Republic of the Philippines ENERGY REGULATORY COMMISSION San Miguel Avenue, Pasig City o7 RESOLUTION NO. ___, SERIES OF 2012 A RESOLUTION ADOPTING THE ACCOUNTING AND COST ALLOCATION MANUAL (ACAM) FOR ELECTRIC COOPERATIVES WHEREAS, on September 22, 2003, the Energy Regulatory Commission (ERC) promulgated the Business Separation Guidelines (BSG) to govern the business separation as well as the structural and functional unbundling of the business activities of electric power industry participants pursuant to Section 36 of Republic Act No. 9136 (RA. 9136), otherwise known as the “Electric Power Industry Reform Act of 2001 (EPIRA)" and Rule 10 of its Implementing Rules and Regulations (IRR); WHEREAS, on June 21, 2006, the ERC amended the BSG by promulgating Resolution No. 49, Series of 2006, entitled “A Resolution Amending the Business Separation Guidelines (BSG)"; WHEREAS, in compliance with the BSG, several electric cooperatives (ECs) filed their respective applications for the approval of their Business Separation and Unbundling Plans (BSUPs) and Accounting and Cost Allocation Manuals (ACAMSs); WHEREAS, on various dates, the ECs filed their joint motions to withdraw their BSUP and ACAM applications; MERC Case No. 2011-008 RM Resolution/June 11, 2012 Page 2 of 4 WHEREAS, the ERC issued Orders granting the said motions; WHEREAS, on September 15, 2011, the Philippine Rural Electric Cooperatives Association, Inc. (PHILRECA) filed a “Petition to Initiate Rule- Making’ for the adoption of the proposed ACAM for ECs; WHEREAS, the Commission conducted regional expository presentations and public consultations on the said petition in Luzon, Visayas and Mindanao; WHEREAS, PHILRECA filed several manifestations signifying the intentions of its member-ECs to support the aforesaid petition; WHEREAS, the aforesaid petition is intended: a) to apply to all ECs registered under the National Electrification Administration (NEA) and the Cooperative Development Authority (CDA); b) to ensure the separation of audited accounts of each business related undertaking conducted by the ECs; ©) to ensure that the costs of regulated services and activities are fairly and reasonably allocated and reflected as the efficient costs of the respective services and activities of the ECs; and d) to provide full and proper documentation of the accounting policies and principles to govern the ECs in preparing their Accounting Separation Statements in accordance with the BSG; NOW THEREFORE, the ERC, after thorough and due deliberation and after considering all the comments submitted by interested parties, RESOLVES to ADOPT the “Accounting and Cost Allocation Manual (ACAM) for Electric Cooperatives (ECs)’, hereto attached as “Annex A”. ™ERC Case No. 2011-008 RM Resolution/June 11, 2012 Page 3 of 4 This Resolution shall take effect fifteen (15) days following its complete publication in a newspaper of general circulation in the Philippines. Let copies of this Resolution be furnished the University of the Philippines Law Center-Office of the National Administrative Register (UPLC-ONAR) and all electric cooperatives (ECs). Pasig City, June 11, 2012. JO! REYES Ce issioner = vein) OF ALFREDO J. NON GLORIA VICTORI YAP-TARUC Commissioner Commissioner 2011-008 RM PHILRECA; Resolution ACAMERC Case No. 2011-v08 RM Resolution/June 11, 2012 Page 4 of 4 Copy Furnished: 4. All Electric Cooperatives 2. The General Manager PHILRECA 3. The Administrator National Electrification Administration 4. The Manager University of the Philippines Law Center-Office of the National Administrative Register (UPLC-ONAR) iman, Q.C.ACCOUNTING AND COST ALLOCATION MANUAL ciaeoaamtinianeasACCOUNTING AND COST ALLOCATION MANUAL FOR ELECTRIC COOPERATIVES TABLE OF CONTENTS Page INTRODUCTION 14 Objectives of the ACAM Scope & Contents of the Manual 3. Administration of the Manual 4. Procedures on Amendment of the Manual 5. Effectivity 6. Implementation and Compliance DEFINITION OF TERMS 5:20 Chapter !- BASIC ACCOUNTING AND REPORTING PRINCIPLES 21-26 1. ECs Adoption of Basic Accounting Principles 2. Reporting Principles Chapter ll- CHART OF ACCOUNTS AND ACCOUNT DESCRIPTION 27-103 1. Purpose and Scope 2. Account Coding 3. Chart of Accounts with Account Codes Detailed Chart of Accounts -~ refer to Appendix “A” 4. Account Description — Assets 5. Account Description — Liabilities 6. Account Description ~ Equity 7. Account Description — Revenues 8. Account Description — Expenses ACAM for ECsChapter Ill - APPLICATION OF ACCOUNTING CONCEPTS 1. Assets Property, Plant and Equipment Cash Receipts and Disbursements Consumer Accounts Receivables 2. Liabilities Consumers’ Deposits Advances from Customers Loans Payable 3. Members’ Equity 4. Revenues and Expenses Chapter IV - ALLOCATION METHODS 1, Overview of Allocation 2. Principles of Allocation 3. Allocation Factors 104-145, 146-154 Accounts with Allocation Factors ~ refer to Appendix “B” Chapter V ~ INTER-SEGMENTAL TRANSACTIONS AND TRANSFER PRICING PRINCIPLES Chapter VI — FINANCIAL REPORTS APPENDICES 1. Appendix “A” — Chart of Accounts 2. Appendix “B” — Allocation Factors 3. Appendix “C” ~ Accounting Separation Statements 155-159 160-163 9 pages 9 pages 15 pages ACAM for ECs 7 eCACCOUNTING AND COST ALLOCATION MANUAL INTRODUCTIONSection 36 of the Republic Act 9136, otherwise known as the Electric Power Industry Act (the EPIRA) and Rule 10 of the Implementing Rules and Regulations issued Pursuant to that act (the IRR) mandate clectric power industry players to structurally and functionally unbundle theic business activities into generation, transmission, distribution, and supply. The same rules further direct the unbundling of said activities into regulated and unregulated sectors following specifically the guidelines set by the Energy Regulatory Commission (ERC) under Resolution No. 26 Series 2006 which is known as the Business Separation Guidelines, As Amended (BSG). ‘The guidelines intend to implement the requirements of Section 26 of the EPIRA and Rule 7, Section 5(¢) of the IRR that separate audited accounts shall be maintained for fach business conducted by the Distribution Utility. In addition, cach business undertaking shall not subsidize nor hamper its distribution assets in ay way to support other business activities, and that the cost of regulated services und activities are allocated on a fair and reasonable basis to reflect the efficient costs of each business segment. 1. OBJECTIVES OF THE ACCOUNTING COST ALLOCATION MANUAL ‘This Accounting and Cost Allocation Manual (ACAM) is prepared to provide full and Proper documentation of the accounting policies and principles 10 be used by each Electric Cooperative registered either under the National Electtficatio Administration (NEA) or under the Cooperative Development Authority (CDA), in preparing the Accounting Separation Statements in accordance to the guidelines set by the Energy Regulatory Commission (ERO), including: 11 Allocation methodologies used to allocate costs and revenues to and between segments, 12 Interpretation oF the Philippine Financial Reporting Standards (PFRS) and Philippine Accounting Standards (PAS) as applicable to the industry; 13 Depreciation policies and methodologies for each class of assets; ACAM for ECs Page 214 Transfer pricing policies used for transactions between business segments or between a business segment and another activity undervaken by the EC, consistent with the inter-segmental transactions and transfer pricing principles applicable to the industry; 15° Procedures to be adopted for whatever changes that shall be made in the ACAM in accordance to the guidelines set by the ERC: 16 Guidance to accounting areas with differences in accounting treatment for rate- regulated industry as necessary. 2. SCOPE AND CONTENTS OF THE MANUAL This manual covers the accounting process involving documentation, recording, classification, interpretation and analysis of financial reports. Itis divided into six (6) atts as follows: |. Basic Accounting and Reporting Principles Il. Chart of Accounts IL. Application of Accounting Concepts IV. Allocation Methods V._ Inter-segmental Transactions and Transfer Pricing Policies VI. Financial Reports & Appendices 3. ADMINISTRATION OF THE MANUAL ‘The General Manager will be responsible for the administration of the manual and will ensure that (1) policies and implementing guidelines listed in this manual are implemented and followed by appropriate officials and personnel; (2) adequate copies are psinted and distributed to enable users to know the dems of the accounting and financial reporting systems and (3) any revision and amendment to this manual shall be Properly authorized, documented and included in all copies of this manual ACAM for ECs Page 34. PROCEDURES ON AMENDMENTS OF THE MANUAL All revisions to any part of this manual will be submitted to the General Manager for evaluation and endorsement to the Board of Directors for approval. Upon approval, he/she will prepare a corresponding memorandum effecting the proposed change and will sce to it that all holders of the manual are furnished with copies of the amendment/s. 8. EFFECTIVITY This Accounting and Cost Allocation Manual will take effect upon approval by the Energy Regulatory Commission. 