NAME OF THE COMPANY: Druk Green Power Corporation (DGPC).
FINANCIAL STATEMENT OF THE YEAR: 2012 & 2016
Items GAAP (before 2013)
Financial report is prepared in
compliance with GAAP and
relevant provision of the
Companies Act of Kingdom Of
Bhutan 2000.
As per GAAP, there is no specific
requirement as to Classify assets
and liabilities whereby DGPC
have not classified items of
balance sheet as current and non-
current assets and liabilities .
Property, Plant & Equipment,
Land collectively as FIXED
ASSETS.
Deferred tax asset or liability is
not classified as it is written as
separate line item (Eg. Deferred
tax asset of Nu.13.11 million is
recorded as deferred tax asset
separately).
The term used in financial
statement as per GAAP are
balance sheet, cash flow
statements and income statement.
BASs (After 2013) Key points
Financial report is prepared in
compliance with BAS phase I & II
and relevant provision of the
Companies Act of Kingdom Of
Bhutan 2016.
As per BAS, the classification of
items of balance sheet is essential. In
2016, those balance sheet item are
specifically classified as current and
non-current assets and liabilities.
The items of fixed assets of the
entity are specified as Property,
Plant and Equipment, land etc under
non-current assets.
Deferred tax asset or liability is
reported under the head non-current
asset or liability. (Eg. Deferred tax
liability of nu.76.9 million is
recorded under the head non-current
liabilities).
The term used in financial statement
as per BAS1 are statement of
financial statement, statement of
cash flows and statement of
comprehensive income.
 Financial Reporting Framework (key definition)
Items GAAP
Assets An asset is defined as a future economic
benefit as a result of past transaction.
Liability It is a probable future sacrifice of
economic benefits arising due to present
obligation of an entity as a result of past
transaction.
Income
Income means the gross inflow of
economic benefits arising from the
operating ordinary activities of an entity.
Expenses
It is a decrease in economic benefits due
to activity of business during a period
which will decrease assets or increase
Equity liabilities.
It is the difference between the value of
assets and cost of liabilities
BAS
An asset is a resource controlled by the
entity from which future economic
benefits will flow to the entity.
Liability means a present obligation of
the entity arising against past
transaction, the settlement of which is
expected to result in an outflow from the
entity
It is the increase in economic benefits’
during the accounting period in the form
of inflow that result in increase in
equity.
It is a decrease in economic benefits
during the accounting period in the form
of outflow that result in decrease in
equity
Equity is the residual interest in the
assets of the entity after deducting all its
liabilities.
 Recognition of financial statement elements
Item GAAP
Assets An assets is recognized when it is controlled
by entity and is probable that future
economic benefits associated with the item
will flow to the entity and such cost / value
can be measured reliably.
Liability Liability is recognized when it is probable
that future economic benefits associated
with the item will flow from the entity and
such cost / value can be measured reliably.
Income Income is recognized when there is increase
in future economic benefit related to
increase of assets and decrease of liabilities
Expenses Expenses are recognized when there is
decrease in economic benefit related to
decrease in assets and increase of liabilities.
BAS
An assets is recognized when probable
future economic benefits is expected to
flow to the entity and when asset has a cost
/ value that can be measured reliably.
Liability is recognized when it result in
outflow of resources when liability is
settled and it is likely that economic
benefits is expected to outflow. Moreover
The value of liability should measured
reliably.
Income is recognised when there is increase
in future economic benefits resulting
increase in assets and decrease in liabilities
and such economic benefits can be
measured reliably.
Expenses are recognised in the income
statement when there is decrease in future
economic benefit resulting decrease in an
asset or increase in liability and that can be
measured reliably.
 Measurement of assets and liability and Disclosure of material items.

Item GAAP BASs

Measurement of GAAP follows cost model where asset
Assets and value is obtained by deducting accumulated
Liability depreciation from initial cost. Liability is
measured at fair value, it is obtained by
subtracting transaction cost from fair value.
BAS uses revaluation model, whereby
asset value is obtained by deducting
accumulated depreciation from fair value
or initial cost and impairment losses.
Similarly, initial amount of liability and
expected amount paid to meet the liabilities
is considered in order to measure liability.

Disclosure of Information is material if omitting or

material misstating will influence the economic
information decision of information users. Therefore,
such material information should be
disclosed.

Key ratios

items GAAP (before 2013) BAS ( after 2013) Key points to high
light

Current ratio 1.08 1.32

Liquid ratio 0.96 1.17

Debt Equity ratio 0.44 0.18

Assets turnover ratio 0.22 0.33

Observation in Auditors Report

Item GAAP (before 2013) BAS ( after 2013)

Observation on The Audit was conducted in accordance The audit was conducted in accordance with
Auditors report. with GAAP containing simply the opinion International Auditing Standard. They had
of the auditor. provided a meticulous audit report
specifying the type of audit opinion,
Auditors responsibility and responsibility of
Management and those charges with
Governance.
Auditor reports after 2013 it is more
comprehensive and provides adequate
information to users.