Department of Agriculture Notes To Consolidated Financial Statements For The Year Ended December 31, 2016

Department of Agriculture
Notes to Consolidated Financial Statements

For the year ended December 31, 2016
1. General Information/Agency Profile
1.1 The consolidated financial statements of the DEPARTMENT OF

AGRICULTURE were authorized for issue on May 29, 2017 as shown in
Statement of Management Responsibility for Financial Statements signed by
Financial and Management Service Director Miriam C. Cornelio and
Undersecretary-designate for Finance Atty. Francisco M. Villano, Jr.
1.2 The Department of Agriculture by virtue of Executive Order No. 292 is the
principal agency of the Philippine government responsible for the promotion of
agricultural development growth. It was reorganized under Executive Order No.
116, dated January 30, 1987, and is mandated to provide the policy framework to
help direct public investments and partnership with local government units
(LGUs) which provide the support services necessary to make agriculture and
agri-based enterprises profitable. The agency is service oriented and its primary
role is to increase agricultural production to achieve national food security, create
more jobs and give the farmers higher income to uplift their living conditions.
The principal programs of the Department are the Agriculture and Fishery
Modernization Program under which are the three banner programs, the Agri-
Pinoy Rice and Corn, Agri-Pinoy High Value Commercial Crops and the Agri-
Pinoy Livestock. There is also DA-LGU Counter parting Program which
provides post harvest facilities, farm-to-market roads, livelihood projects and
some infrastructure projects.
1.2.1 Agri-Pinoy Rice and Corn Program - This program is geared towards
improving the farmers’ profitability, provide adequate food supply,
increase productivity and provide a favorable policy environment
conducive to increased agricultural investment and global
competitiveness.
1.2.2 Agri-Pinoy High Value Commercial Crops Program - is one of the priority
programs of the DA. It is designed primarily to address the priority
concerns of the government in food security and poverty alleviation.
Other concerns of the program include: (a) modernization of Philippine
agriculture to enhance profitability and prepare the crop sector for the
challenges of globalization; (b) provides the national directions and
framework for harmonizing local initiatives; and (c) industry development
of high value commercial crops by linking production systems with
markets. It also endeavors to improve farming and processing technologies
in the sub-sector in order to increase productivity and quality, while
increasing access to such technologies and production scheme. It likewise
11
seeks to improve access to local and export markets. Finally, it aims to
reduce post-harvest losses through better infrastructure and distribution
systems.
1.2.3 Agri-Pinoy Livestock - The program is geared towards the attainment of

productivity, efficiency, economic and sustainable livestock and poultry
industry. One way of achieving this is to increase the region’s breeder base
through direct infusion of breeder animals, production of quality stocks,
maintenance of healthy and stable disease situation, and provision of
technical assistance to farmer clientele.
1.3 Agency Vision
A modernized smallholder agriculture and fisheries; a diversified rural economy

that is dynamic, technologically advanced and internationally competitive. Its
transformation is guided by the sound practices of resource sustainability, the
principles of social justice, and a strong private sector participation.
1.4 Agency Mission
To help and empower the farming and fishing communities and the private sector
to produce enough, accessible and affordable food for every Filipino and a decent
income for all.
2. Statement of Compliance and Basis of Preparation of Financial Statements
The consolidated financial statements have been prepared in accordance with and
comply with the Philippine Public Sector Accounting Standards (PPSAS) issued by
the Commission on Audit per COA Resolution No. 2014-003 dated January 24, 2014.
The consolidated financial statements have been prepared on the basis of historical
cost, unless stated otherwise. The Statement of Cash Flows is prepared using the
direct method.
3. Summary of Significant Accounting Policies
3.1 Basis of accounting
The consolidated financial statements are prepared on an accrual basis in

accordance with the Philippine Public Sector Accounting Standards (PPSAS).
12
3.2 Consolidation
a. Consolidated Entities/Controlled Entities
Consolidated entities
The consolidated financial statements reflect the assets, liabilities, revenues,

and expenses of the reporting entity and all controlled entities.
Consolidated in the financial statements of the Department are the transactions

of all funds of the 15 Regional Field Units (RFUs), 5 Staff Bureaus, 13
Foreign-Assisted Projects (FAPs). Five of the FAPs, the Infrastructure for
Rural Productivity Enhancement Project (InfRES), Rural Infrastructure
Development Project (RIDP), Central Cordillera Agricultural Program
(CECAP), Diversified Farm Income Market Development Project (DFIMDP),
Upland Development Programme in Southern Mindanao (UDP) were already
completed projects, thus have been reported as dormant accounts.
The Central Office release Advice of Sub-Allotment (ASA) and issue Notice
of Transfer Allocation (NTA) to Regional Offices and Staff Bureaus for
project implementation. The Central Office also receives transfers from
source bureaus and national government agencies for project implementation.
The staff bureaus, RFUs and FAPs of the Department are the following:
a) Five Staff Bureaus
 Agricultural Training Institute ( ATI )

 Bureau of Animal Industry ( BAI )
 Bureau of Agricultural Research ( BAR )
 Bureau of Plant Industry ( BPI )
 Bureau of Soils and Water Management ( BSWM )
b) 15 Regional Field Units
 Regional Field Unit I - San Fernando City, La Union

 Regional Field Unit II - Tuguegarao City, Cagayan
 Cordillera Admin Region - Baguio City
 Regional Field Unit III - San Fernando City, Pampanga
 Regional Field Unit IV-A - BPI Compound, Visayas Avenue,
Quezon City
 Regional Field Unit IV-B - ATI Bldg. Diliman, Quezon City

 Regional Field Unit V - San Agustin, Pili, Camarines Sur
 Regional Field Unit VI - Iloilo City
 Regional Field Unit VII - Cebu City
13
 Regional Field Unit VIII - Tacloban City
 Regional Field Unit IX - Zamboanga City
 Regional Field Unit X - Cagayan de Oro City
 Regional Field Unit XI - Davao City
 Regional Field Unit XII - Koronadal City
 Regional Field Unit XIII - Capitol Compound, Butuan City
c) 13 Foreign-Assisted Projects
 Cordillera Highland Agricultural Resource Management Project

(CHARMP )
 Mindanao Rural Development Program (MRDP)
 Philippine Rural Development Project (PRDP)
 International Development Fund (IDF)
 Establishment of Modern Rice Processing Complex (RPC) –
KOICA Assisted Project
 Support to Emergency & Livelihood Assistance Project (SELAP)
 Philippine Climate Change Adaptation Project (PHILCCAP)
 Rural Development Project in the Philippines (RDPP)

 Infrastructure for Rural Productivity Enhancement Project
(InfRES) completed project
 Central Cordillera Agricultural Programme (CECAP) - completed
project
 Rural Infrastructure Development Project (RIDP ) - completed project
 Upland Development Programme in Southern Mindanao (UDP)
– completed project
 Diversified Farm Income Market Development Project
(DFIMDP) – completed project
3.3 Financial instruments
a. Financial assets
Subsequent measurement
The subsequent measurement of financial assets depends on their

classification.
Financial assets at fair value through surplus or deficit
Financial assets at fair value through surplus or deficit include financial assets
held for trading and financial assets designated upon initial recognition at fair
value through surplus and deficit. Financial assets are classified as held for
trading if they are acquired for the purpose of selling or repurchasing in the
near term.
14
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or

determinable payments that are not quoted in an active market. After initial
measurement, such financial assets are subsequently measured at amortized
cost using the effective interest method, less impairment. Amortized cost is
calculated by taking into account any discount or premium on acquisition and
fees or costs that are an integral part of the effective interest rate. Losses
arising from impairment are recognized in the surplus or deficit.
Derecognition
The Department derecognizes a financial asset or, where applicable, a part of a

financial asset or part of a Department of similar financial assets when:
 The rights to receive cash flows from the asset have expired or is waived
 The Department of Agriculture has transferred its rights to receive cash
flows from the asset or has assumed an obligation to pay the received cash
flows in full without material delay to a third party; and either: (a) the
Department has transferred substantially all the risks and rewards of the
asset; or (b) the Department has neither transferred nor retained substantially
all the risks and rewards of the asset, but has transferred control of the asset.
Impairment of financial assets
The Department assesses at each reporting date whether there is objective

evidence that a financial asset or a group of financial assets is impaired. A
financial asset or a group of financial assets is deemed to be impaired if, and
only if, there is objective evidence of impairment as a result of one or more
events that has occurred after the initial recognition of the asset (an incurred
“loss event”) and that loss event has an impact on the estimated future cash
flows of the financial asset or the group of financial assets that can be reliably
estimated. Evidence of impairment may include the following indicators:
 The debtors or a group of debtors are experiencing significant financial

difficulty
 Default or delinquency in interest or principal payments
 The probability that debtors will enter bankruptcy or other financial
reorganization
 Observable data indicates a measurable decrease in estimated future cash
flows (e.g. changes in arrears or economic conditions that correlate with
defaults)
15
Financial assets carried at amortized cost
For financial assets carried at amortized cost, the Department first assesses
whether objective evidence of impairment exists individually for financial
assets that are individually significant, or collectively for financial assets that
are not individually significant. If the Department determines that no objective
evidence of impairment exists for an individually assessed financial asset,
whether significant or not, it includes the asset in a group of financial assets
with similar credit risk characteristics and collectively assesses them for
impairment. Assets that are individually assessed for impairment and for which
an impairment loss is, or continues to be, recognized are not included in a
collective assessment of impairment.
If there is objective evidence that an impairment loss has been incurred, the
amount of the loss is measured as the difference between the assets carrying
amount and the present value of estimated future cash flows (excluding future
expected credit losses that have not yet been incurred). The present value of the
estimated future cash flows is discounted at the financial asset’s original
effective interest rate. If a loan has a variable interest rate, the discount rate for
measuring any impairment loss is the current effective interest rate.
The carrying amount of the asset is reduced through the use of an allowance
account and the amount of the loss is recognized in surplus or deficit. Loans
together with the associated allowance are written off when there is no realistic
prospect of future recovery and all collateral has been realized or transferred to
the Department. If, in a subsequent year, the amount of the estimated
impairment loss increases or decreases because of an event occurring after the
impairment was recognized, the previously recognized impairment loss is
increased or reduced by adjusting the allowance account. If a future write-off is
later recovered, the recovery is credited to finance costs in surplus or deficit.
b. Financial liabilities
Initial recognition and measurement
Financial liabilities within the scope of PPSAS 29 are classified as financial

liabilities at fair value through surplus or deficit or loans and borrowings, as
appropriate. The Entity determines the classification of its financial liabilities
at initial recognition.
All financial liabilities are recognized initially at fair value and, in the case of
loans and borrowings, plus directly attributable transaction costs.
The Department’s financial liabilities include trade and other payables, bank
overdrafts, loans and borrowings, financial guarantee contracts.
16
Loans and borrowing
After initial recognition, interest bearing loans and borrowings are

subsequently measured at amortized cost using the effective interest method.
Gains and losses are recognized in surplus or deficit when the liabilities are
derecognized as well as through the effective interest method amortization
process.
Amortized cost is calculated by taking into account any discount or premium

on acquisition and fees or costs that are an integral part of the effective interest
rate.
Derecognition
A financial liability is derecognized when the obligation under the liability is

discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same

lender on substantially different terms, or the terms of an existing liability are
substantially modified, such an exchange or modification is treated as a
derecognition of the original liability and the recognition of a new liability, and
the difference in the respective carrying amounts is recognized in surplus or
deficit.
3.4 Cash and cash equivalents
Cash and cash equivalents are comprised of cash on hand and cash in bank,
deposits on call and highly liquid investments with an original maturity of three
months or less, which are readily convertible to known amounts of cash and are
subject to insignificant risk of changes in value. For the purpose of the
consolidated statement of cash flows, cash and cash equivalents consist of cash
and short-term deposits as defined above, net of outstanding bank overdrafts.
3.5 Inventories
Inventory is measured at cost upon initial recognition. To the extent that inventory
was received through non-exchange transactions (for no cost or for a nominal
cost), the cost of the inventory is its fair value at the date of acquisition.
After initial recognition, inventory is measured at the lower of cost and net
realizable value. However, to the extent that a class of inventory is distributed or
deployed at no charge or for a nominal charge, that class of inventory is measured
at the lower of cost and current replacement cost.
Net realizable value is the estimated selling price in the ordinary course of
operations, less the estimated costs of completion and the estimated costs
17
necessary to make the sale, exchange, or distribution.
Inventories are recognized as an expense when deployed for utilization or

consumption in the ordinary course of operations of the Department.
3.6 Investment Property
Investment properties are measured initially at cost, including transaction costs.