6. IMPLEMENTATION AND COMPLIANCE The following are guidelines to be observed in the implementation and monitoring of Policies and compliance with procedures as prescribed in the manual: 1 All personnel of the Accounting Department/Division and of other Sections/oflices involved in accounting functions will adhere swietly to the policies and procedures. 2 Department heads and supervisors will impart to the staff knowledge of this, ‘manual and periodically test compliance thereto. 3. Employee performance in accordance with presctibed systems, policies and Procedures will be considered in the periodic merit rating and salary increases of personnel concerned. 4 Random testing for compliance to said policies and procedures shall be included in the scope of annual operations financial audit or consultancies. ACAM for ECs Page 4ACCOUNTING AND COST ALLOCATION MANUAL DEFINITION OF TERMS nn ACAM for ECs Page 5 «‘This Manual has adopted the definitions and description of the Generation and Distribution Activities inchucling the relevant business segments for the Electric Cooperatives based on Article IV of the BSUP (as Amended): 1. Generation Activity ‘The Generation Business Segments are described below. 11 Generation of Electricity and Provision of Ancillary Services Business Segment This segment comprises the generation of electricity (je. the production of electricity, including the use ofa co- generation facility and embedded generators) and the provision of Ancillary Services (using generation assets). ‘The assets included in the Business Segment are all Facilities and assets “including support Plant) used for the generation of electricity or the provision of Ancillary Services ‘The liabilities included in this Business Segment are all the liabilities incurred directly, or a relevant share of the shared liabilities that ate incurred to provide the services or undertake the operational activities Revenues include all revenues derived from the sale of electricity or the provision of Ancillary Services, as well as revenues derived from the sale of related facilites, plants or assets. Costs include all operating and maintenance costs of assets associated with the generation of Clectricty or the provision of Ancillary Services and the corresponding depreciation of the assets, 1.2. Supply Services ‘This segment comprises the sale of electricity by a generating EC, licensed as RES, to end- users in the contestable market, It includes the: ACAM for ECs Page 612.1 Billing, collection and the provision of customer services to such end-users in their capacity as electricity consumers or to such other customer in their capacity as purchasers of electricity 12.2. Energy wading (including the purchase of electricity and hedging activities) undertaken in connection with the sale of electricity to end-users who are included in the contestable market or to other customers who are not end-users; and 1.2.3 Sale of electricity to end-users who are included in the contestable market or to other customers who are not end-users. Supply services, may also comprise the provision, installation, commissioning, ‘esting, repair, maintenance and reading of meters that are used to measure the delivery of electricity to end users who are included in the contestable macket or to other customers who ate not end-users (whether such services are provided to those end —ausers oF to other customer or to any other person.) ‘The assets included in this Business Segment are all the assets used disectly, or a relevant share of the shared assets which are used to provide the supply services, ‘The liabilities included in this Business Segment are all the liabilities incurred directly oF a relevant share of the shared liabilities which are incurred to provide the services or undertake the operational activities for supply services Revenues include all revenues associated with providing the servie+s or undertaking the operational activities for supply services Costs include all costs associated with the provision of the supply services including ‘he relevant share of the operating and maintenance costs and the cepreciation costs OF the assets used to provide the services or undertake the operation il activities, 2. Distribution Activity ‘This manual adopts the seven (7) distribution business segments. These segments are Further classified into regulated and non-regulated Business Segments. Below is the description of each business segments: ACAM for ECs Page 7Regulated Business Segments: 2.1 Distribution Services ‘This segment has the following distribution services System and the 24.41 Conveyance of electricity through a Distribution control and monitoring of electricity as it is conveyed through the Distribution System (including any services that suppor such conveyance, control or monitoring or the safe operation of the Distribution System) 2.1.2 Provision of Ancillary Secvices (if any) that are provided using assets Which form part a Distribution System (an example of such Ancillary Services is services provided by a series reactor or a static var compensator); 2.13 Planning, maintenance, augmentation and operation of the Distribution System. 2.14 Provision, installation , commissioning ,testing , repair , maintenance and reading of WESM- related meters that are not used to measure the delivery of electricity to end-users or other customers; and 2.15 Billing , collection and the provision of customer services that are y-laws. 6.2.2.3 COMMUNITY DEVELOPMENT FUND* ‘This account refers to the fund set aside from the net surplus which should not be less than 3% for projects and/or activities that will benefit the community where the cooperative operates. 6.2.2.4 OPTIONAL FUND* ‘This account refers to fund set aside from the net surplus not exceeding 7%. It shall be used for any of the following purposes: land and building, acquisition of equipment, members’ benefit, or other purposes. 6.2.3 UNAPPROPRIATED MARGINS This account represents the margins or accumulated earnings that are not appropriated as reserves to specific projects. 6.2.4 UNDIVIDED NET SURPLUS* ‘This account cefers to the accumulated net surplus of the cooperative that is allocated and distributed at the end of cach reporting period in accordance with Article 86 of RA 9520. This account is used for Interim Financial Statement Presentation only. ‘ACAM for ECs Page 776.2.5 NET LOSS* ‘This account refers to temporary account to record losses in operations incurred during the reporting period. Net loss for the year shall be charged against reserve fund, subject to provisions of Article 86 of RA 9520, cre eee meer apne ACAM for ECs Page 78 v7 ACCOUNT DESCRIPTION ~ REVENUES 741 DISTRIBUTION AND RELATED ACTIVITIES ‘These accounts represent the amounts derived by the ECs for the ERC-approved unbundled charges being billed by its consumers. TAL TAZ 7A PASS-ON GENERATION CHARGES ‘This account represents the amounts derived from pass-on generation charges billed by the EC to its consumers. The pass-on generation charges are computed based on ERC guidelines. PASS-ON TRANSMISSION CHARGES This account represents the amounts derived from pass-on ‘transmission charges billed by the EC to its consumers. ‘The pass-on transmission charges are computed based on ERC guidelines. PASS-ON SYSTEM LOSS CHARGES ‘This account represents the amounts derived froma pass-on system loss charges billed by the EC to its consumers. The pass-on system loss charges are computed based on ERC guidelines. ener eennsaenennteeennteeene sentient ACAM for ECs Page 797.1.4 DISTRIBUTION CHARGES REVENUE ‘This account represents the revenues derived from distribution charges and the RFSC billed by the EC to its consumers. The distribution charges are based on the RSEC-WR approved by the ERC. ‘The RESC component of the rate shall be recognized as revenue under this account and shall be recorded in an auxiliary account under the subsidiary for each type of consumer. 