Summary of Significant Accounting Policies
The University System Administration and the autonomous campuses usethe accrual basis of accounting in recording expenses and interest income, whereexpenses were recognized when incurred and income when realized, except whereaccrual basis is impractical or where the amount of income could not be fairlyestablished.
The release of Notice of Cash Allocation (NCA) is centralized with the UPSystem and subsequently transferred to the respective campuses and recorded in theRegular Agency Books as well as those income and receipts which the University isauthorized to use.
The Modified Obligation System is used to record allotments received andobligations incurred. Separate registries are maintained to control allotments andobligations for each class of allotment.
The outstanding cash advances are required to be liquidated/settled beforethe granting of a new one.
The UPD receivables are recorded in the books based on the reportssubmitted by the Office of the University Registrar (OUR), University Food Service(UFS), Business Concessions Office (BCO), University Health Service (UHS), UPHousing Office and statements prepared by its Accounting Office such as the Statementof Contractual Obligations and Tuition Fee Loan derived from the submitted Form 5s of the students during the enrollment period.
The Allowance for Doubtful Accounts was provided for based on the percentage and aging of accounts receivables prescribed for in the New GovernmentAccounting System (NGAS) Manual. A review of the receivables to identify accounts to be provided with allowance is made at the end of the year.
The Accounting Office is adopting the moving average method of inventory valuation under the perpetual inventory system, except for the Institute of Human Genetics (IHG), which applies the perpetual inventory method.
Except for Books, all purchases for non-consumable supplies andmaterials below the benchmark set by the UPS Accountants of P2,000.00 are recorded asexpense and charged to the operational budget. All assets purchased below P2,000.00recorded as expense are supported by Inventory Custodian Slip (ICS) for accountability purposes.28