The carrying amount includes the replacement cost of components of an existing
investment property at the time that cost is incurred if the recognition criteria are
met and excludes the costs of day-to-day maintenance of an investment property.
Investment property acquired through a non-exchange transaction is measured at

its fair value at the date of acquisition. Subsequent to initial recognition,
investment properties are measured using the cost model and are depreciated over
its estimated useful life of [number] years.
Investment properties are derecognized either when they have been disposed of or
when the investment property is permanently withdrawn from use and no future
economic benefit or service potential is expected from its disposal. The difference
between the net disposal proceeds and the carrying amount of the asset is
recognized in the surplus or deficit in the period of derecognition.
Transfers are made to or from investment property only when there is a change in
use.
The Department use the cost model for the measurement of investment property
after initial recognition.
3.7 Property, Plant and Equipment
Recognition
An item is recognized as property, plant, and equipment (PPE) if it meets the

characteristics and recognition criteria as a PPE.
The characteristics of PPE are as follows:
 tangible items;
 are held for use in the production or supply of goods or services, for rental
to others, or for administrative purposes; and
 are expected to be used during more than one reporting period.
An item of PPE is recognized as an asset if:
 It is probable that future economic benefits or service potential associated
18
with the item will flow to the entity; and
 The cost or fair value of the item can be measured reliably.
Measurement at Recognition
An item recognized as property, plant, and equipment is measured at cost.
A PPE acquired through non-exchange transaction is measured at its fair value as

at the date of acquisition.
The cost of the PPE is the cash price equivalent or, for PPE acquired through non-
exchange transaction, its cost is its fair value as at recognition date.
Cost includes the following:
 Its purchase price, including import duties and non-refundable purchase

taxes, after deducting trade discounts and rebates;
 expenditure that is directly attributable to the acquisition of the items; and
 initial estimate of the costs of dismantling and removing the item and
restoring the site on which it is located, the obligation for which an entity
incurs either when the item is acquired, or as a consequence of having
used the item during a particular period for purposes other than to produce
inventories during that period.
Measurement After Recognition
After recognition, all property, plant and equipment are stated at cost less
accumulated depreciation and impairment losses.
When significant parts of property, plant and equipment are required to be

replaced at intervals, the Department of Agriculture recognizes such parts as
individual assets with specific useful lives and depreciates them accordingly.
Likewise, when a major repair/replacement is done, its cost is recognized in the
carrying amount of the plant and equipment as a replacement if the recognition
criteria are satisfied.
All other repair and maintenance costs are recognized as expense in surplus or
deficit as incurred.
Depreciation
Each part of an item of property, plant, and equipment with a cost that is
significant in relation to the total cost of the item is depreciated separately.
The depreciation charge for each period is recognized as expense unless it is
19
included in the cost of another asset.
Initial Recognition of Depreciation
Depreciation of an asset begins when it is available for use such as when it is in

the location and condition necessary for it to be capable of operating in the
manner intended by management.
For simplicity and to avoid proportionate computation, the depreciation is for one
month if the PPE is available for use on or before the 15th of the month.
However, if the PPE is available for use after the 15th of the month, depreciation
is for the succeeding month.
Depreciation Method
The straight line method of depreciation is adopted unless another method is more
appropriate for agency operation.
Estimated Useful Life
The Department of Agriculture uses the Schedule on the Estimated Useful Life of
PPE by classification prepared by COA.
The Department of Agriculture uses a residual value equivalent to at least five

percent (5%) of the cost of the PPE.
Impairment
An asset’s carrying amount is written down to its recoverable amount, or

recoverable service amount, if the asset’s carrying amount is greater than its
estimated recoverable service amount.
Derecognition
The Department of Agriculture derecognizes items of property, plant and

equipment and/or any significant part of an asset upon disposal or when no future
economic benefits or service potential is expected from its continuing use. Any
gain or loss arising on derecognition of the asset (calculated as the difference
between the net disposal proceeds and the carrying amount of the asset) is
included in the surplus or deficit when the asset is derecognized.
3.8 Leases
Department of Agriculture as a lessee
20
Operating lease
Operating leases are leases that do not transfer substantially all the risks and
benefits incidental to ownership of the leased item to the Department. Operating
lease payments are recognized as an operating expense in surplus or deficit on a
straight-line basis over the lease term.
Department of Agriculture as a lessor
Operating Lease
Leases in which the Department of Agriculture does not transfer substantially all
the risks and benefits of ownership of an asset are classified as operating leases.
Initial direct costs incurred in negotiating an operating lease are added to the
carrying amount of the leased asset and recognized over the lease term.
Rent received from an operating lease is recognized as income on a straight-line

basis over the lease term. Contingent rents are recognized as revenue in the period
in which they are earned.
The depreciation policy for PPE is applied to similar assets leased by the entity.
3.9 Intangible Assets
Recognition and Measurement
Intangible assets are recognized when the items are identifiable non-monetary
assets without physical substance; it is probable that the expected future economic
benefits or service potential that are attributable to the assets will flow to the
entity; and the cost or fair value of the assets can be measured reliably.
Intangible assets acquired separately are initially recognized at cost.
If payment for an intangible asset is deferred beyond normal credit terms, its cost
is the cash price equivalent. The difference between this amount and the total
payments is recognized as interest expense over the period of credit unless it is
capitalized in accordance with the capitalization treatment permitted in PPSAS 5,
Borrowing Costs.
Subsequent Expenditure on an Acquired In-process Research and Development

Project
Subsequent expenditure on an in-process research or development project
21
acquired separately and recognized as an intangible asset is:
 Recognized as an expense when incurred if it is research expenditure;

 Recognized as an expense when incurred if it is development expenditure
that does not satisfy the criteria for recognition as an intangible asset; and
 Added to the carrying amount of the acquired in-process research or
development project if it is development expenditure that satisfies the
recognition criteria for intangible assets.
Intangible Assets Acquired through Non-Exchange Transactions
The cost of intangible assets acquired in a non-exchange transaction is their fair

value at the date these were acquired.
Internally Generated Intangible Assets
Internally generated intangible assets, excluding capitalized development costs,

are not capitalized and expenditure is reflected in surplus or deficit in the period
in which the expenditure is incurred.
Recognition of an Expense
Expenditure on an intangible item shall be recognized as an expense when it is

incurred unless it forms part of the cost of an intangible asset that meets the
recognition criteria of an intangible asset.
Subsequent Measurement
The useful life of the intangible assets is assessed as either finite or indefinite.
Intangible asset with a finite life is amortized over its useful life.
The straight line method is adopted in the amortization of the expected pattern of
consumption of the expected future economic benefits or service potential.
An intangible asset with indefinite useful lives shall not be amortized.
Intangible assets with an indefinite useful life or an intangible asset not yet
available for use are assessed for impairment whenever there is an indication that
the asset may be impaired.
The amortization period and the amortization method, for an intangible asset with
a finite useful life, are reviewed at the end of each reporting period. Changes in
the expected useful life or the expected pattern of consumption of future
economic benefits embodied in the asset are considered to modify the
amortization period or method, as appropriate, and are treated as changes in
accounting estimates. The amortization expense on an intangible asset with a
22
finite life is recognized in surplus or deficit as the expense category that is
consistent with the nature of the intangible asset.
Gains or losses arising from derecognition of an intangible asset are measured as

the difference between the net disposal proceeds and the carrying amount of the
asset and are recognized in the surplus or deficit when the asset is derecognized.
Research and development costs
The Department of Agriculture expenses research costs as incurred. Development

costs on an individual project are recognized as intangible assets when the
Department can demonstrate:
 The technical feasibility of completing the asset so that the asset will be
available for use or sale
 Its intention to complete and its ability to use or sell the asset
 How the asset will generate future economic benefits or service potential
 The availability of resources to complete the asset
 The ability to measure reliably the expenditure during development
Following initial recognition, intangible assets are carried at cost less any
accumulated amortization and accumulated impairment losses.
Amortization of the asset begins when development is complete and the asset is
available for use.
It is amortized over the period of expected future benefit.
During the period of development, the asset is tested for impairment annually
with any impairment losses recognized immediately in surplus or deficit.
3.10 Provisions
Provisions are recognized when the Department of Agriculture has a present

obligation (legal or constructive) as a result of a past event, it is probable that an
outflow of resources embodying economic benefits or service potential will be
required to settle the obligation and a reliable estimate can be made of the amount
of the obligation.
Where the Department expects some or all of a provision to be reimbursed, for

example, under an insurance contract, the reimbursement is recognized as a
separate asset only when the reimbursement is virtually certain.
The expense relating to any provision is presented in the statement of financial

performance net of any reimbursement.
23
Provisions are reviewed at each reporting date, and adjusted to reflect the current
best estimate. If it is no longer probable that an outflow of resources embodying
economic benefits or service potential will be required to settle the obligation, the
provisions are reversed.
Contingent liabilities
The Department does not recognize a contingent liability, but discloses details of
any contingencies in the notes to the financial statements, unless the possibility of
an outflow of resources embodying economic benefits or service potential is
remote.
Contingent assets
The Department does not recognize a contingent asset, but discloses details of a
possible asset whose existence is contingent on the occurrence or non-occurrence
of one or more uncertain future events not wholly within the control of the
Department in the notes to the financial statements.
Contingent assets are assessed continually to ensure that developments are

appropriately reflected in the financial statements. If it has become virtually
certain that an inflow of economic benefits or service potential will arise and the
asset’s value can be measured reliably, the asset and the related revenue are
recognized in the financial statements of the period in which the change occurs.
3.11 Changes in accounting policies and estimates
The Department of Agriculture recognizes the effects of changes in accounting

policy retrospectively. The effects of changes in accounting policy are applied
prospectively if retrospective application is impractical.
The Department recognizes the effects of changes in accounting estimates

prospectively by including in surplus or deficit.
The Department corrects material prior period errors retrospectively in the first set
of financial statements authorized for issue after their discovery by:
 Restating the comparative amounts for prior period(s) presented in which

the error occurred; or
 If the error occurred before the earliest prior period presented, restating the
opening balances of assets, liabilities and net assets/equity for the earliest
prior period presented.
24
3.12 Foreign currency transactions
Transactions in foreign currencies are initially recognized by applying the spot

exchange rate between the function currency and the foreign currency at the
transaction.
At each reporting date:
 Foreign currency monetary items are translated using the closing rate;
 Nonmonetary items that are measured in terms of historical cost in a
foreign currency shall be translated using the exchange rate at the date of
the transaction; and
 Nonmonetary items that are measured at fair value in a foreign currency
shall be translated using the exchange rates at the date when the fair value
was determined.
Exchange differences arising (a) on the settlement of monetary items, or (b) on

translating monetary items at rates different from those at which they were
translated on initial recognition during the period or in previous financial
statements, are recognized in surplus or deficit in the period in which they arise,
except as those arising on a monetary item that forms part of a reporting entity’s
net investment in a foreign operation.
3.13 Revenue from non-exchange transactions
Recognition and Measurement of Assets from Non-Exchange Transactions
An inflow of resources from a non-exchange transaction, other than services in-

kind, that meets the definition of an asset are recognized as an asset if the
following criteria are met:
 It is probable that the future economic benefits or service potential

associated with the asset will flow to the entity; and
 The fair value of the asset can be measured reliably.
An asset acquired through a non-exchange transaction is initially measured at its

fair value as at the date of acquisition.
Recognition Revenue from Non-Exchange Transactions
An inflow of resources from a non-exchange transaction recognized as an asset is

recognized as revenue, except to the extent that a liability is also recognized in
respect of the same inflow.
As Department satisfies a present obligation recognized as a liability in respect of

an inflow of resources from a non-exchange transaction recognized as an asset, it
25
reduces the carrying amount of the liability recognized and recognize an amount
of revenue equal to that reduction.
Measurement of Revenue from Non-Exchange Transactions
Revenue from non-exchange transactions is measured at the amount of the

increase in net assets recognized by the entity, unless a corresponding liability is
recognized.
Measurement of Liabilities on Initial Recognition from Non-Exchange