7.1.5 SUPPLY CHARGES REVENUE This account represents the revenues derived from supply charges billed by the EC to its consumers. The supply charges are based on the RSEC-WR approved by the ERC. 7.1.6 METERING CHARGES REVENUE, ‘This account represents the amounts derived from metering charges billed by the EC to its consumers. ‘The metering charges are based on the RSEC-WR approved by the ERC 74.7 OTHER UNBUNDLED CHARGES REVENUE, ‘This account represents the amounts derived from other unbundled charges billed by the EC to its consumers, The other unbundled charges include the lifeline rate, the Sr. Citizen’s subsidy charge, the inter-class eross subsidy charges, and others. ‘seamen mt ACAM for ECs Page 80 x1.8 TRUE-UP CHARGES/REFUND This account represents the rate adjustments due to the true-up mechanism approved by ERC, and other amounts to be refunded to the EC consumers based on ERC decisions, such as the PPA refund, 7.2 GENERATION REVENUE, 7.2.1 GENERATION OF ELECTRICITY AND PROVISION OF ANCILLARY ‘This account represents revenues derived from the sale of electricity of the provision of the ancillary seevices using genecation assets 7.2.2 SUPPLY ‘This account represents the sale of electricity by the EC, licensed as RES, to end users in the contestable market. 7.2.3. OTHER GENERATION RELATED REVENUES ‘This account represents other revenues derived from the sale of related facilities, plant or assets. eee pent ACAM for ECs Page 8173 OTHER OPERATING REVENUES This account represents revenues of the EC that cannot he classified to any revenue accounts such as forfeited discounts, rent from electric property, service fees, interest on delinquent accounts, gain on energy trading, adjustments, and others, 74 NON-OPERATING REVENUES This account represents revenues which are non-utility in character such as miscellaneous services and charges billed to consumers, provision of services , other revenues. to other entities, rental of general plant property, interes which are not specifically provided for in accounts described above. 7.5 DONATION AND GRANT SUBSIDY" ‘This account refers to an amount deducted from Donation and Grant to subsidize depreciation changes on property and equipment funded by donation and grant * Accounts marked with an asterisk () ate applicable to CDA-cegisteced ECs, These ac lifted from the Standard Chart of Accounss SCA) issued by the CDA, cetera tenet ACAM for Page 828. ACCOUNT DESCRIPTION - COSTS AND EXPENSES <—eeneieniainnenneenen 81 OPERATIONS AND MAINTENANCE EXPENSE ACCOUNTS 8.1.1 PURCHASED POWER ‘This represents the cost incurred by the EC for the purchase of power from generation companies, WESM, and the transmission costs associated with the purchase of power. ‘The costs associated with these accounts shall be recorded as Regulated and Non Regulated Retail Service, Wholesale Aggregation and Last Resort Supply segments. 8.1.11 | PURCHASED POWER REDUCTION It is @ contra account to the Purchased Power account which fepresents the potion of the power purchased through a bilateral contract with a generator that was sold to WESM. 8.1.2 DISTRIBUTION EXPENSES This represents the expenses incurred in the general supervision and direction of the operation and maintenance of the distribution system. ‘Maintenance expenses are ordinary expenses incurred to repair and maintain distribution properties but will not extend the life of such properties. Serene nenemenenneieenneee tert ‘ACAM for ECs Page 83 x8.1.2.1 OPERATION - SUPERVISION AND ENGINEERING Direct supervision of specific activities, such as station operation, line operation, meter department operation, etc. shall be charged to the appropriate account. 812.2 OPERATION - LOAD DISPATCHING This account represents the expenses incurred in load dispatching operations pertaining to the distribution of electricity. 8.1.2.3 OPERATION - STATION EXPENSES This account represents the expenses incurred in the operation of distribution substations. 81.24 OPERATION - OVERHEAD LINE EXPENSES ‘This account represents the expenses incurred in the operation of distribution lines. 8.1.2.5 OPERATION - STREET LIGHTING AND SIGNAL SYSTEM EXPENSES This account represents expenses incurred in the operation of street lighting and signal systems plant which is owned cr leased by the EC and those owned by customers where such work is done regularly as a part of the street lighting and signal system service. erent eet ‘ACAM for ECs Page 848.1.2.6 OPERATION -RENTS ‘This account represents rent expenses on property of others used, ‘occupied or operated in connection with the distribution system, joint use of poles and payments to the government and others for the use and occupaney of public lands and reservations for distribution line rights of way. 81.2.7 OPERATION - MISCELLANEOUS EXPENSES This account represents other expenses incurred in distribution system operation not classifiable in the specific accounts deseribed above. 8.1.2.8 MAINTENANCE - SUPERVISION AND ENGINEERING This account represents expenses incurred in the general supervision and direction of maintenance of the distribution system. 812.9 | MAINTENANCE- STRUCTURES ‘This account represents expenses incurred in the maintenance of structures, the book cost of which is includible in the sub-account Structures and Improvements. 81.2.10 | MAINTENANCE - STATION EQUIPMENT ‘This account represents expense incurred in maintenance of plant, the book cost of which is includible in the sub-accounts Stations Equipment and Storage Battery Equipment. 812.11 | MAINTENANCE - OVERHEAD LINES ‘This account represents expenses incurred in the maintenance of line distribution facilities. The book cost of which is includible in the sub- emt erent seen ‘ACAM for ECs Page 85accounts Poles, Towers and Fixtures, Overhead Conductors and Devises and Services. 8.12.12 | MAINTENANCE - LINE TRANSFORMERS This account represents expenses incurred in maintenance of distribution line transformers, the book cost of which is incredible in the sub-account Line Transformers. 81.213 MAINTENANCE -STREET LIGHTING AND SIGNAL SYSTEMS ‘This account represents cost of labor, materials used and expenses incurred in maintenance of plant, the book cost of which is incredible in the account Street Lighting and Signal Systems. 8.12.14 MAINTENANCE - MISCELLANEOUS PLANT This account represents expenses incurred in the maintenance of miscellaneous plant, the book cost of which is includible in the accounts Installations in Customer's Premises and Leased Property on Customer's Premises. 8.1.3 SUPPLY EXPENSES 8.13.1 SUPERVISION AND MAINTENANCE This account represents expenses incurred in the general direction, supervision, and maintenance of consumer accounting and collection activities. ‘ACAM for ECs Page 86‘ACAM for ECs 8.13.2 CONSUMERS’ DISCOUNTS ‘This account represents the discounts given to consumers for paying the bills promptly as provided for by the EC inching other discounts such as power factor discounts and efficiency related discounts as duly approved. 81.3.3 CONSUMER RECORDS AND COLLECTION EXPENSES “This account represents expenses incurred in the course of working con consumer's applications, contracts, onders, credit investigations, billing and accounting, collections and complaints. 8.13.4 UNCOLLECTIBLE ACCOUNTS ‘This account represents provision for losses atising ‘rom delinquency of receivables. 8.1.35 INFORMATIONAL AND INSTRUCTIONAL, ADVERTISING EXPENSES This account represents expenses incurred in activities that primarily convey information as to what the utility urges or supgests consumers should do in utilizing electric service. 8.1.3.6 CONSUMER/COMMUNITY SERVIC! EXPENSES This account represents other expenses incurred in providing services to consumers and communities, 8.13.7 HOUSEWIRING SERVICES This account represents the expenses associated with providing assistance to consumers for house wiring services. These expenses Page 87take the form of house witing loans, which are tepaid by the customers on instalment basis with each monthly electricity bill. 8.1.3.8 | WESM-RELATED COSTS AND EXPENSES ‘This account represents expenses incurred in participating in the Wholesale Electricity Spot Market for the procurement of the ECs electricity cequicements. 8.1.3.9 | MISCELLANEOUS CONSUMERS ACCOUNTS EXPENSES ‘This account represents the expenses incurred in connection with consumer service and informational activities, which are not includible in other consumer information expense accounts described herein. 81.4 METERING EXPENSES ‘This account represents all the expenses associated with the Metering segment, 8.14.1 OPERATION - SUPERVISION AND ENGINEERING ‘This account represents expenses incurred in general supervision and direction of operation of metering systems, Direct field supervision of specific jobs should be charged to the appropriate accounts, 8142 METER EXPENSES ‘This account represents the expense incurred in the operation of consumer meters and associated equipment. enema teen ‘ACAM for ECs. Page 888.14.3 | METER READING EXPENSES This account represents expenses incurred in reading consumer meters and determining consumption when performed by employees engaged in reading meters. 81.4.4 SERVICE INSTALLATION EXPENSES This account represents expenses incurred in installing consumer meters. 