasury For NGAs use

from Assets Disposal

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 Expanded or Compressed
Accounts

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 COMPRESSED ACCOUNTS
Example:
Transportation Equipment

841 Repairs and Maintenance-

Motor Vehicles
842 Repairs and Maintenance-
Trains
843 Repairs and Maintenance- 5 02 13 060 Repairs and Maintenance-
Aircraft and Aircraft Ground Transportation Equipment
Equipment
844 Repairs and Maintenance-
Watercrafts
848 Repairs and Maintenance-
Other Transportation
Equipment

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 COMPRESSED ACCOUNTS
Example:

Transportation Equipment

941 Depreciation-Motor
Vehicles
942 Depreciation-Trains

943 Depreciation-Aircraft and 5 05 01 060 Depreciation-

Aircraft Ground Equipment Transportation
Equipment
944 Depreciation-Watercrafts

948 Depreciation-Other
Transportation Equipment

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 Repairs and Maintenance
Transportation Equipment
5-02-13-060
Subsidiary Ledgers:
01 Motor Vehicles
02 Trains
03 Aircrafts and Aircrafts Ground Equipment
04 Watercrafts
99 Other Transportation Equipment

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Depreciation-Transportation Equipment
5-05-01-060

Subsidiary Ledgers:
01 Motor Vehicles
02 Trains
03 Aircrafts and Aircrafts Ground Equipment
04 Watercrafts
99 Other Transportation Equipment

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 EXPANDED ACCOUNT
Example:

716 Subsistence, 5 01 02 050 Subsistence

Laundry and Allowance
Quarter
Allowance
5 01 02 060 Laundry Allowance

5 01 02 070 Quarters Allowance

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CONVERSION OF ACCOUNTS TO THE REVISED CHART OF
ACCOUNTS

Proposed COA Circular

Policies and Guidelines on Conversion
Matrix on the Conversion of the Accounts
(PGCA RCA for GCs)
New Accounts and Revised Code, Title
and/or Description
Sample Conversion Entries

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