Transactions
The amount recognized as a liability in a non-exchange transaction is the best

estimate of the amount required to settle the present obligation at the reporting
date.
Taxes
Taxes and the related fines and penalties are recognized when collected or when
these are measurable and legally collectible. The related refunds, including those
that are measurable and legally collectible, are deducted from the recognized tax
revenue.
Fees and fines not related to taxes
The Department of Agriculture recognizes revenues from fees and fines, except
those related to taxes, when earned and the asset recognition criteria are met.
Deferred income is recognized instead of revenue if there is a related condition
attached that would give rise to a liability to repay the amount.
Other non-exchange revenues are recognized when it is probable that the future
economic benefits or service potential associated with the asset will flow to the
entity and the fair value of the asset can be measured reliably.
Gifts and Donations
The Department of Agriculture recognizes assets and revenue from gifts and
donations when it is probable that the future economic benefits or service
potential will flow to the entity and the fair value of the assets can be measured
reliably.
Goods in-kind are recognized as assets when the goods are received, or there is a
binding arrangement to receive the goods. If goods in-kind are received without
conditions attached, revenue is recognized immediately. If conditions are
attached, a liability is recognized, which is reduced and revenue recognized as the
conditions are satisfied.
26
On initial recognition, gifts and donations including goods in-kind are measured
at their fair value as at the date of acquisition, which were ascertained by
reference to an active market, or by appraisal. An appraisal of the value of an
asset is normally undertaken by a member of the valuation profession who holds a
recognized and relevant professional qualification. For many assets, the fair
values are ascertained by reference to quoted prices in an active and liquid
market.
Transfers
The Department of Agriculture recognizes an asset in respect of transfers when

the transferred resources meet the definition of an asset and satisfy the criteria for
recognition as an asset, except those arising from services in-kind.
Services in-Kind
Services in-kind are not recognized as asset and revenue considering the
complexity of the determination of and recognition of asset and revenue and the
eventual recognition of expenses.
Transfers from other government entities
Revenues from non-exchange transactions with other government entities and the
related assets are measured at fair value and recognized on obtaining control of
the asset (cash, goods, services and property) if the transfer is free from
conditions and it is probable that the economic benefits or service potential related
to the asset will flow to the Department of Agriculture and can be measured
reliably.
3.14 Revenue from Exchange transactions
Measurement of Revenue
Revenue shall be measured at the fair value of the consideration received or

receivable.
Rendering of Services
The Department of Agriculture recognizes revenue from rendering of services by

reference to the stage of completion when the outcome of the transaction can be
estimated reliably. The stage of completion is measured by reference to labor
hours incurred to date as a percentage of total estimated labor hours.
Where the contract outcome cannot be measured reliably, revenue is recognized

only to the extent that the expenses incurred are recoverable.
27
Sale of Goods
Revenue from the sale of goods is recognized when the significant risks and
rewards of ownership have been transferred to the buyer, usually on delivery of
the goods and when the amount of revenue can be measured reliably and it is
probable that the economic benefits or service potential associated with the
transaction will flow to the Department.
Interest income
Interest income is accrued using the effective yield method. The effective yield
discounts estimated future cash receipts through the expected life of the financial
asset to that asset’s net carrying amount. The method applies this yield to the
principal outstanding to determine interest income each period.
Dividends
Dividends or similar distributions are recognized when the Department’s right to

receive payments is established.
In CYs 2016 and 2015, no dividend was received or paid by the Department.
Rental income
Rental income arising from operating leases on investment properties is accounted

for on a straight-line basis over the lease terms and included in revenue.
3.15 Budget information
3.15.1 Total allotment available during the year was ₱41,692,184,829.66 with
obligations incurred of ₱35,828,587,544.56 as shown below:
Fund Allotment Unexpended Balance
Category Obligation
Cluster Extended Current Total Total Reverted Extended
01 PS ₱ 0.00 ₱ 3,208,094,546.00 ₱ 3,208,094,546.00 ₱ 3,130,603,330.95 ₱ 77,491,215.05 ₱ 77,491,215.05 ₱ 0.00
MOOE 3,119,666,56.29 17,726,246,066.00 20,845,912,633.29 18,704,992,021.91 2,140,920,611.38 218,677,774.22 1,922,242,837.16
FINEX 1,575,216.97 1,756,000.00 3,331,216.97 807,211.01 2,523,995.96 1,434,168.17 1,089,827.79
CO 482,584,014.62 6,098,855,974.00 6,581,439,988.62 5,852,961,099.72 728,478,888.90 21,937,463.47 706,541,425.43
Sub-totals 3,603,825,798.88 27,034,952,586.00 30,638,778,384.88 27,689,363,673.59 2,949,414,711.29 319,540,620.91 2,629.874.090.38
02 PS 0.00 2,938,800.00 2,938,800.00 2,938,800.00 0.00 0.00 0.00
MOOE 1,059,455,374.37 977,265,000.00 2,036,720,374.37 1,294,964,877.73 741,755,496.64 445,447,252.29 296,308,244.35
FINEX 6,860.73 16,000.00 22,860.73 7,200.00 15,660.73 3,260.73 12,400.00
CO 764,892,874.68 8,123,720,000.00 8,888,612,874.68 6,739,173,336.80 2,149,439,537.88 7,525,285.17 2,141,914,252.71
Sub-totals 1,824,355,109.78 9,103,939,800.00 10,928,294,909.78 8,037,084,214.53 2,891,210,695.25 452,975,798.19 2,438,234,897.06
03 MOOE 0.00 83,910,062.00 83,910,062.00 69,132,845.58 14,777,216.42 14,777,216.42 0.00
CO 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Sub-totals 0.00 83,910,062.00 83,910,062.00 69,132,845.58 14,772,216.42 14,777,216.42 0.00
04 MOOE 0.00 40,551,473.00 40,551,473.00 33,006,810.86 8,194,662.14 8,194,662.14 0.00
CO 0.00 650,000.00 650,000.00 550,000.00 100,000.00 100,000.00 0.00
Sub-totals 0.00 41,201,473.00 41,201,473.00 33,006,810.86 8,194,662.14 8,194,662.14 0.00
Totals 5,428,180,908.66 36,264,003,921.00 41,692,184,829.66 35,828,587,544.56 5,863,597,285.10 795,485,297.66 5,068,108,987.44
Summary
PS 0.00 3,211,033,346.00 3,211,033,346.00 3,133,542,130.95 77,491,215.05 77,491,215.05 0.00
MOOE 4,179,121,941.66 18,827,972,601.00 23,007,094,542.66 20,101,546,556.08 2,905,547,986.58 686,996,905.07 2,218,551,081.51
FINEX 1,582,077.70 1,772,000.00 3,354,077.70 814,421.01 2,539,656.69 1,437,428.90 1,102,227.79
CO 1,247,476,889.30 14,223,225,974.00 15,470,702,863.30 12,592,684,436.52 2,878,015,426.78 29,559,748.64 2,848,455,678.14
Totals ₱5,428,180,908.66 ₱36,264,003,921.00 ₱41,692,184,829.66 ₱35,828,587,544.56 ₱5,863,597,285.10 ₱795,485,297.66 ₱5,068,108,987.44
28
3.15.2 The difference of ₱1,107,709,183.00 of extended allotment as of December
31, 2015 with the beginning balance extended in CY 2016 was due to the
issuance of SAROs under Fund Cluster 01 to OSEC/RFOs/Bureaus
amounting to ₱1,107,709,183.00.
3.15.3 It is also includes under Fund Cluster 02 the issuance of SARO for the
realignment of allotment from MOOE to Capital Outlay amounting to
₱513,000,000.00.
3.15.4 The Consolidated Statement of Comparison of Budget and Actual Amount

reflects the following information:
Actual Difference
Budgeted Amounts Amounts on Final Budget and
Particulars Original Final Comparable Actual
Basis
Receipts ₱ 147.21 ₱ 448.777 ₱ 579.626 ₱ (130.849)
Payments 62,623,21 42,336.47 18,087.12 24,249.35
Net Receipts/
₱(62,476.01) ₱(41,887.69) ₱(17,507.50) ₱(24,380.20)
Payments
The data on payments pertaining to original budget consists of CY 2016

Authorized appropriations and CY 2015 unpaid obligations (not yet due
and demandable) for current and continuing appropriations. The Final
amount refers to the adjusted appropriations for CY 2016 consisting of
current and continuing appropriations while the Actual amounts pertains to
disbursements for CY 2016 for current and continuing appropriations.
The data on receipts are based from the Budget of Expenditures and
Sources of Financing (BESF) and actual amount on comparable are based
from FAR 5 as of December 31, 2016.
3.16 Impairment of Non-Financial Assets
Impairment of cash-generating assets
At each reporting date, the Department of Agriculture assesses whether there is an

indication that an asset may be impaired. If any indication exists, or when annual
impairment testing for an asset is required, the Department estimates the asset’s
recoverable amount. An asset’s recoverable amount is the higher of an asset’s or
cash-generating unit’s fair value less costs to sell and its value in use and is
determined for an individual asset, unless the asset does not generate cash inflows
that are largely independent of those from other assets or groups of assets.
Where the carrying amount of an asset or the cash-generating unit (CGU) exceeds
its recoverable amount, the asset is considered impaired and is written down to its
recoverable amount.
29
In assessing value in use, the estimated future cash flows are discounted to their
present value using a discount rate that reflects current market assessments of the
time value of money and the risks specific to the asset. In determining fair value
less costs to sell, recent market transactions are taken into account, if available. If
no such transactions can be identified, an appropriate valuation model is used.
For assets, an assessment is made at each reporting date as to whether there is any
indication that previously recognized impairment losses may no longer exist or
may have decreased. If such indication exists, the Department estimates the
asset’s or cash-generating unit’s recoverable amount.
A previously recognized impairment loss is reversed only if there has been a

change in the assumptions used to determine the asset’s recoverable amount since
the last impairment loss was recognized. The reversal is limited so that the
carrying amount of the asset does not exceed its recoverable amount, nor exceed
the carrying amount that would have been determined, net of depreciation, had no
impairment loss been recognized for the asset in prior years. Such reversal is
recognized in surplus or deficit.
Impairment of non-cash-generating assets
The Department of Agriculture assesses at each reporting date whether there is an

indication that a non-cash-generating asset may be impaired. If any indication
exists, or when annual impairment testing for an asset is required, the Department
estimates the asset’s recoverable service amount. An asset’s recoverable service
amount is the higher of the non-cash generating asset’s fair value less costs to sell
and its value in use.
Where the carrying amount of an asset exceeds its recoverable service amount,
the asset is considered impaired and is written down to its recoverable service
amount. The Department of Agriculture classifies assets as cash-generating assets
when those assets are held with the primary objective of generating a commercial
return. Therefore, non-cash generating assets would be those assets from which
the Department does not intend (as its primary objective) to realize a commercial
return.
3.17 Related parties
The Department of Agriculture regards a related party as a person or an entity

with the ability to exert control individually or jointly, or to exercise significant
influence over the Department, or vice versa.
3.18 Service concession arrangements
The Department of Agriculture analyses all aspects of service concession
30
arrangements that it enters into in determining the appropriate accounting
treatment and disclosure requirements. In particular, where a private party
contributes an asset to the arrangement, the Department recognizes that asset
when, and only when, it controls or regulates the services the operator must
provide together with the asset, to whom it must provide them, and at what price.
In the case of assets other than ’whole-of-life’ assets, it controls, through

ownership, beneficial entitlement or otherwise – any significant residual interest
in the asset at the end of the arrangement. Any assets so recognized are measured
at their fair value. To the extent that an asset has been recognized, the Department
also recognizes a corresponding liability, adjusted by a cash consideration paid or
received.
3.19 Borrowing costs
The benchmark treatment is used by the Department of Agriculture in the

recognition of borrowing costs pertaining to loans borrowed by the National
Government (NG) which are recorded in the Bureau of the Treasury.
Under the benchmark treatment, borrowings costs are recognized as expense in

the period in which they are incurred, regardless of how the borrowings are
applied.
3.20 Employee benefits
The employees of Department of Agriculture are member of the Government