8.1.45 | METER SHOP - PERMIT & LICENSE FEES ‘This account represents expenses intended for the Permit & Licensing Fee for the Meter Shop. 8.14.6 RENTS ‘This account represents rent expenses on property such as rentals of building used as Meter Shop. 814.7 | MISCELLANEOUS EXPENSES This account represents the expenses incurred in connection with operation of the metering business activity, which are not includible in other metering expenses described above. 8.14.8 MAINTENANCE — METERS This account represents expenses incurred in the maintenance of meters and meter testing equipment, the book cost of which is includible in the sub-accounts Meters under the classification Metering Plant. ‘ACAM for ECs Page 898.14.9 LABORATORY FEES & CHARGES, ‘This account represents the cost incurred for laboratory testing and field testing, 82 POWER GENERATION EXPENSES This account represents the balances resulting from operation and maintenance of generating operations of the EC. 824 OPERATION This account represents expenses incurred in the general conduct of the operation of the generation business as a whole. ‘ACAM for ECs 82.1.1 SUPERVISION AND ENGINEERING This account represents expenses incurred in the general supervision and direction and the operations of the generating plant. Direct supervision of specific activities, such as fuel hancling, engine and generator operation, etc. shall be charged to their appropriate accounts. 824.2 FUEL This account represents all cost of fuel such as gas, oil, kerosene and gasoline used for power generation including incidental expenses up to the point where fuel enters the first production phase. 8.2.13 RENTS ‘This account represents rental expenses of properties that are used, occupied, or operated in connection with power production. Page 908.2.14 | MISCELLANEOUS GENERATION EXPENSES This represents expenses incurred in the plant operation, which are not specifically provided for or not readily assignable to other generation expense accounts. 82.2 MAINTENANCE This account represents expenses incurred in the general conduct of the maintenance of the generation business as a whole. 8.2.2.1 MAINTENANCE - SUPERVISION & ENGINEERING This account represents expenses incurred in the general supervision and direction of the operations of the generating plant. 8.2.2.2. MAINTENANCE - STRUCTURES This account represents expenses incurred in maintenance of structures used in power production, the book cost of which is included in the sub-accounts, Structure and Improvements, and Puel, Holders, Producers and Accessories under the plant account classification, Production Plant. 8.2.2.3 MAINTENANCE - GENERATING AND ELECTRIC EQUIPMENT This account represents expenses incurred in maintenance of production and plant equipment, the book cost of which is included in the accounts, Prime Movers, Generators, Accessory Electric Equipment, eee ‘ACAM for ECs Page 918.2.3 8.2.2.4 MAINTENANCE - SURGE TANKS, HEADRACE, PENSTOCK, ACCESS ROAD AND DAM MAINTENANCE, This account represents the expenses incurred in the maintenance of the surge tanks, headrace, penstock, access road and dam, 82.2.5 MAINTENANCE - OTHER MISCELLANEOUS PLANT. ‘This account represents expenses incurred in the maintenance of the power production plant, the book cost of which is included in the account, Miscellaneous Power Plant Equipment. ENVIRONMENT MANAGEMENT ‘This account refers to all the environmental management activities that the EC needs to accomplish in order to comply with environmental and safety regulations associated with the operation of a power plant, 82.3.1 SUPERVISION AND MAINTENANCE, This account represents expenses incurred in the general supervision and direction and the maintenance of environmental concerns related to the generating plant. Direct supervision of specific activities, such as dam and watershed maintenance, environmental monitoring etc. shall be charged to their appropriate accounts. 82.3.2 PLANTING MATERIALS AND LABOR This account encompasses all the expenses associated with tree planting activities aimed at watershed management in accordance with the operation of the mini-hydro power plant. ‘ACAM for ECs Page 92 t‘ACAM for ECs 8.2.3.3 ADVOCACY AND COMMUNITY RELATIONS This account refers to expenses incurred relative to the regulatory mandates to pursue environmental advocacy and community relations activities in line with the conduct of power generation activities. 8.23.4 MONITORING This account encompasses expenses associated with environmental testing and monitoring, which is part of the regulatory burden assumed by the EC along with its generation operation. 8.2.3.8 | SYSTEM CONTROL AND LOAD DISPATCHING This account represents expenses incurred in load dispatching activities for system control ECs having interconnected electric system and operating under a central authority, which controls the production and dispatching of electricity may apportion this account into Load Dispatching - Distribution. Page 9383 ADMINISTRATIVE AND GENERAL EXPENSES 83.1 ADMINISTRATIVE AND GENERAL SALARIES This account represents the compensation of officers, executives and other employees of the utility properly chargeable to utility operations and not directly to any particular operating function. 83.2 OFFICE SUPPLIES AND EXPENSES This account represents office supplies and expenses incurred in connection with the general administration of utility's operations that are assignable to specific administrative ot general departments and are not specifically provided for in other accounts described herein, 83.3 OUTSIDE SERVICES EMPLOYED ‘This account represents fees and expenses of professional consultants and others for general services that are not applicable to a particular operating function or to other accounts. It also represents the pay and expenses of persons engaged for a special or temporary administrative or general purpose in circumstances where the person so engaged is not considered as an employee 83.4 PROPERTY INSURANCE, ‘This account represents cost of insurance, labor and relared supplies and expenses incurred for the protection against losses and damages to owned or leased property used in the operations. renee enmnegenemes seen ACAM for ECs. Page 94 X8.3.5 INJURIES AND DAMAGES This account represents cost of insurance or reserve accruals against injuries and damages chims of employees or others; losses of such character not covered by insurance and expenses incurred in settlement of injuries and damages claims; and, expenses incurred in injuries and damages activities. 8.3.6 EMPLOYEES’ PENSION AND BENEFITS ‘This represents pensions paid to or on behalf of retired employees, or accruals to provide for pension, payments for employee accident, sickness, hospital and death benefits or insurance therefore, and such other benefits that are approved by the governing body of the EC, 83.7 REGULATORY FEES AND EXPENSES ‘This account represents expenses in connection with franchise, ordinance or similar requirements. This account also includes expenses incurred in connection with formal cases before regulatory commissions or other regulatory bodies or cases in which such body is 2 party, including payments made to 2 regulatory commission for fees assessed against the EC. 8.3.8 SCHOLARSHIP PROGRAM EXPENSES ‘This account represents the expenses associated with the implementation of scholarship program for qual ied children of cooperative member- consumers duly approved by the goveming body of the EC. ee ACAM for ECs Page 958.3.9 RENTS ‘This account represents expenses for the use of property of other parties, occupied or operated in connection with the general and administrative functions of the EC. 8.3.10 MAINTENANCE OF OFFICE AND GENERAL PLANT This account represents expenses allocable oF assignable so administrative and general functions incurred in the maintenance of property being used in the utility operation. 8.3.11 TAXES AND LICENSES This account represents the amount due from the EC for the payment of licenses and other taxes due to the national and local governments. 8.3.12. REAL PROPERTY TAXES ‘This account represents amount of tax due on property owned oF leased by the EC, 8.3.13 FRANCHISE TAXES ‘This account represents amount of franchise tax due to the local government where the EC franchise area is located. ‘ACAM for ECs Page 968.3.14 BUSINESS AND LOCAL TAXES This account represents the amount of business and local taxes due to the local government where the EC franchise area is located. 8.3.18 OTHER TAXES ‘This account represents the total amount of other taxes that need to be paid by the REC that cannot be classified under the above accounts. 