Professional Documents
Culture Documents
2016-06)
We've learned that there are different types of cooperatives, namely: Producer Cooperative, Credit
Cooperative, Farming Cooperative, Consumer Cooperative and Savings Cooperative. Each type of
cooperative perform a special task to meet their required obligations and duties. Also, each
cooperative maintain separate Standard Chart of Accounts (SCA) because certain accounts are not
applicable to other cooperatives. The basic purpose in prescribing the SCA is to provide guidelines
on the use of account titles for the preparation of financial statements to be used by all types of
cooperatives. Thus, in the absence of more complete and detailed guidelines on what appropriate
account title to use, the cooperatives turned to Philippine Financial Reporting Standards (PFRS)
issued by the Board of Accountancy (BOA) and Securities and Exchange Commission (SEC). This
situation creates confusion and lack of uniformity of what proper accounts should be employed
among different cooperatives, as some follow the SCA while others follow the PFRS as a basis. Thus,
this results to longer SCA and difficult maintenance of the chart of accounts.
To eliminate this confusion, the Cooperative Development Authority (CDA) issued CDA MC No. 2016-
06 also known as Revised Standard Chart of Accounts for Cooperative on October 18, 2016. This will
guide cooperatives management, accountants, bookkeepers and auditors on what the CDA considers
sound accounting and financial reporting.
Another is "Cooperative Development Cost", which is very important especially for newly-organized
cooperative because it entails a material amount used during the pre-operation stage of the
cooperative. Also, difficult accounts like "held to maturity" and "available for financial assets" have
been disappeared and have been replaced as well. The Memorandum Circular No. 2016-06 also lists
the components of financial statements, which includes the Statement of Financial Position or the
Balance Sheet, Statement of Operations of Income Statement, Statement of Changes in Equity, Cash
Flows Statement, and Notes to Financial Statements. To guide accountants, the formats for the
different statements are included in the Annexes.
Though there is a new standard chart of accounts for cooperatives, there is still the need for the
cooperative and audit practitioners to fully appreciate and grasp the newly revised SCA .
Cooperatives who fail to comply with the said circular shall be subject to the following sanctions after
compliance with due process of law: First noncompliance: Written warning; Second noncompliance:
Non issuance of the certificate of compliance; Third noncompliance: Revocation of certificate of
registration. Hence, I believe accountants and auditors must familiarize themselves on the new terms
and when to use such accounts.