Service Insurance System (GSIS), which provides life and retirement insurance
coverage.
The Department of Agriculture recognizes the undiscounted amount of short term

employee benefits, like salaries, wages, bonuses, allowance, etc., as expense
unless capitalized, and as a liability after deducting the amount paid.
The Department of Agriculture recognizes expenses for accumulating

compensated absences when these are paid (commuted or paid as terminal leave
benefits). Unused entitlements that have accumulated at the reporting date are not
recognized as expense. Non-accumulating compensated absences, like special
leave privileges, are not recognized.
3.21 Measurement uncertainty
The preparation of consolidated financial statements in conformity with PPSAS,

requires management to make estimates and assumptions that affect the reporting
amounts of assets and liabilities, and disclosure of contingent assets and
liabilities, at the date of the consolidated financial statements and the reported
amounts of the revenues and expenses during the period. Items requiring the use
31
of significant estimates include the useful life of capital assets, estimated
employee benefits, rates for amortization, impairment of assets, etc.
Estimates are based on the best information available at the time of preparation of
the consolidated financial statements and are reviewed annually to reflect new
information as it becomes available. Measurement uncertainty exists in these
consolidated financial statements. Actual results could differ from these estimates.
4. Changes in Accounting Policies
Department of Agriculture adopted the following new accounting policies:
4.1 On January 1, 2014, Department of Agriculture adopted the PPSASs No. 1 to 31,
which replaced the existing standard. The new standard includes the requirement
for recognition, measurement, presentation and reclassification to conform to the
Revised Chart of Accounts prescribed under COA Circular No. 2013-002 dated
January 20, 2013. These changes are accounted for retroactively and the financial
statement was converted accordingly to conform to the new Chart of Accounts
and is effective for years beginning on or after December 31, 2014. This
accounting change had significant impact on Department of Agriculture’s
consolidated financial statements.
4.2 Revenues are recognized using the appropriate accounts to which the Department
are authorized to use and are required to be remitted to the National Treasury.
4.3 Property, Plant and Equipment and Supplies and Materials intended for
distribution to beneficiaries are recorded as Property and Equipment for
Distribution/Supplies and Materials for Distribution, and are expensed only when
actually distributed to beneficiaries.
4.4 Impairment of Assets is being studied for application on corresponding PPEs.

PPEs and Intangible Assets then are carried at cost less Accumulated
Depreciation and Impairment Losses. Major repairs are being assessed for
capitalization. Depreciation on assets is computed on a straight line method over
useful life of the asset. The residual value is computed at 5% pursuant to PPSAS
17-Property, Plant and Equipment.
5. Prior Period Adjustments
The Department of Agriculturehas determined that fundamental errors of prior years

are corrected by adjusting directly to Accumulated Surplus/(Deficit) account. Errors
affecting the current year’s operations are charged to the current year’s accounts.
32
6. Cash and Cash Equivalents
As of December 31, As of December 31,

Accounts
2016 2015
Cash on Hand ₱ 16,419,701.08 ₱ 9,087,483.87
Cash in Bank - Local Currency 1,793,263,132.52 2,712,308,744.82
Cash in Bank - Foreign Currency 1,070,096,173.32 501,738,069.91
Treasury/Agency – Cash Accounts 454,392,437.66 1,223,965,208.82
Total Cash and Cash Equivalents ₱3,334,171,444.58 ₱4,447,099,507.42
6.1 The Cash on Hand balance consists of Cash-Collecting Officers amounting to

₱13,430,118.64which represents undeposited collection of excess cash
advances/fund transfers of various RFUs/Bureaus, and Petty Cash account in the
amount of ₱2,989,582.44which represents cash in the hands of the accountable
officers for the payment of petty or miscellaneous expenses which cannot be
conveniently paid thru check by concerned offices/project.
6.2 The Cash in Bank, Local Currency is composed of account balance of Cash in
Bank – Bangko Sentral ng Pilipinas, Cash in Bank-Local Currency, Current
Account and Cash in Bank-Local Currency, Savings Account amounting to
₱2,163.66, ₱1,791,011,646.99 and ₱2,249,321.87 respectively. Local Currency,
Current Account includes funds received from different agencies for the
implementation of various projects. It is also includes funds received from
different agencies for the implementation of various projects; transfer of funds
from dollar to local currency account; revolving funds in BPI authorized under
PD 1433 (Plant Quarantine Law), RA 7308 (Seed Act), and RA 9168 (Plant
Variety Protection Fund); revolving funds in ATI authorized under RA 1578;
revolving funds in BAI authorized under RA 7308; and various grants and
donations.
6.3 The Cash in Bank, Foreign Currency is composed of the account balance of Cash
in Bank - Foreign Currency, Current Account and Cash in Bank – Foreign
Currency, Saving Account of ₱305,110,379.08 and ₱764,985,794.24 respectively,
representing cash received by DA OSEC, RFOs and Bureaus for the
implementation of various foreign assisted projects.
6.4 The Cash - Treasury/Agency – Cash Accounts is composed of account balances

of Cash–Treasury/Agency Deposit, Special Account of ₱349,880,114.73, Cash –
Treasury/Agency Deposit, Trust of ₱104,512,322.93. Cash-Treasury/Agency
Deposit Account includes collection of loans granted from various proponents
under Agricultural Competitiveness Enhancement Fund (ACEF), collection of
unused fund transfer under Philippine Climate Change Adaptation Project
(PhilCCAP) and also includes dormant account from Comprehensive Agrarian
Reform Program (CARP under Fund 158 for various RFOs. Cash –
Treasury/Agency Deposit, Trust includes collection of bids and security bond,
receipts of funds transfer of various RFOs from other national government
33
agencies for the implementation of various program/project which are deposited
to Bureau of Treasury waiting for the issuance of Notice of Cash Allocation
(NCA) from Department of Budget and Management.
7. Investments
7.1 Investments
7.1.1 Reconciliation of the Non-Current Investments:
NON-CURRENT INVESTMENTS
As of December 31, 2016
(in thousand pesos)
Financial Financial Investments
Investments
Particulars Assets Held Assets – in Joint TOTAL
in GOCCs
to Maturity Others Venture
Beginning Balance as of
January 1, 2016 ₱235,944.28 ₱235,944.28
Additional investments made
Fair value increase
Amortization of discount on the
acquisition of investment -
Reclassification from a different
class of investment
Balance as of December 31,
2016 ₱235,944.28 ₱235,944.28
The Non-Current Investments under Financial Assets – Others, composed of

Investment in Stock amounting to ₱8,126,296.64includes dormant balance of
RFO VIII amounting to ₱7,520,556.64 million under CARP-Fund 158. Other
Investments amounting to ₱227,817,982.38, includes the amount of
₱26,195,598.98 of BAI which are balances from previous years and have no
Subsidiary Ledgers and these are all subject for verification. It also includes
dormant balance amount of ₱111,637,880.99 under CARP-Fund 158 which
represent carry-over balances.
7.1.2 Total Investments:
As of December 31, 2016 As of December 31, 2015

Particulars
(in thousand pesos) (in thousand pesos)
Total Current Investments ₱ 0.00 ₱ 0.00
Total Non-Current Investments 235,944.28 235,944.28
Total Investments ₱235,944.28 ₱235,944.28
34
8. Receivables
8.1 Loans and Receivables
2016 2015
Accounts
Non-
Current Total Total
Current Current Non-Current
Accounts Receivable ₱ 18,234.11 ₱ 18,234.11 ₱ 17,994.96 ₱ 17,994.96
Allowance for Impairment -
Accounts Receivable (4,810.19) (4,810.19) (4,821.13) (4,821.13)
Net Value - Accounts Receivable 13,423.92 13,423.92 13,173.83 13,173.83
Loans Receivable - Government-
Owned and/or Controlled
Corporations 1,656,130.37 1,656,130.37 1,657,892.14 1,657,892.14
Loans Receivable – GOCCs (31,693.35) (31,693.35) (0.00) (0.00)
Net Value - Loans Receivable -
GOCCs 1,624,437.02 1,624,437.02 1,657,892.14 1,657,892.14
Loans Receivable - Local
Government Units 244,511.56 244,511.56 247,893.29 247,893.29
Loans Receivable - Local
Government Units (7,101.68) (7,101.68) (0.00) (0.00)

LGUs 237,409.88 237,409.88 247,893.29 247,893.29
Loans Receivable - Others 5,592,681.29 5,592,681.29 5,644,771.00 5,644,771.00
Loans Receivable - Others (123,128.74) (123,128.74) (72,090.38) (72,090.38)
Others 5,469,552.55 5,469,552.55 5,572.680.62 5,572.680.62
TOTAL ₱7,344,823.38 ₱0.00 ₱7,344,823.38 ₱7,491,639.88 ₱0.00 ₱7,491,639.88
8.1.1 The account balance of Accounts Receivable of ₱13,423,922.49 includes

the amount of P15,886,810.01 of BPI which represents a carry-over
balance from previous years. Effort is being exerted to locate/trace the
needed documents to reconstruct and reconcile the said amount.
8.1.2 The account balance of Loans Receivable-GOCCs account amounting to

₱1,656,130,369.55 consists mainly from DA-OSEC accounts. This
includes fund transfer to PhilRice and Quedan and Rural Credit Guarantee
Corporation (QUEDANCOR) totalling ₱656,130,369.55 and
₱1,000,000,000.00, respectively, to cover the implementation of the
Financing Program for Small Farmers and Fisherfolk using the Self-
Reliance Team (SRT) Model and Other Schemes under the Agricultural
Competitiveness Enhancement Fund (ACEF) - Fund 183 created under
Republic Act No. 8178 entitled “An Act Replacing Quantitative Import
Restrictions on Agricultural Product, Except Rice with Tariffs Creating the
Agricultural Competitiveness Enhancement Fund and for other Purposes.”
It was amended under Republic Act No. 9496 in which the fund shall
continue to be set aside up to the year 2015 after which the collection of
35
duties from Minimum Access Volume (MAV) mechanism and the setting
aside of the amount collected for the purpose shall be terminated.
8.1.3 The account balance of Loans Receivable-LGUs of ₱237,409,881.37 is

composed of loans granted to LGUs in the form of 4-wheel tractors,
irrigation pumps and warehouses with a repayment period of 5-10 years.
This also includes ₱31,648,670.00 of DA-OSEC loans granted for ACEF.
8.1.4 The accounts balance of Loans Receivable – Others of