8.3.16 OFFICERS ALLOWANCES AND BENEFITS ‘This account represents allowances and benefits given to the members of the Board of Directors, General Manager, management assistants and other officers of the EC, such as Board meeting per diems and allowances, representation, and other expenses incurred by said officers 83.17 TRAVEL “This account represents expenses incurred by EC officers and employees while on official trave 83.18 TRAINING This account represents all expenses incurred in connection with training, seminars and other continuing education program for che officers and employees to enhance their knowledge and improve performance in the conduct of their duties and responsibilities. rem nee ‘ACAM for ECs Page 978.3.19 ASSOCIATION AND MEMBERSHIP DUES This account represents the periodic dues from the EC to national, regional cor local associations or federations wherein the EC is a member. 8.3.20 MISCELLANEOUS GENERAL EXPENSES ‘This account represents expenses incurred in connection with the general management of the utility not provided for in the accounts described elsewhere, 8.3.21 GENERAL ASSEMBLY MEETING EXPENSES* This account refers to expenses incurred in the conduct of regular/special general assembly. 8.3.22. MEMBERS’ BENEFIT EXPENSES* This account refers to expenses incurred in providing for additional members’ benefit and social services. 8.3.23 AFFILIATION FEE* This account refers to amount incurred to cover membership of registration fees and annual dues to a federation or union. ence tn mei ACAM for ECs. Page 988.3.24 SOCIAL & COMMUNITY SERVICE EXPENSES* This account refers to expenses incurred by the cooperatives in its social community involvement including solicitations and donations to charitable institutions. 8.3.25 PROVISION FOR CGF* ‘This account refe ro amount set up at the option of the cooperative for the provision of CGF (Coop Guarantee Fund). This is not part of the Statutory Fund, 84 DEPRECIATION AND AMORTIZATION ‘This account represents the portion of an asset that is used up in an accounting period, such as a year, quarter or month. It is the amount provided for the wear and tear of the asset that is charged to current operations. For assets that are expected to last for more than a year, the cost of the asset is spread over the estimated life of such asset using a depreciation schedule. The amount provided for intangible asset is referred to as amortization while the amount provided for tangible property is termed as depreciation. 84.1 DEPRECIATION EXPENSES - UTILITY PLANT AND EQUIPMENT ‘This account represents the portion of the Electric Plant in Service asset that is used up within the year. peer ee i SR ‘ACAM for ECs. Page 9984.2 DEPRECIATION EXPENSES - ELECTRIC PLANT HELD FOR FUTURE USE This account represents the portion of the Electric Plant Held for Future Use asset that is used up within the year. 84.3 DEPRECIATION EXPENSES - UTILITY PLANT & EQUIPMENT APPRAISAL INCREASE, This account represents the corresponding depreciation charge for the asset account Utility Plant & Equipment - Appraisal Increase. 8.4.4 DEPRECIATION EXPENSES - GENERATION PLANT This account represents the portion of the Generation Plant asset that is used up within the year. 84.5 DEPRECIATION ~ GENERATION PLANT - APPRAISAL INCREASE ‘This account represents the corresponding depreciation charge for the asset account Generation Plant ~ Appraisal Increase. 84.6 AMORTIZATION EXPENSE ~ BIOLOGICAL ASSET ‘This account represents the amount provided for the wear and tear corresponding to the asset account Biological Asset: ‘ACAM for ECs. Page 1008.4.7 AMORTIZATION EXPENSE - INTANGIBLE ASSET ‘This account represents the corresponding amount provitled for the asset account Intangible Asset charged against current operations, 85 INTEREST CHARGES 85.1 INTEREST ON SHORT TERM AND LONG-TERM DEBTS ‘This account represents the total interest charges arising from all the loans availed by the EC from NEA, REFC, Banks and other financial institutions. 85.2 OTHER INTEREST CHARGES ‘This account represents interest incurred on other forms of indebtedness not properly classifiable in the specific accounts described above, 86 OTHER EXPENSES This account includes expenses not otherwise included in the above expense accounts such as loss on energy trading, etc. 8.7 | NON-OPERATING EXPENSES ‘This account represents the total balances of the accounts, Expenses on Electric Plant Leased to Others, Cost and Expenses for Merchandising, Jobbing and Contract Work, Expenses - Non-utility Operations, Loss on Disp sal of Property, Non-operating Taxes, and Provision for Income Taxes, etc. ‘ACAM for ECs Page 1018.7.1 EXPENSES ON ELECTRIC PLANT LEASED TO OTHERS ‘This account represents expenses incurred related to the electric plant properties leased to others. &7.2 COSTS AND EXPENSES OF MERCHANDISING, JOBBING AND CONTRACT WORK ‘This account represents all expenses related to sale of merchandise, jobbing and contract work performed by the EC for others for a stipulated contract price or commission, 8.7.3 EXPENSES - NON-UTILITY OPERATIONS This account represents all expenses incurred in the pursuit of revenues from non-utility operations. A. subsidiary record shall be maintained to permit ready summarization, to be broken down into operation, maintenance, rent, depreciation, amortization and taxes. 88 LOSS ON DISPOSAL OF PROPERTY. These accounts represent the one-time charges for losses related to the disposal of property. 8.9 IMPAIRMENT LOSS ‘These accounts represent the one-time charges for losses related to the impairment testing of assets. neem eit "ACAM for Ecs Page 102 V8.10 NON-OPERATING TAXES ‘This account represents taxes due on non-opetating properties and revenues of the utility. &11 PROVISION FOR INCOME TAX. ‘This is a provision account containing the estimated income tax for a specific period applicable to business not exempted from income tax. 8.11.1 PROVISION FOR INCOME TAX - CURRENT ‘This is a provision account for Income Tax payable for the current year 8.11.2 PROVISION FOR INCOME TAX- DEFERRED This is a provision account for deferred Income Tax payable for the current year. men te mete ‘ACAM for ECs Page 103ACAM for ECs ACCOUNTING AND COST ALLOCATION MANUAL CHAPTER III APPLICATION OF ACCOUNTING CONCEPTS1, PROPERTY, PLANT AND EQUIPMENT, The underlying concepts for this Chapter 111 Section 1 are based on IAS/SFAS No. 16, BIR pronouncements, provisions of EPIRA and its IRR and the related pronouncements issued by NEA and CDA which establishes standards for the measurement, presentation and disclosure of property and plant equipment by Electric Cooperatives (ECs). 1.1 Overview Property, Plant and Equipment is described as tangible items that are held for use in the production or supply of goods or services, for rental to others ot for administrative purposes and are expected to be used during more than one period. However, these assets, except for land, are of use to the ECs for only a limited number of years and the cost of each asset is allocated as an expense on the years in which it is used through the recognition of periodic depreciation. This type of expense is an allocation of an asset to the periods for which services are received from the use of such asset. ‘The following sections present the control objective, policy statements as to acquisition, recording and reporting, depreciation, protection and file maintenance of the EC’s property, plant and equipment. 1.2 Control Objectives 1, To ensure that all property, plant and equipment are adequately safeguarded from loss, wastage or theft, or even misuses 2 To ensure the adequacy of supporting documentation /records; and 3. To establish proper and effective accountability. etre an ACAM for ECs Page 105 x1.3 Policy Statements 1, Authorization and Responsibility 1. Acquisition for property, plant and equipment must be properly supported by appropriate request and justification to be approved by the General Manager or the Board of Directors in accordance with approved level of authority. 2 Acquisition and the subsequent purchase shall be subject to the procurement procedures established by the EC. Processing of payment for purchases shall be executed by the Accounting and Cashiering while the actual purchase shall be carried out by the Procurement Office. 1. Maintenance of the EC's properties shall be the responsibility of the department utilizing such properties. 2, Mode of Acquisition The following describe the different manners on how the EC may acquire property and equipment: 1. Acquisition by Purchase 1. Assets acquired on by purchase may be in cash or installment. ‘These assets shall be recorded at the amount paid including freight, installation and other costs to make the asset operational SUFI IUNTS nnn ACAM for ECs Page 106 X2 ‘Assets acquired at a lump sum price shall be prorated in order to compute the related depreciation charges. When prorating is impossible, the asset may be depreciated using the most practicable estimated useful life of the asset as a group. 1. Where assets are acquired on account with a discount offered, these shall be recorded at cost less the discount. 