Continuation….

By: Jhonmel Christian N. Amo

 Statement of Changes in Net
Assets/Equity
O Shows the increase or decrease in the entity’s net
assets during the period resulting from the following:
1. Surplus or deficit for the period
2. Items of revenue and expense that are recognized
directly in equity;
3. Effects of changes in accounting policies and
corrections of errors; and
4. The balance of accumulated surpluses or deficits at
the beginning of the period and at the reporting
date, and the changes during the period.
See illustrative example shown
on page 347
 Statement of Cash Flow
O The sources and utilizations of cash and cash
equivalents during the period according to the
following activities:

1. Operating Activities
2. Investing Activities
3. Financing Activities
 Operating Activities
Cash flows from operating activities are primarily
derived from the principal cash generating
activities of the entity. They normally include
cash flows on items of revenue and expense.
Examples include:
O Receipt of NCA and reversion of unused NCA
O Receipt or provision of assistance and subsidy
to other entities
O Collections of income and receivables
O Payments of expenses, cash advances
and payables
O Inter or intra-entity transfers of funds
 Investing Activities
Involve the acquisition and disposal of
noncurrent assets and other investments.
Example include:
O Acquisition and disposal of PPE, investment
property, intangible assets and other
noncurrent assets
O Acquisition and disposal of investment
securities and derivatives
O Collection and provision of long-term loans
 Financing Activities
Are activities that affect the entity’s equity
capital borrowings. Examples include:
O Issuing of notes, loans, and bonds payable,
and their repayments
O Finance lease payments pertaining to the
reduction of the outstanding finance lease
liability
 Presentation of Cash Flow
OPERATING ACTIVITIES
O Direct Method – Under this method, major classes of
gross cash receipts and gross cash payments are
presented.
Information about major classes of gross cast receipts
and gross cash payments may be obtained either:
1. From the accounting records of the entity
2. By adjusting relevant accounts for changes during
the period, non-cash items, and other items whose
effects are investing or financing cash flows.
INVESTING AND FINANCING ACTIVITIES
O Cash flow may be reported on a net bases
for:
1. Receipts and payments made on behalf of
customers, taxpayers or beneficiaries that
reflect the activities of the other party rather
than those of the entity
2. Receipts and payments for items with quick
turnover, large amount, and short
maturities.
O Cash flows denominated in a foreign
currency are translated using the spot
exchange rate at the date of the cash flow.
O Any significant amount of cash and cash
equivalents held that is not available for the
entity’s use shall be disclosed in the notes.
See illustrative example shown
on page 351
 Statement of Comparison of
Budget and Actual Amounts
O Shows the differences (variances) between
budgeted amounts and actual results for a
given reporting period. This enhances the
transparency of financial reporting of the
government.
The statement of comparison of budget and
actual amounts show the following:
Budget Information – consists of, among others, data
on appropriations, allotments, obligations, revenues
and other receipts and disbursements. This is based
on the budget registries and include the following :
1. Original Budget – is the initially approved budget
for the period, usually the general appropriations
act.
2. Final Budget – is the original budget adjusted for
all reserves, carry-over amounts, realignments,
transfers, allocations and other authorized
legislative or similar authority changes applicable
to the period.
O Actual amounts on a comparable basis – these
represent the actual disbursement made during the
period.
The Differences are classified as follows:
1. Basis Differences – occur when the approved budget
is prepared on a basis other than the accounting
basis;
2. Timing Differences – occur when the budget period
differs from the reporting period reflected in the
financial statements
3. Entity Differences – Occur when the budget omits
program or entities that are part of the entity for which
the financial statements are prepared.
EXAMPLE:
O 1 000 000 – The original Budget
O 50 000 Realigned to personnel services
O 950 000 – Final Budget ( 1M – 50k )
O 870 000 Actual amounts on a comparable
basis
O 930 000 Additions to capital assets
O 60 000 Basis Difference
O 80 000 Difference Between Final budget and
actual amount on comparable basis ( 950k –
870k )
See illustrative Examples on
page 354