₱5,469,552,554.52includes the account of RFU VI amounting to
₱152,521,276.48 representing loans granted to farmers in the form of
Shallow Tube Wells (STW).Open Surface Source (OSS) and Farm
Equipment payable in 10 equal installments or in five years and loans
granted under the Western Visayas (WV) “in life” Program which is in the
form of ten heads of swine per recipient payable in36 months from
delivery. This also includes the ₱3,416,643,062.76 loans granted by DA-
OSEC to various beneficiaries for the implementation of ACEF.
Reconstruction and reconciliation of the balance are on-going.
8.2 Inter-Agency Receivables
2016 2015
(in million pesos) (in million pesos)
Accounts
Non- Non-
Current Total Current Total
Current Current
Due from National Government
Agencies ₱ 6,277.20 ₱ 6,277.20 ₱ 7,048.76 ₱ 7,048.76
Due from Government-Owned and/or
Controlled Corporations 4,480.88 4,480.88 4,263.49 4,263.49
Due from Local Government Units 9,434.40 9,434.40 9,344.20 9,344.20
TOTAL ₱20,192.49 ₱0.00 ₱20,192.49 ₱20,656.45 ₱0.00 ₱20,656.45
8.2.1 The balance of account Due from NGAs of ₱6,277,203,740.75 represents

fund transfer made by DA-OSEC, RFUs and Bureaus to NAFC, and
PhilRice; deposit made to Procurement Service for the purchase of
supplies and materials; and to BFAR, ACPC, National Anti-Poverty
Commission (NAPC), NMIS, Department of Agriculture and Fisheries
(DAF) ARMM and other national agencies for the implementation of
various DA programs/projects.
8.2.2 The balance of account Due from GOCCs of ₱4,480,884,465.05 includes

fund transfer by Regions/Bureaus funded projects to government-owned
and controlled corporation offices and also includes fund transfer made by
DA to LBP for ACEF Project for the implementation of DA various
projects.
36
8.2.3 The balance of account Due from LGUs of ₱9,434,402,195.20 consists of
fund transferred to LGUs by DA OSEC, RFUs and Bureaus for the
implementation of various infrastructures projects and post-harvest
facilities projects such as FMRs, SWIP, farm inputs/implements and repair
and rehabilitation of existing irrigation.
8.3 Intra Agency Receivables
2016 2015
Accounts
Non- Non-
Current Current
Due from Central Office ₱ 1,576.83 ₱ 1,576.83 ₱ 1,576.83 ₱ 1,576.83
Due from Bureau 37,263.99 37,263.99 36,723.25 36,723.25
Due from Regional Offices 297,549.06 297,549.06 179,908.63 179,908.63
Due from Operating Units 503,585.98 503,585.98 263,201.86 263,201.86
Due from Other Funds 35.74 35.74 0.00 0.00
TOTAL ₱840,011.60 ₱840,011.60 ₱481,410.57 ₱481,410.57
8.3.1 The balance of account Due from Central Offices amounting to ₱1,576,828.23
consist mainly from RFO IV-A fund transferred from DA-OSEC for the
implementation of various project/program subject for liquidations.
8.3.2 The balance of account Due from Bureau amounting to ₱37,263,992.54

represents fund transferred to various Bureaus for the implementation of
various projects/ program activities which remained unliquidated as of
December 31, 2016.
8.3.3 The balance of account Due from Regional Offices amounting to

₱297,549,060.15 representing fund transferred to various regional offices
for the implementation of various project/program.
8.3.4 The balance of account Due from Operating Units amounting to

₱503,585,981.68 represents fund transferred to various Operating/Field
Units of RFOs/Bureaus for the implementation of project/programs.
8.3.5 The balance of account Due from Other Funds amounting to ₱35,740.00
consists mainly from RFU III which represents the establishment of
receivables from the collection made by other funds.
37
8.4 Other Receivables
2016
2015
(in thousand pesos)
Accounts
Non- Non-
Current Current
Receivables-
Disallowances/Charges ₱ 287,886.25 ₱ 287,886.25 ₱ 250,368.67 ₱ 250,368.67
Due from Officer and
Employees 60,576.45 60,578.05 88,442.83 88,442.83
Due from NGOs/POs 1,535,455.54 1,535,455.54 1,630,232.65 1,630,232.65
Other Receivables 81,324.64 81,324.64 58,303.30 58,303.30
Allowance for Impairment –
Other Receivables (7.26) (7.26) 0.00 0.00
Net Value – Other Receivables 81,317.38 81,317.38 58,303.30 58,303.30
TOTAL ₱1,965,235.62 ₱1,965,235.22 ₱2,027,347.45 ₱2,027,347.45
8.4.1 The balance of account Receivables-Disallowances/Charges amounting to

₱287,886,251.95 consists of disallowances issued by COA to the
regions/bureaus that became final and executory.
8.4.2 The account balance of Due from Officers and Employees amounting to
₱60,576,448.89 comprises receivables from personal calls, overpayment
of salaries, disallowed longevity pay and refunds for scholarship grants to
employees who failed to complete the study grants.
8.4.3 The account balance Due from NGOs/POs amounting to

₱1,535,455,540.05 represents fund transferred by regional/bureaus to
different foundations, cooperatives and associations for the
implementation for various projects including livelihood projects.
8.4.4 The account balance Other Receivables amounting to ₱81,324,645.36

includes the fund released by DA-OSEC to various private schools for the
implementation of ACEF Scholarship Program, which are not yet
liquidated by them as of year-end. It also includes the account for ATI
which represents loan investment granted to the different Rural
Improvement Club for livelihood program in past years; billing for
security, light and water consumed by the other government agencies
housed in ATI building; and reclassified account from Due from Other
Funds.
38
9. Inventories
2016
(in thousand pesos)
Reversal
of
Inventory
Inventory
Accounts Inventories carried at Inventories carried write-down
write-
the lower of cost and at fair value less recognized
down
net realizable value cost to sell during the
recognized
year
during the
year
Inventory Held for Sale
Carrying Amount, January 1, 2016 ₱ 152,708.00
Additions/Acquisitions during the year
Expensed during the year except write-down (152,708.00)
Write-down during the year
Reversal of Write-down during the year
Adjustments
Carrying Amount, December 31, 2016 0.00
Inventory Held for Distribution
Carrying Amount, January 1, 2016 2,712,658,366.53
Additions/Acquisitions during the year 4,403,028,219.58
Expensed during the year except write-down (1,767,932,596.08
Adjustments (700,830.43
Carrying Amount, December 31, 2016 5,347,053,159.60
Inventory Held for Consumption
Carrying Amount, January 1, 2016 564,539,289.57
Additions/Acquisitions during the year 1,128,059,616.83
Expensed during the year except write-down (577,802,735.38)
Adjustments 103,471.22
Carrying Amount, December 31, 2016 1,114,899,642.74
Semi-Expendable Machinery and Equipment
Carrying Amount, January 1, 2016
Additions/Acquisitions during the year 4,787,493.83
Expensed during the year except write-down (1,310,207.56)

Adjustments 11,230,617.75
Carrying Amount, December 31, 2016 14,707,904.02

Semi-Expendable Furniture, Fixtures & Books
Carrying Amount, January 1, 2016
Additions/Acquisitions during the year
2,924,979.52
Expensed during the year except write-down
(595,296.29)
Adjustments
4,774,304.23
Carrying Amount, December 31, 2016 7,103,987.46

TOTAL CARRYING AMOUNT, DECEMBER 31, 2016 ₱6,483,764,693.82
39
For CY 2016, the aggregate carrying amount of Inventories held for Sale, Distribution and
Consumption including the Semi Expendable PPEs increased by ₱3,205,913,606.52 from the
prior carrying amount of ₱3,277,851,097.30 mainly due to decrease in issuances and
adjustments due to reclassification from PPE to semi-expendable items.
10. Property, Plant and Equipment

Furnitur
Leased
Land Buildings Machinery e,
Infrastructure Transportation Assets Construction Heritage
(in million pesos) Land Improve and Other and Fixtures Other PPE TOTAL
Assets Equipment Improvem in Progress Assets
ments Structures Equipment and
ents
Books
Carrying Amount,
January 1, 2016 ₱ 373.62 ₱597.32 ₱1,370.66 ₱2,224.89 ₱3,013.22 ₱446,15 ₱272.99 ₱17.87 ₱13,274.36 ₱0.002 ₱1,417.63 ₱23,008.72
Additional/Acquisition 82.75 426.62 458.60 813.05 139.24 43.25 0.26 4,106.22 19.93 6,089.62
Total 680.07 1,767.28 2,683.49 3,826.27 585.39 315.72 18.13 17,380.58 1,437.56 29,098.34
Disposal/Transfer (164.89) (9.64) (128.56) (43.39) (18.95) (1,049.93) (17.58) (1,432.94)
Adjustments (6.64) (193.24) (167.76) (266.17) (56.47) (9.20) (1,556.55) 9.96 (2,243.31)
Depreciation ( As per
Statement of Financial
Performance (16.45) (7.29) (93.29) (334.11) (56,71) (16.83) (1.79) (3.73) (530.19)
Impairment Loss (As per
Statement of Financial
Performance (0.06) (0.01) (0.07)
Carrying Amount,
December 31, 2016 (As
per Statement of
Financial Position) ₱373.62 ₱656.97 ₱1,431.86 ₱2,412.81 ₱3,097.38 ₱428.82 ₱270.72 ₱16.34 ₱14,774.10 ₱0.002 ₱1,426.22 ₱24,888.83
Buildings Furnitur
Leased
Land and Machinery e,
Infrastructure Transportatio Assets Construction in Heritage
(in million pesos) Land Improve Other and Fixtures Other PPE TOTAL
Assets n Equipment Improvem Progress Assets
ments Structur Equipment and
ents
es Books
Gross Cost (Asset Account

Balance per Statement of
Financial Position) ₱373.62 ₱862,81 ₱1,450.04 ₱3,363.66 ₱5,586.63 ₱973.70 ₱410.65 ₱19.05 ₱14,774.10 ₱0.002 ₱1,454.16 ₱29,268.42
Less : Acc. Depreciation 0.00 (205.83) (18.19) (950.85) (2,486.95 (544.33) (139.32) (2.71) 0.00 0.00 (27.94) (4,376.12)
Allowance for Impairment 0.00 0.00 0.00 0.00 (2.30) (0.55)) (0.61) 0.00 0.00 0.00 (.0002) (3.47))
Carrying Amount,
December 31, 2016(As
per Statement of
Financial Position) ₱373.62 ₱656.97 ₱1,431.866 ₱2,412.81 ₱3,097.38 ₱428.82 ₱270.72 ₱16.34 ₱14,774.10 ₱0.002 ₱1,426.22 ₱24,888.83
10.1 The DA adopts the useful lives of Property, Plant and Equipment (PPE) and
depreciation rates prescribed by COA as embedded in the eNGAS. However,
some PPEs of other regions were not provided with accumulated depreciation
because the original cost and date of acquisition of the assets could no longer be
determined. Moreover, the conduct of inventory of property and reconciliation
are still on-going for some RFUs, Bureaus and FAPs to be able to reclassify and
compute the necessary accumulated depreciation.
10.2 The Infrastructure Assets is composed of account Road Networks of ₱912.25

million represent all costs incurred by the Region for the construction of Farm to
Market Roads in different Provincial/Municipalities; Water Supply System of
₱141.59 million; Power Supply Systems of ₱4.76 million and Other
Infrastructure Assets of ₱319.45 million pertains to the recorded cost of various
regional offices for the establishment of Small Water Impounding Projects
(SWIP), Diversion Dam and other water and power supplies facilities.
40
10.3 The Building and Other Structures is composed of account Office Building of
₱2,320,515,296.25representing major renovations of office building of various
Regions/Bureaus; Markets of ₱12,956,045.58; Slaughterhouses of
₱1,800,000.00; and Other Structures of ₱1,028,386,740.23which represents the
newly established/constructed goat houses, greenhouses, horse stable and seed
storage for the implementation of DA projects.
10.4 The Machineries and Equipment with a carrying value amounting to

₱3,096,376,967.55 represents purchase/acquisition of various PPEs and receipts
from other agencies which were taken up in the books of the regions/bureaus in
CY 2016.
10.5 The Construction in Progress is composed of account Construction Progress –