2. Assets acquired on installment basis shall be recorded at the original cash price offered. The difference between the total installment price over the cash price shall be recorded as an interest or financing cost to be amortized over the installment period. When the cash price is not available for assets acquired on installment basis, it shall be recorded based on the present value of all payments using an implied interest rate, 2, Acquisition through Finance Lease TAS/PAS 17 on Leases prescribes the appropriate accounting policies and disclosures to apply in relation to finance and operating leases. Said IAS/PAS 17 is hereby adopted by the EC in regard to this section. 1, All eases are classified as operating leases, except for the leases described under this Section that are considered finance leases. 1. A lease is classified as finance lease once there is the substantial transfer of all isks and rewards incidental to ownership of an asset. Title may or may not eventually be transferred. ACAM for ECs Page 1072 Classification of whether a transaction is considered finance or operating lease shall be made at the inception of the lease. 3. Situations that would normally lead to a lease being classified as finance lease shall include the following: The lease transfers ownership of the asset to the lessee by the end of the lease term; 1. The lessee has the option to purchase the asset at a ptice that is expected to be sufficiently lower than the fair value at the date the option becomes exercisable for it to be reasonably certain, at the inception of the lease, that the option will be exercised; 2. ‘The lease term is for the major part of the economic life of the asset, even if title is not transferred; 3. At inception of the lease (the earlier of the date of the lease agreement and date of commitment hy both parties to the principal provision of the lease), the present value of the minimum lease payments amounts at least substantially all of the fair value of the leased assets anc 4. The lease assets are of such specialized nature such that only the lessee can use them without ‘major modifications being made 4, Other situations that might also lead to classification as a finance lease are: te ACAM for ECs Page 1081. If the lessee is entitled to cancel the lease, the losses associated with the cancellation are bone by the lessees 2. Gain or losses from fluctuation in the fair value of the residual fall to the lessee (for example, by means of a rebate of lease payments almost equal to the sales proceeds at end of the lease); 3. The lessee has the ability to continue to lease for a secondary period at a rent that is substantially lower that the market rent. 5. The Commencement of the Lease ‘Term is the date from which the lessee is entitled to exercise its right to use the leased asset. In the case of the EC's Lease Purchase Agreement (LPA) with TRANSCO, it is the date after all the requirements have been complied with and the EC has received from TRANSCO the advice to take over the asset/operation 6. At the commencement of the lease term, the EC shall recognize the assets and liabilities in the statements of financial position the amounts equal to the fair value of the leased property or, if lower, the present value of the minimum lease payments, each determined at the inception of the lease. 7. Any initial direct costs of the lessee are added to the amount recognized as asset. 8 Lease payments shall be apportioned between the finance charge and the reduction of the outstanding ee ACAM for ECs Page 109liability. Finance charge shall be recorded as expense and the principal portion shall be deducted from the ability 9. The depreciation policy for depreciable leased assets shall be consistent with that for depreciable assets that are owned, and the depreciation recognized shall be calculated in accordance to PAS 16 (Property Plant and Equipment). 10. ‘The EC shall provide the necessary disclosures pertinent, to the lease in accordance to PAS 17 Leases. 3. ion by Trade-In 1. Trade-in is another means of acquisition of a property where it is exchanged with another property based on terms agreeable to both patties involved in the exchange. 2. The asset so acquired shall be recorded based on the following order of priority: 1. Fair value of asset traded plus cash payment 2. Trade in value of asset given plus any additional cash payment 4. Acquisition through Donation 1, Assets acquired through donations from the government in the form of grants, subsidies or assistance shall be governed by the provisions of LAS 20, Government Grants 7 disclosure of Government Assistance and other relevant pronouncements made by NEA. AT "AM for ECs Page 1102. Donation from the private sector shall be recognized at fair value of the items received, with the credit going to members’ equity. All subsequent expenses incurred related to the donated asset, ie. registration fees, real estate taxes in arrears on the property, and transfer taxes shall form part of the donated asset and shall likewise be recognized under its corresponding credit in the members equity account. 5. Self-Construction 1. Self-constructed asset/s is determined using the same principles as for fan acquired asset. The cost of self-constructed property and equipment shall include: 1. Direct cost material 2 Direct cost of labor 3. Indirect cost and incremental overhead specifically identifiable or traceable to the construction. (For overhead that cannot be specifically identified, allocation of overhead shall be done on the basis of direct labor cost or direct labor hours.) 1.4 Recording and Reporting 1. Recording of property and equipment acquisition shall be done as assets are acquited and the related depreciation shall be taken up on a monthly basis. 2, PAS 16.7 « The cast of an item of wility plant, property ana equipment shall be recugnized as an asset if, ACAM for ECs Page 1111. it is probable that future economic benefits associated with the item will flow tothe entity: and 2. the cost ofthe iter can be measured relly 1.5 Valuation ‘The cost of the asset shall comprise the following: 1. Purchase price 2. Other incidental expenses to make it ready for use such as freight, non-refundable purchase taxes after deducting tracle discounts and rebates 3. Other cost directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the intended use of management 4. Cost of dismantling and removing the items and resioring the site on which it was located, where applicable 5. The cost of self-constructed assets shall include the direct costs of materials and labor as well as indirect costs and inctemental overhead specifically identifiable to the construction. Major repairs related to construction shall be accumulated and controlled by job orders to ensure correct account classification, facilitate control over expenditures and make possible subsequent comparison with original authority 6. The following criteria shall be satisfied in the capitalization of a unit of an asset 1. The asset is acquired for use in operations snd not intended for sale. ACAM for ECs Page 1122. The useful life of the unit must be longer than one year from the date of acquisition 3. The value of the unit of property must be considered material based on the EC policy on materiality 7. Expenditures incurred to improve fixed assets previously capitalized, should be capitalized if all the following criteria relating to the expenditure are met as stated under Section 3.5 of the BSG, as amended: 1. relate to the purchase development or construction of a new asset; or 2 inerease the capacity or functionality or quality of output of an existing assets or 3. significantly reduce the ongoing maintenance of an exiting aset: or 4. extend the service life of an existing asset beyond what was expected when the asset was originally installed, 1.6 Revaluation We have considered in this Manual, the ERC Resolution No.26 Series of 2009, A Resolution Amending the Rules for Approval of Regulated Entities’ Capital Expenditure Projects in qualifying expenditures as capital assets. It defined the capital projects as projects that are needed to serve the forecasted future loads and to maintain good electric cervice to service the existing and furure customers satisfying the utilty’s technical criveria for capacity, reliability, quality and safety. IAS 16.31 discusses the revaluation of property and equipment, such revalued amount being the fair value at the date of revaluation less the subsequent depreciation and subsequent accumulated impairment loss. Fair value must be measured reliably ACAM for ECs Page 113 X‘The following shall be observed by the EC as regard to revaluation of assets: 6. After the recognition of the asset, an item of property plant and equipment whose fair value can be measured reliably shall be carried at a re-valued amount, being its fair value at the date of the revaluation less any subsequent accumulated depreciation and