Land Improvement of ₱36.91 million, Construction in Progress – Infrastructure
Assets of ₱11.53 billion which pertains to the on-going construction of
infrastructure project of various regional offices which shall be transferred to
appropriate agency asset account upon completion and acceptance; and
Construction in Progress – Building & Other Structures of ₱3.21 billion includes
the amount of ₱2.118 billion for DA-OSEC for the construction of Benguet Agri-
Pinoy Trading Center and NAFC/LDC Building.
11. Biological Assets
11.1 Reconciliation of the amount of Bearer Biological Assets
Reconciliation of the Carry Amount of Bearer Biological Assets
Carrying Amount as of January 1, 2016
Increase due to purchases ₱ 253 943 259.62
43,673,195.12
Decrease due to transfer/disposal
Decrease due to sales (26,117,165.68)
(140,015.00)
Carrying Amount at December 31, 2016 ₱ 271,359,274.06
11.1.1 The Bearer Biological Assets with the Carrying Amount at

December 31, 2016of ₱271,359,274.06 composed of Breeding Stock
of₱211,614,013.85, Livestock of ₱58,234,272.71, Tree, Plant and
Crops of ₱512,787.50 and Other Bearer Biological Assets of
₱998,200.00. This includes purchase/sales of various breeding stock,
livestock and crops for the implementation various projects and
other were maintained in the research stations for the use in the
conduct of different research and development activities of
Regions/Bureaus. It also includes the amount of ₱26,117,165.68
41
represent adjustments made by Regional Field Offices that were
disposed/transferred to various LGUs/Farmers.
11.2 Reconciliation of the amount of Consumable Biological Assets
Reconciliation of the Carry Amount of Consumable Biological Assets
Carrying Amount as of January 1, 2016 ₱565,965,578.30
Increase due to purchases 75,958,520.48
Decrease due to transfer/disposal (4,288,350.00)
Decrease due to sales (11,417,178.88)
Carrying Amount at December 31, 2016 ₱626,218,569.90
11.2.1 The Consumable Biological Assets with the Carrying Amount at

December 31, 2016 of ₱626,218,569.90 composed of Livestock
held for Consumption/Sales/Distribution of ₱623,661,233.29 and
Tree, Plant and Crops held for Consumption/Sales/Distribution of
₱2,557,336.61, these represents purchase/sales of various animals
and crops for dispersal to LGUs, beneficiaries and other
program/project implementation requiring distribution of these
biological assets.
12. Intangible Assets
2016 2015
Particulars
Other Other
Computer Computer
Intangible Total Intangibl Total
Software Software
Assets e Assets
Gross Cost (Balance per Statement of
Financial Position) ₱63,806.52 ₱63,806.52 ₱57,168.41 ₱57,168.41
Less : Accumulated Amortization
(5,190.73) (5,190.73) (5,119.69) (5,119.69)
(including accumulated impairment loss)
Carrying Amount, December 31, 2015 (As
per Statement of Financial Position) ₱58,615.79 ₱58,615.79 ₱52,048.72 ₱52,048.72
12.1 Intangible asset amounting to ₱63,806,518.97 were recognized in the books of

the agency consisting of various computer software which were assessed to
have a definite useful life of 5 years and were amortized in accordance with the
newly adopted Philippine Public Sector Accounting Standards.
12.2 Of the balance, the amount of ₱8,000,000.00 represents Computer Software

acquired during the year from the Procurement Service.
42
13. Other Assets
13.1 Current and Non-Current Other Assets
2016 2015
Particulars (in thousand pesos) (in thousand pesos)
Current Non-Current Total Current Non-Current Total
Advances ₱ 261,468.06 ₱ 261,468.06 ₱ 334,756.05 ₱ 334,756.05
Prepayments 546,858.75 546,858.75 551,124.39 551,124.39
Deposits 6,385,821.10 6,385,821.10 6,259,485.68 6,259,485.68
Abandoned Property/Assets ₱ 6,738.55 6,738.55 ₱ 11,264.36 11,264.36

Accumulated Impairment
Losses – Abandoned
Property/Assets (6,401.62) (6,401.62)
Net Value 336.93 336.93 11,264.36 11,264.36
Other Assets 1,719,076.81 1,719,076.81 1,700,923.41 1,700,923.41

TOTALS ₱7,194,147.91 ₱1,719,413.74 ₱8,913,561.65 ₱7,145,366.12 ₱1,712,187.77 ₱8,857,553.89
13.1.1 Advances account includes:
Account Balance at Nature

Year-End
Advances for Operating ₱90,199,177.30 Advances granted to Agricultural
Expenses Attachés for maintenance and other
operating expenses at foreign post.
Advances for Payroll 33,754,903.18 Advances granted for payment of
salaries, wages, and other personnel
benefits not yet paid at year-end.
Advances for Special 93,667,276.67 Advances granted for special purpose
Disbursing Officers project and advances made by the
RFUs/Bureaus to their satellite
stations who are maintaining their
own disbursing unit.
Advances to Officers and 43,846,706.71 Cash advances granted for travelling
Employees expenses.
Total ₱261,468,063.86
13.1.2 The Prepayment of ₱546,858,744.15 includes the account balance

of Advances to Contractors amounting to ₱345,279,995.63
representing mobilization fee for foreign assisted and locally
funded projects of RFUs and Bureaus.
13.1.3 Deposit account includes:

Year-End
Deposit on ₱ 59,236,987.48 Balance in DA OSEC of which
Letters of Credit deposit made to Land Bank of the
Philippines (LBP for the procurement
of Very Small Aperture Terminal
43
Year-End
(VSAT) equipment to be used in the
setting-up of the National Information
Network (NIN) that will link DA-
OSEC with Regional Field Units
(RFUs) as well as with the provincial
coordinating units nationwide. Said
equipment were already distributed to
the RFUs concerned.
310,368,651.10 Deposit on Letters of Credit in BAI
which composed of loss assets due to
the closure of conduit rural banks.
Guaranty 6,015,303,963.56 Contribution/augmentation to the
Deposits Agricultural Guarantee Pool Fund
(AGPF) for Rice Self-Sufficiency
Program of the Government per
Administrative Order (AO) No. 244
dated October 23, 2008 issued by the
Office of the President
Other Deposits 911,497.00
Total ₱6,385,821,099.14
13.1.4 The account balance of Abandoned Property/Assets amounting to

₱6,738,549.32 represents abandoned properties that were classified
as unserviceable in BPI.
13.1.5 The account balance of Other Assets of ₱1,719,413,740.08 consists

of obsolete and unserviceable assets awaiting final disposition as
well as those assets still serviceable but is no longer being used by
DA-OSEC, RFUs, Bureaus and projects. Also includes balances
from other accounts that are reclassified to others assets which are
still for reconciliation.
14. Financial Liabilities
14.1 Payables
2016 2015
Current Current
Payables
Accounts Payable ₱1,336,840.19 ₱2,178,169.13
Due to Officers & Employees 27,677.67 89,305.80
Tax Refund Payable 0.00 8.24
Total Payables ₱1,364,517.86 ₱2,267,483.17
14.1.1 The Accounts Payable balance of ₱1,336,840,191.20 represents the

amount of unreleased checks and due and demandable obligations
to creditors as of December 31, 2016. This also includes DA-OSEC
and CHARMP’s payable accounts representing the accounts paid
44
by the bank under the Direct Payment Scheme which remained
outstanding in the books due to the non-issuance of the required
Notice of NCAA from the DBM pursuant to Joint Circular 2-97.
14.1.2 The account balance of Due to Officers and Employees of

₱27,677,672.69 represents claims for reimbursement of travelling
expenses, training and seminar expenses, and other operating
expenses that remained outstanding at the end of the year.
14.2 Bills/Bonds/Loans Payable
Particulars 2016(in thousand pesos) 2015(in thousand pesos)

Non- Non-
Current Current
Current Current
Bonds Payable ₱ 2.30 ₱ 2.30
Loan Payable - Domestic 1,770.85 2,770.85
Total Bills/Bonds/Loans Payable ₱1,773.15 ₱2,773.15
14.2.1 The account balance of Bonds Payable consists mainly from BAI
which are carry-over balance from previous years and subject for
verification.
14.2.2 The account balance of Loan Payable – Domestic consist mainly

for ATI which pertains to International Training Center on Pig
Husbandry (ITCPH) loans to ACEF for the development of training
farms in various regions.
15. Inter-Agency Payables
2016(in thousand pesos) 2015(in thousand pesos)

Particulars Non- Non-
Current Current
Current Current
Due to BIR ₱ 144,537.88 ₱ 288,228.90
Due to GSIS 6,754.05 11,238.38
Due to Pag-IBIG 5,269.60 7,365.72
Due to PhilHealth 2,643.83 4,641.77
Due to NGAs 1,482,313.91 1,900,279.87
Due to GOCCs 16,927.63 137,722.51
Due to LGUs 137,351.58 334,959.38 TF
Total Inter-Agency Payables ₱1,795,798.48 ₱2,684,436.53 ho
er
s
15.1 The account balance of Due to BIR of ₱144,537,882.67 represents balances
e
a
of the account of the DA-OSEC, RFUs and Bureaus which will be remitted
in CY 2017. tm
o w
ou
15.2 The Due to NGAs, Due to GOCCs and Due to LGUs amountingn to
₱1,482,313,907.21, ₱16,927,632.66 and ₱137,351,581.79, respectively,
ot
l
consist mainly of fund transfers received from source bureaus and dsDA
attached agencies for the implementation of various projects. h
a
c
e
45 cl
od
u
ni
tn
16. Trust Liabilities
2016 2015
Current Current
Trust Liabilities ₱153,208.27 ₱109,875.69
Trust Liabilities – Disaster/Risk
Reduction and Management Fund 16,806.00 49,749.00
Guaranty/Security Deposits Payable 645,030.42 571,926.82
Customers' Deposits Payable 795.59 874.34
Total Trust Liabilities ₱815.840.28 ₱732,425.85
16.1 The account Trust Liabilities amounting to ₱153,208,274.38 represents

fund transfer to DA-OSEC, RFUs and Bureaus for the implementation of
various programs/projects.
16.2 The account Trust Liabilities – Disaster/Risk Reduction and Management

Funds amounting to ₱16,806,000.00 represents fund transfer to DA-OSEC
from the President’s Social Fund for the financial assistance to government
employees affected by typhoon Yolanda and 7.2 magnitude earthquake.
This represents 50% of the total assistance subject for liquidation.
16.3 The account balance of Guaranty/Security Deposits Payable amounting to

₱645,030,471.85 includes retentions from supplier of goods and services
which will be claimed after a certain period upon completion of contracts.
It also contains remittances to the Bureau of Treasury for
bidders/performance bonds in compliance with E.O. 338 dated May 17,
1996 and Section 7 of the General Provision of 2014 GAA, that will be
requested to the Department of Budget and Management for the issuance of
NCA for contractors’ refunds after completion of the project or full
acceptance of goods and services.
16.4 The account Customers’ Deposits Payable amounting to ₱795,587.65

consists mainly from ATI which represents a comprised unclaimed bidders
bonds for the implementation of various programs/projects.
17. Deferred Credits/Unearned Income
17.1 The account balance of Other Deferred Credits of ₱103,884,051.63

represents the amount of lost assets due to closure of conduit rural banks,
lost livestock and death of animal breeders.
18. Other Payables
18.1 The account balance of Other Payables amounting to ₱276,126,751.80

represents various liabilities not falling under any specific payable accounts
like liabilities arising from employee’s loans, contribution to other than
46
mandatories and amortization of loans to various cooperatives, banks. It also
includes unpaid professional services and travelling expenses
reimbursements for Job Orders as well as travelling expenses for other
stakeholders still payable at year-end.
19. Service and Business Income
Particulars 2016 2015