subsequent accumulated impaitment losses. Revaluation shall be made with sufficient regularity to ensure that the carrying amount does not differ materially from that which would be determined using fair value at the end of the reporting period. ‘The determination of the market value shall be handled by professionally qualified appraisers and are duly accredited by the regulators. ‘The frequency of revaluation depends upon the changes in fair value of the items of the property, plant and equipment. It is usually done once every three ot five years (3-5 yrs.) If an item of the property, plant and equipment is re-valued, the entire class of property, plant and equipment to which that asset belongs shall be re-valued. ‘The entire class shall mean those assets of similar nature such as, land, machinery, ete If-an asset's carrying amount is increased as a result of a revaluation, the increase shall be recognized as other income and accumulated in the Member’s Equity portion under the Revaluation Surplus account. The increase shall be recognized in profit and loss to the extent that it reverses a revaluation decrease of the same asset previously recognized in profit or loss. If an asset's carrying amount is decreased as a result of a revaluation, the decrease shall be recognized in profit or loss. However, the decrease shall be recognized ‘ACAM for ECs Page 114as other income (term used is comprehensive income) to the extent of any credit balance existing in the revaluation surplus in respect of that asset, ‘The decrease recognized in other income reduces the amount accurnulated in equity under the heading of revaluation surplus. 8. When the re-valued asset is disposed of, any revaluation surplus may be transferred directly to retained earnings, or it may be left in equity under the account Revaluation Surplus. The transfer from revaluation surplus to retained cearnings shall not be made through profit or loss. 1.7 Depreciation 1. Fixed assets shall be depreciated over their estimated useful lives as follows: Uslity Plant 1 10 30 years Generation plant 25 to 30 years 2. Depreciation shall be computed using the straight-line method. Recording of depreciation expense forall fixed assets shall be made monthly. 3. Fixed Assets still in service shall remain in the asset account even when fully depreciated. For fully depreciated assets, a nominal amount of P1.00 each shall be assigned to such assets for the purpose of facilitating accounting control. 18 De-recognition De-recognition means that the cost of the plant, property and equipment together with its accumulated depreciation is removed from the accounts. This takes place in the following instances: (a) on disposals, and (b) when no future economic benefits are expected from its use. ‘ACAM for ECs Page 115 \1. An asset shall be removed from the balance sheet on disposal or when it is withdrawn from use and no future economic benefits are expected from its disposal. 2. The gain or loss on disposal is the difference between the proceeds and the carrying. amount and shall be recognized in the income statement. 3. Property and equipment may be disposed off or removed from service for the following reasons: 1, Ordinary Retirement Ordinary retirement occurs when an asset wears out from long usc and is discarded of sold as junk. Assets that are fully depreciated o because it becomes inadequate, suspended or obsolete fall under ordinary retirement and should be written down or sold. Any resulting gain or loss from its sale shall be charged in the EC’s operation for the period when the sale or write-off took effect. 2. Pxtraordinary Retirement 3. Sale Destruction or abnormal or extraordinary retirement usually results when an assets rendered uscless because of flood, fire or other fone majeure event. The destroyed property or equipment shall be closed in the EC books, charging any loss (net of any proceeds from insurance) incurred in the operations. Sale occu s when an asset is disposed of prior to normal retirement ate. tee eri ae ACAM for ECs Page 116 \4 ‘The sale of EC properties are recorded in the books by closing the cost of the asset and the pertinent accumulated depreciation and recording the resulting gain or loss on the period the sale was consummated. However, sale of real property shall be recorded taking into consideration applicable provisions of BIR rules and regulations regarding the sale of real properties Impaitment Impairment is a fall in the market value of an asset so that its recoverable amount is now less than its carrying amount in the balance sheet/ statement of financial condition/ statement of assets and liabilities. PAS 36 is the standard applicable on Impairment of Assets and is adopted for this Section. 1. Measurement- an asset is considered impaiced when its carrying amount exceeds the amount that can be recovered through use or sale of said asset. 2. In case of impairment, the EC shall write down the carrying amount of the asset to its recoverable amount. The amount of reduction is considered as the impairment loss 3, Recognition - The impairment loss shall be recognized immediately and is presented as a separate item in the income statement. 4. The recoverable amount of an asset is determined individually. If this is not possible however, the EC shall determine the recoverable amount of the cash generating unit (CGU) to which the asset ere ene een ACAM for ECsbelongs. PAS 36 —Impairment of Assets defines CGU as “Yhe smallest identifiable group of assets that generate cash inflows from continuing use that are Largely independent of cash inlaws fram other assets or group of assets.” 5. Reversal of Impairment Loss — If the recoverable amount of an asset that has been previously impaired turns out to be higher than the assets current carrying amount, the carrying amount of the asset shall be increased to its new recoverable amount. 6. The reversal of an impairment loss shall be recognized immediately as income in the income statement only to the extent of the loss previously booked. For revalued assets however, ary reversal of an impairment loss shall be treated as a revaluation inerease, ie. credited to income to the extent that it reverses a previous revaluation decrease, and any excess credited to revaluation surplus. 1.9 Recording and Reporting 1. Appropriate subsidiary ledgers and/or continuing Property Record (CPR) shall be maintained for all asset acquisitions and this shall be kept updated at all times as regards values, depreciation, repairs and maintenance charges and incidents. 2. A regular reporting system on fixed asset values and corresponding depreciation shall be instituted and maintained 3, For disposal of assets, actual disposal shall have the approval of the General Manager and/or the Board of Directors depending on the EC's policy on levels of approval u-y401 le neEEEEEERiaiimmEEemmeeeeeeeee ACAM for ECs Page 1181.9 Asset Protection Adequate insurance coverage shall be secured for fixed assets “The annual physical inventory listing could be used as a reference point. “Adequate security and safety measures should be implemented ‘on all premises covering the fixed assets. This includes the installation of security lock/access systems, maintenance of an adequate number of security personnel and fire extinguishers at strategic locations. Handy tools and other equipment shall be safeguarded and kept in a specific warehouse. Responsibility for chem should be clearly defined and shall be issued only upon approved requisition, 2. File Maintenance ‘ACAM for ECs Fixed assets procurement/ownership and accountability documents including guaranty cards and manuals for equipment shall be maintained by the department utilizing such equipment. Related disbursements documents and corresponding subsidiary ledgers shall be maintained by Accounting, Specific records to monitor locations and accountabilities of machinery and equipment shall be maintained by Warchouse. Page 1192. CASH 24 CASH RECEIPTS 21.4 Overview Monetary receipts of the EC represent collections arising from power bills, rentals of poles and other related property, interests, grants, employees’ excess cash advances, etc. These receipts may be in the form of cash, (hills or coins), checks which are dated on the same day, ante or post-dated checks, manager's or Cashier’s checks, bank/fund transfers and credit advice. This section presents control objective, policy statements and guidelines. 24.2 Control Objective To ensure that all collections of cash and/or checks received by the EC are adequately controlled against loss or theft, properly recorded and accounted for and reported to management on a regular basis. 