Service Income ₱456,576,249.99 ₱385,972,920.14
Permit Fees 36,729,230.50 27,182,659.04
Registration Fees 13,891,221.03 12,192,947.8
Clearance and Certification Fees 3,903,346.70 3,472,072.70
Franchising Fees 37,800.00 0.00
Licensing Fees 297,030.47 277,279.84
Legal Fees 2,150.00 500.00
Inspection Fees 342,628,133.14 294,383,763.73
Verification and Authentication Fees 19,200.00 42,600.00
Processing Fees 1,912,822.00 1,491,157.00
Fines and Penalties - Service Income 14,325,889.85 14,225,078.43
Other Service Income 42,829,426.30 32,704,861.60
Business Income 68,761,388.43 67,161,359.08
Seminar/Training Fees 2,573,742.43 3,740,011.61
Rent/Lease Income 2,943,678.08 2,134,896.00
Income from Hostels/Dormitories and Other
Like Facilities 17,309,029.45 12,775,401.88
Slaughterhouse Operation 379,784.44 581,830.92
Interest Income 3,202,213.35 2,947,763.52
Fines and Penalties - Business Income 52,295.02 230,285.95
Other Business Income 42,300,645.66 44,751,169.20
Total Service and Business Income ₱525,337,638.42 ₱453,134,279.22
20. Shares, Grants and Donations

Income from Grants and Donations in Cash ₱ 0.00 ₱ 240,940.16
Income from Grants and Donations in Kind 27,852,228.62 7,225,790.21
Total Shares, Grants and Donations ₱27,852,228.62 ₱ 7,466,730.37
21. Gains

Gain on Initial Recognition of Biological Assets ₱ 707,547.46 ₱ 544,606.00
Gain on Sale of Biological Assets 13,200.00 0.00
Gain from Changes in FV Less Cost of Sell of
Biological Assets to Physical Changes 1,355,900.99 3,802,205.40
Gain on Sale of Agricultural Produce 21,810.00 0.00

Total Gains ₱ 2,098,458.45 ₱4,346,811.40
47
22. Other Non-Operating Income

Sale of Unserviceable Property ₱ 277,250.00 ₱ 0.00
Miscellaneous Income 7,943,536.04 0.00
Total Other Non-Operating Income ₱8,220,786.04 ₱ 0.00
23. Personnel Services
23.1 Salaries and Wages

Salaries and Wages - Regular ₱1,943,130,051.84 ₱1,512,207,820.12
Salaries and Wages - Casual/Contractual 0.00 1,999.81
Total Salaries and Wages ₱1,943,130,051.84 ₱1,512,209,819.93
23.2 Other Compensation

Personal Economic Relief Allowance (PERA) ₱149,127,406.14 ₱129,066,113.68
Representation Allowance (RA) 20,269,100.73 19,345,553.35
Transportation Allowance (TA) 12,350,373.29 11.816,265.15
Clothing/Uniform Allowance 30,627,813.35 24,127,537.68
Subsistence Allowance 4,419,638.75 1.555,650.00
Laundry Allowance 570,605.29 259,964.54
Quarters Allowance 115,595.01 0.00
Productivity Incentive Allowance 6,988,483.55 18,070,539.57
Overseas Allowance 42,540,783.44 42,633,531.07
Honoraria 3,982,046.43 0.00
Hazard Pay 6,276,154.97 27,327.50
Longevity Pay 1,060,746.42 3,097,911.70
Overtime and Night Pay 2,978,103.34 543,782.08
Year End Bonus 284,974,938.75 126,761,157.69
Cash Gift 29,640,525.43 25,033,174.12
Other Bonuses and Allowances 205,868,927.11 182,602,763.43
Total Other Compensation ₱801,791,242.00 ₱584,941,271.56
23.3 Personnel Benefit Contributions

Retirement and Life Insurance Premiums ₱ 228,598,972.42 ₱ 172,713,763.90
PAG-IBIG Contributions 7,347,052.41 7,596,282.42
PhilHealth Contributions 20,706,149.07 16,047,961.21
Employees Compensation Insurance Premiums 7,899,128.20 7,439,202.33
Total Personnel Benefit Contributions ₱ 264,551,302.10 ₱ 203,797,209.86
23.4 Other Personnel Benefits

Pension Benefits ₱ 0.00 ₱ 0.00
Retirement Gratuity 4,043,740.48 1,444,040.12
48
Terminal Leave Benefits 59,787,682.92 34,799,887.12
Other Personnel Benefits 63,688,744.30 78,754,764.24
Total Other Personnel Benefits ₱127,520,167.70 ₱114,998,691.48
24. Maintenance and Other Operating Expenses
24.1 Traveling Expenses

Traveling Expenses - Local ₱498,246,821.92 ₱463,714,665.46
Traveling Expenses - Foreign 52,207,967.29 58,332,004.06
Total Traveling Expenses ₱550,454,789.21 ₱522,046,669.52
24.1.2 The amount of Travelling Expenses-Local of ₱498,246,821.92

represents payment for traveling expenses incurred by
regions/bureaus/offices during fieldwork validation and
monitoring of projects and other official functions on agriculture
for the implementation of DA projects/programs.
24.1.2 The account Travelling Expenses - Foreign amounting to

₱52,207,967.29 million refers to per diems and fare cost incurred
by officials and employees of the regions/bureaus/offices invited
by the agency for participation of their programs/activities outside
the country.
24.2 Training and Scholarship Expenses

Training Expenses ₱1,168,180,936.48 ₱1,250,464,213.48
Scholarship Grants/Expenses 15,033,894.67 55,010,058.98
Total Training and Scholarship Expenses ₱1,183,214,831.15 ₱1,305,474,272.46
24.2.1 The account Training expenses amounting to ₱1,168,180,936.48

represents payment for multi-level training programs and trainings
to agricultural extension workers and their clientele.
24.3 Supplies and Materials Expenses

Office Supplies Expenses ₱198,697,898.89 ₱176,722,211.42
Accountable Forms Expenses 1,425,875.81 829,211.26
Non-Accountable Forms Expenses 84,187.12 6,006.00
Animal/Zoological Supplies Expenses 57,318,904.37 49,818,036.58
Food Supplies Expenses 0.00 5,871.35
Welfare Goods Expenses 135,699.94
Drugs and Medicines Expenses 10,879,453.76 4,751,472.92
Medical, Dental and Laboratory Supplies Expenses 60,477,240.76 40,726,415.17
Fuel, Oil and Lubricants Expenses 94,040,619.11 100,868,856.87
49
Agricultural and Marine Supplies Expenses 2,263,789,676.55 1,908,028,665.75
Textbooks and Instructional Materials Expenses 195,747.00 423,636.50
Chemical and Filtering Supplies Expenses 23,260,025.49 1,561,657.43
Semi-Expendable Machinery and Equipment Expense 31,283,721.76 0.00
Semi-Expendable Furniture, Fixtures & Books Expense 18,700,560.09 0.00
Other Supplies and Materials Expenses 131,525,659.63 145,738,273.92
Total Supplies and Materials Expenses ₱2,891,815,270.28 ₱2,429,480,315.17
24.3.1 The amount of Agricultural Supplies Expenses of

₱2,263,789,676.55 represents payment for the purchase of certified
seeds, planting materials and other agricultural supplies which
were directly issued to beneficiaries/recipients.
24.4 Utility Expenses

Water Expenses ₱ 28,550,096.23 ₱ 28,728,504.53
Electricity Expenses 172,661,685.79 160,722,143.65
Gas/Heating Expenses 10,452.00 0.00
Total Utility Expenses ₱201,222,234.02 ₱189,450,648.18
24.5 Communication Expenses

Postage and Courier Services ₱ 8,061,789.88 ₱ 5,695,135.37
Telephone Expenses 67,069,455.19 61,092,441.67
Internet Subscription Expenses 22,183,369.54 18,669,674.27
Cable, Satellite, Telegraph and Radio Expenses 8,893,695.94 3,747,821.22
Total Communication Expenses ₱106,208,310.55 ₱ 89,205,072.53
24.6 Awards/Rewards and Prizes

Awards/Rewards Expenses ₱53,406,584.75 ₱ 57,469,245.17
Prizes 27,975,627.50 99,212,044.75
Total Awards/Rewards and Prizes ₱81,382,212.35 ₱156,681,289.92
24.6.1 The Awards/Rewards Expenses and Prizes amounting to

₱53,406,584.75 and ₱27,975,627.50, respectively, represents
payment of RFUs/Bureaus for rice achievers awards.
24.7 Survey, Research, Exploration and Development Expenses

Survey Expenses ₱ 220,000.00 ₱ 68,567.70
Research, Exploration and Development Expenses 1,320,969.92 2,254,661.58
Total Survey, Research, Exploration and
₱1,540,969.92 ₱2,323,229.28
Development Expenses
50
24.8 Demolition/Relocation and Desilting/Dredging Expenses

Demolition and Relocation Expenses ₱172,316.10 ₱52,000.00
24.9 Confidential, Intelligence and Extraordinary Expenses

Extraordinary and Miscellaneous Expenses ₱6,930,086.01 ₱7,011,432.56
Total Confidential, Intelligence and Extraordinary Expenses ₱6,930,086.01 ₱7,011,432.56
24.10 Professional Services

Legal Services ₱ 3,489,229.61 ₱ 2,347,449.26
Auditing Services 3,050,891.13 4,972,730.98
Consultancy Services 232,633,431.19 251,063,143.63
Other Professional Services 687,469,222.22 730,665,341.58
Total Professional Services ₱926,642,774.15 ₱989,048,665.45
24.9.1 The Consultancy Services of ₱232,633,431.19 includes payment

for consultancy services in different NGOs for community
mobilization and participatory planning services in the different
barangays of provinces; and consultancy services under Natural
Resource Management Project (NRMP) and Community Fund for
Agricultural Development (CFAD) Technical Assistant.
24.9.2 The amount of Other Professional Services of ₱687,469,222.22

represents payment for the professional fees of contractual
employees of the RFUs/Bureaus.
24.11 General Services

Environment/Sanitary Services ₱ 50,488.21 ₱ 143,930.62
Janitorial Services 35,623,678.36 31,100,646.72
Security Services 124,203,144.87 106,357,884.61
Other General Services 52,696,537.3 52,882,418.07
Total General Services ₱212,573,848.74 ₱190,484,880.02
24.12 Repairs and Maintenance

Repairs and Maintenance – Investment Property ₱ 0.00 ₱ 0.00
Repairs and Maintenance - Land Improvements 8,295,466.79 6,102,760.07
Repairs and Maintenance - Infrastructure Assets 10,633,075.52 299,856.81
Repairs and Maintenance - Buildings and Other Structures 125,779,302.62 123,573,152.06
Repairs and Maintenance - Machinery and Equipment 24,762,145.00 24,288,680.40
Repairs and Maintenance - Transportation Equipment 75,925,748.02 67,483,955.66
Repairs and Maintenance - Furniture and Fixtures 1,336,600.11 1,973,153.86
51
Repairs and Maintenance –Leased Assets Improvement 311,303.43 0.00
Repairs and Maintenance –Semi-Expendable Furniture,
Fixtures and Books 107,731.00 0.00
Repairs and Maintenance - Other Property, Plant and
Equipment 870,088.62 976,296.81
Total Repairs and Maintenance Expenses ₱248,021,461.11 ₱224,697,855.67
24.13 Taxes, Insurance Premiums and Other Fees

Taxes, Duties and Licenses ₱ 3,815,532.95 ₱ 4,498,898.08
Fidelity Bond Premiums 7,897,916.34 6,152,320.48
Insurance Expenses 16,536,914.63 14,363,235.16
Total Taxes, Insurance Premiums and Other Fees ₱28,250,363.92 ₱25,014,453.72
24.14 Labor and Wages

Labor and Wages ₱297,239,790.82 ₱ 362,427,655.164
24.15 Other Maintenance and Operating Expenses

Advertising Expenses ₱ 55,417,737.17 ₱ 46,438,523.98
Printing and Publication Expenses 48,964,126.16 33,510,595.97
Representation Expenses 150,942,540.96 109,795,881.28
Transportation and Delivery Expenses 8,567,949.70 15,611,328.98
Rent/Lease Expenses 87,901,221.44 83,125,295.33
Membership Dues and Contributions to Organizations 4,809,088.77 5,171,938.15
Subscription Expenses 3,386,178.01 6,367,791.20
Donations 3,140,397,232.25 2,590,037,364.51
Other Maintenance and Operating Expenses 788,516,007.75 416,135,776.46
Total Other Maintenance and Operating Expenses ₱4,288,902,082.21 ₱3,306,194,495.86
24.13.1 The Other Maintenance and Operating Expenses includes the

account of Donation amounting to ₱3,140,397,232.25 represents
various grants in the implementation of the agency’s banner
programs with partner agencies and GOCCs, LGUs, NGOs/POs
and academic institutions. These programs include distribution of
subsidized seeds and fertilizers as farm inputs and construction
and purchase of postharvest facilities and other postharvest
infrastructures, rehabilitation of farm-to-market roads, livelihood
and training assistance to beneficiaries and management and
administration of special studies and researches.
25. Financial Expenses

Guarantee Fees ₱ 0.00 ₱ 0.00
52
Bank Charges 593,362.35 586,258.90
Other Financial Charges 25,800.00 19,477.50
Total Financial Expenses ₱ 619,162.35 ₱ 614,576.36
26. Non-Cash Expenses
26.1 Depreciation

Depreciation - Land Improvements ₱ 16,454,007.19 ₱ 10,833,293.29
Depreciation - Infrastructure Assets 7,286,070.72 5,383,258.40
Depreciation - Buildings and Other Structures 93,292,186.14 64,776,634.30
Depreciation - Machinery and Equipment 334,106,803.60 305,557,415.12
Depreciation - Transportation Equipment 56,705,836.62 45,100,201.52
Depreciation - Furniture, Fixtures and Books 16,832,804.82 15,943,376.15
Depreciation - Leased Assets Improvements 1,785,634.28 506,142.40
Depreciation - Other Property, Plant and Equipment 3,725,565.01 6,083,860.79
Total Depreciation ₱530,188,908.38 ₱454,184,181.97
26.2 Amortization

Amortization – Intangible Assets ₱60,144.35 ₱807,873.89
26.3 Impairment Loss

Impairment Loss –Loans and Receivables ₱89,833,472.11 ₱13,989,115.50
Impairment Loss - Inventories 966.99
Impairment Loss – Other Receivables 7,262.15 0.00
Impairment Loss – Property, Plant and Equipment 67,765.87 175,991.94
Impairment Loss - Biological Assets 0.00 0.00
Impairment Loss – Other Assets 6,401,621.85 0.00
Total Impairment Loss ₱96,310,121.98 ₱14,166,074.43
26.3.1 The Impairment Loss – Loans and Receivables of ₱89,833,472.11

represents assessment on loans and receivables which provided as
per audit recommendation in accordance with PPSAS 26 which
states that an entity who adopts the accrual method of accounting
should provide impairment which is a loss on the economic benefit
or service potential of an asset. The Impairment Loss –Loans
Receivables provided is 5% of the ending balance of RFOs for the
loans receivable accounts where are already past due for more than
one year.
26.3.2 The Impairment Loss – PPE of ₱67,765.87 represents the amount

assessed on reporting date that non-serviceable PPEs are impaired.
The impairment was based on information that “Evidence is
53
available of physical damage of assets” although their economic
life is still not fully exhausted.
26.4 Losses

Loss on Sale of Biological Assets ₱72,360.00 ₱0.00
27. Net Financial Assistance/Subsidy
Financial Assistance/Subsidy from NGAs

Subsidy from National Government ₱26,792,906,194.73 ₱26,261,281,124.07
Subsidy from Other NGAs 0.00 760,119.60
Total Financial Assistance/Subsidy from
NGAs ₱26,792,906,194.73 ₱26,262,041,243.67
Less: Financial Assistance/Subsidy to NGAs, LGUs, NGOs/POs and Others

Financial Assistance to NGAs ₱ 9,293,775.53 ₱ 126,572,909.70
Financial Assistance to Local Government Units 111,667,768.56 782,682,670.46
Financial Assistance to NGOs/POs 103,774,287.00 281,690,821.23
Subsidies to Regional Offices/Staff Bureaus 16,220,000.00 0.00
Subsidies – Others 116,195,333.37 417,183,630.30
Total Financial Assistance/Subsidy to NGAs,
LGUs, NGOs/POs and Others ₱357,151,164.46 ₱1,608,130,031.69
Net Financial Assistance/Subsidy ₱29,435,755,030.27 ₱24,653,911,211.98
27.1 For CY 2016, the total amount of Notice of Cash Allocation (NCA)
amounting to₱37,306,494,200.46 was received from the DBM for payment
of operational expenses and liabilities. The amount of ₱26,792,906,194.73
as reflected in the Detailed Income Statement is net of reversion of
unutilized NCA and remittance of tax withheld thru Tax Remittance Advice
(TRA).
27.2 The account Financial Assistance to NGAs/LGUs/NGOs/POs, Subsidies to

Regional Offices/Staff Bureaus and Subsidies-Others amounting
to₱9,293,775.63, ₱111,667,768.56, ₱103,774,287.00, ₱16,220,000.00and
₱116,195,333.37, respectively, was due to liquidation of fund transfers to
NGAs/LGUs/NGOs of Regions/Bureaus.
28. Non-Operating Income, Gain or Losses
28.1 Non-Operating Income/Gain

Gain on Foreign Exchange (FOREX) ₱41,474,328.88 ₱31,591,353.83
54
Gain on Sale of Investment Property 0.00 0.00
Gain on Sale of Property, Plant and Equipment 1,088,005.00 110,030.21
Other Gains 0.00 642,850.00
Total Non-Operating Income/Gain ₱42,562,333.88 ₱32,344,234.14
28.2 Non Operating Losses

Loss on Foreign Exchange (FOREX) ₱(39,937,352.81) ₱(10,611,618.24)
Loss on Sale of Investment Property 0.00 (283.89)
Loss on Sale of Property, Plant and Equipment (9,199,145.45) (718,768.24)
Loss of Assets (3,453,693.03) (34,000.00)
Other Losses 0.00 (59,924.22)
Total Non-Operating Losses ₱(52,590,191.29) ₱(11,424,594.59)
The amount of Gain and Loss on Foreign Exchange of ₱41,474,328.88 and

₱39,937,352.81,respectively,is the accumulated difference between the
rate used in the Notice of Cash Allocation and the prevailing exchange rate
of the depository bank at the date of transaction or transfer of the dollar to
the peso account. The loss was due primarily to the appreciation of the
peso vis-à-vis the dollar from the time it was received by the Treasury and
value-dated by the BSP, and the time it was actually converted to peso and
deposited to the Peso Account.
29. Accumulated Surplus (Deficit)
29.1 The Accumulated Surplus (Deficit) consists of:
Accumulated Surplus(Deficit), December 31, 2015 ₱65,658,426,984.49

Adjustments in the beginning balance (9,313,488,181.61)
Net Surplus (Deficit) for CY 2016 15,200,421,483.25
Adjustment of Net Revenue Recognized directly in (744,951,182.65)
Net Assets/Equity
Others (160,277,111.98)
Accumulated Surplus (Deficit), December 31, 2016 ₱70,640,131,991.50
29.2 Prior Period Adjustments amounting to ₱8,642,903,986.69 represents the net

effects of various adjustments that were made on the prior year’s transaction
affecting the other accounts.
29.3 Other Adjustments amounting to ₱666,436,573.40 represents material

errors/unrecorded revenues/expenses, transfer/dropping of various PPE and
adjustment of beginning balance reclassification of accounts.
29.4 Adjustment of Net Revenue Recognized directly in Net Assets/Equity

amounting to ₱744,946,152.82 represents collection of income, refund of cash
55
advances/funds transfer and other payments which are remitted to the Bureau
of Treasury of Regions/Bureaus.
29.5 Public Infrastructures amounting to ₱160,277,111.98 consists of roads,

networks, water supply systems and other public infrastructure assets which
were turned-over to the Local Government Units.
30. Statement of Cash Flows
30.1 Cash Beginning Balance of ₱4,447,099,507.42 was adjusted to

₱4,431,970,992.44 due to reclassification made by RFOs/Staff Bureaus of
₱15,128,514.98.
31. Key Management Interest:
31.1 Key Management Personnel
The key management personnel of the Department of Agriculture are the

Secretary, the Undersecretary’s and the Assistant Secretary’s. The
governing body consists of DA officials are appointed by the President.
31.2 Key Management Personnel Compensation
32.2.1 The aggregate remuneration of DA officials determined on a fulltime

equivalent basis receiving remuneration within this category are
shown below:
Particulars Aggregate Remuneration

Basic Salary ₱12,221,011.86
Allowances and Other Benefits 5,150,074.05
Indirect Benefits 16,500.00
Extraordinary and
Miscellaneous Expenses 1,776,646.48
Total ₱19,164,232.39
31.3 Remuneration and Compensation Provided to Close Family Members

of Key Personnel
During the reporting period there were no close family members of key
management personnel of Department of Agriculture.
56

Department of Agriculture Notes To Consolidated Financial Statements For The Year Ended December 31, 2016

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Department of Agriculture Notes To Consolidated Financial Statements For The Year Ended December 31, 2016

Uploaded by

Copyright:

Available Formats

Department of Agriculture

Notes to Consolidated Financial Statements

1. General Information/Agency Profile

1.1 The consolidated financial statements of the DEPARTMENT OF

1.2.3 Agri-Pinoy Livestock - The program is geared towards the attainment of

1.3 Agency Vision

A modernized smallholder agriculture and fisheries; a diversified rural economy

1.4 Agency Mission

2. Statement of Compliance and Basis of Preparation of Financial Statements

3. Summary of Significant Accounting Policies

3.1 Basis of accounting

The consolidated financial statements are prepared on an accrual basis in

a. Consolidated Entities/Controlled Entities

The consolidated financial statements reflect the assets, liabilities, revenues,

Consolidated in the financial statements of the Department are the transactions

a) Five Staff Bureaus

 Agricultural Training Institute ( ATI )

b) 15 Regional Field Units

 Regional Field Unit I - San Fernando City, La Union

 Regional Field Unit IV-B - ATI Bldg. Diliman, Quezon City

 Cordillera Highland Agricultural Resource Management Project

 Rural Development Project in the Philippines (RDPP)

3.3 Financial instruments

The subsequent measurement of financial assets depends on their

Financial assets at fair value through surplus or deficit

Loans and receivables are non-derivative financial assets with fixed or

The Department derecognizes a financial asset or, where applicable, a part of a

Impairment of financial assets

The Department assesses at each reporting date whether there is objective

 The debtors or a group of debtors are experiencing significant financial

Initial recognition and measurement

Financial liabilities within the scope of PPSAS 29 are classified as financial

After initial recognition, interest bearing loans and borrowings are

Amortized cost is calculated by taking into account any discount or premium

A financial liability is derecognized when the obligation under the liability is

When an existing financial liability is replaced by another from the same

3.4 Cash and cash equivalents

Inventories are recognized as an expense when deployed for utilization or

3.6 Investment Property

Investment properties are measured initially at cost, including transaction costs.

Investment property acquired through a non-exchange transaction is measured at

3.7 Property, Plant and Equipment

An item is recognized as property, plant, and equipment (PPE) if it meets the

The characteristics of PPE are as follows:

An item of PPE is recognized as an asset if:

 It is probable that future economic benefits or service potential associated

 The cost or fair value of the item can be measured reliably.

An item recognized as property, plant, and equipment is measured at cost.

A PPE acquired through non-exchange transaction is measured at its fair value as

Cost includes the following:

 Its purchase price, including import duties and non-refundable purchase

Measurement After Recognition

When significant parts of property, plant and equipment are required to be

The depreciation charge for each period is recognized as expense unless it is

Initial Recognition of Depreciation

Depreciation of an asset begins when it is available for use such as when it is in

Estimated Useful Life

The Department of Agriculture uses a residual value equivalent to at least five

An asset’s carrying amount is written down to its recoverable amount, or

The Department of Agriculture derecognizes items of property, plant and

Department of Agriculture as a lessee

Department of Agriculture as a lessor

Rent received from an operating lease is recognized as income on a straight-line