24.3, Policy Statements 24.3.1 Authorization and Responsibility 24.311 Only duly designated employees and collection agents are authorized to receive cash due to the EC for and its behalf. All cash collections received by such authorized persons shall be issued with the appropriate receipts, 21.3.1.2 All receipts of cash and checks from trade accounts, grants and other sources shall be the responsibility of the Cashier, or in cases where there are subareas, the duly designated employee thereat. ‘This shall be his/her responsibility until all receipts are deposited in the ACAM for ECs Page 120 i 7's accredited bank.2.13.1.3 The control and issuance of blank pre-numbered accountable forms for the cashiering function such as checks, Official Receipts, and Provisional Receipts shall be under the responsibility of the Finance Manager or the Area Manager of the concerned sub-area. 243.14 Negotiable assets other than currency, checks and drafts should be in the custody of the Finance Manager or designate. 243.2 Handling of Cash Receipts and Related Accountable Documents 21.3.2.1 The Cashier shall be responsible for the control and usage of currently issued Official Receipts (OR). Unused ORs shall be kept under lock and key. 21.3.2.2 Cash collections should not be used to accommodate personal or business checks or to pay for obligations or daily expenses unless otherwise authorized by management under special arrangements. 2.13.23 All collections for the day shall be kept intact and deposited to the authorized depository banks at the end of the day or immediately on the next banking day. Undeposited cash receipts must be kept in a safe or vault. 21.3.3 Handling of Bank Accounts 213.31 Bank accounts that may be opened by the EC must have the approval of the Board of Directors. Correspondingly, authorized signatories covering the accounts shall likewise be approved by the Board of Directors. te ret centenarians ‘ACAM for ECs Page 12121.33.41 Transfer of funds from one bank account to another may be allowed provided there is prior approval of responsible officials of the EC under the established level of signing authority. 21.34 — Segregation Of Duties 213.41 Handling of cash receipts shall be limited to designated personnel authorized to handle cash while recording of transactions shall be separately handled by Accounting Office. Likewise, deposit of cash should not be assigned to Accounting personnel. 21.342 The Cashier should not have access to accounting records. Verification of records shall pass through appropriate clearance from the authorized officer. 213.5 Bank reconciliation 2.1.3.5.1 Monthly bank reconciliation statements must be prepared on a timely basis 2.1.3.5.2 Bank debit and credit memos/advice must be delivered to an employee other than the Cashier, usually the authorized Accounting personnel. ‘The mail should be opened by someone other than the Cashier 2.1.3.6 Physical Safeguards 2.1.3.6.1 Computer passwords and safe/vault combinations should be kept confidential and periodically changed in accordance with the EC policy. Such information should be limited to authorized officers. aerate ‘ACAM for ECs Page 122213.6.2 Safety vaults should be kept in a secure place, with access limited to authorized officers. 214 Recording and Reporting 2.14.3 Appropriate documentation for cash receipts such as, as the Official Receipt (OR) shall be observed at all times. 2144 Bank accounts shall be maintained by nature of receipts and disbursements as practicable. ‘The banks shall be notified of the authorized signatories to the accounts of the EC inchuding changes, if any, to prevent unauthorized withdrawals 21.4.5 Recording of cash transactions in the books of accounts shall be on a daily basis based on appropriate documentation. 214.6 Regular monitoring and reporting of cash accounts shall be instituted. 2.15 File Maintenance A systematic filing of related documents and reports on cash transactions (preferably on a per month basis) should be established and separately ‘maintained by the Accounting to facilitate verification of transactions entered in the cash receipts registers, net a ACAM for ECs Page 123 Xx2.2 CASH DISBURSEMENTS 2.2.1 Overview Disbursements are incurred to pay for EC purchases, its labor cost, administrative and other operating expenses. These are settled by check, through a Check Voucher (CV) and are adequately supported with original copies of required documents. Every transaction requiring check disbursements shall be verified and approved before payment takes place. ‘The following sections present the control objectives, policy statements and guidelines covering cash disbursements. 2.2.2 Control Objective To have adequate control over disbursements and to ensure that they are properly documented and recorded. 22.3. Policy Statements 2.2.3.1 Authorization and Responsibility 2.2.3.1.1 Check disbursement is 2 common responsibility of accounting and cashiering. Accounting shall be responsible for processing documents with supporting disbursements and shall ensure that these are valid and properly approved while Cashiering shall ensure that funds are available to support such disbursements. 2.23.1.2 Approval of disbursements must be in accordance with established level of signing authority. 2.2.3.1.3 Adequate internal control systems must be in place to ensure that no one is in complete control of any disbursement transaction. ACAM for ECs Page 1242.2.3.2 Processing of Disbursements 223.21 All disbursements shall be made through a properly approved and supported Check Voucher, issued sequentially 2.23.2.2 A Check shall only be prepared when there is a duly approved Check Voucher to support it, and shall be issued sequentially 2.23.23 Check payments shall be made payable to the payee and shall be crossed (For deposit to payee’s account) unless otherwise requested by the payee. 223.24 Signing of blank checks and checks payable to “Cash” or “Bearer” is prohibited. 2.2.3.3 Segregation of Duties 2.23.31 Check signors shall not have access to accounting records, cash receipts and petty cash fund. 2.23.3.2 Bank reconciliation statements must be prepared by someone who has nothing to do with cash and check handling and record keeping. 22.3.4 Physical Safeguards 2.23.4.1 Unused checks must be under the custody of the Cashier or Finance Manager. Appropriate control records must be maintained to ensure that the physical count (together with corresponding serial numbers and numbers of check-booklets) is intact and protected from damage, loss or theft. ACAM for ECs Page 125 X2.23.4.2 Unreleased (issued and duly signed) and unused checks shall be kept in a safe preferably under lock and key with access restricted only to the officer responsible (Cashier or Finance Manager) who maintains custody of the unreleased checks until this is released by him/her to the payee. 2234.3 Cancelled or spoiled checks shall be properly voided by stamping the word “Canceled” on the face of the check and filed in numerical order with the other checks returned by the bank. 2.2.4 Recording and Reporting 2.24.1 All processing documents (eg. check vouchers) that would support a disbursement transaction shall be pre-numbered and sequentially recorded or taken up in the books of accounts including its corresponding registers. 224.2 Recording of disbursements shall be on a daily basis and shall strictly follow the sequence of pre-numbered documents used. 224.3 A regular monitoring and reporting system covering disbursements shall be instituted and maintained to facilitate control and decision-making function of management, 2.2.5 File Maintenance A. systematic filing system shall be maintained to ensure that all disbursement documents and monitoring reports are intact and complete to facilitate retrieval and for future reference. tn reenter e ACAM for ECs Page 126 \3. CONSUMER ACCOUNTS RECEIVABLES, 31 Overview “Trade receivables or consumer accounts receivables (CAR) of the ECs represent amounts, collectible feom member-consumers due to consumption of electricity. On the other hand, other receivables include such items as advances to officers and employees, amounts due from other ECs, claims for rent, interest and dividends, and others. The following sections present control objectives and policy statements in handling and accounting for sales on ceed. 32 Control Objective To provide adequate control over all consumer accounts receivable accounts and establish accurate records for a certain period. This will also help facilitate prompt and efficient collection in accordance with agreed terms and conditions. 3.3 Policy Statements 3.3.1 Authorization and Responsibility 33.1.1 The Meter Reading Office is in charge of the reading of electric consumption of all types of consumers in accordance to the previously set schedule in a particular area. 33.1.2 The Billing Office is responsible for the preparation of the monthly billing statements of the consumers in accordance with the ERC- approved rate per kWh, 33.1.3 The Accounting Office is responsible for recording all transactions relative to the receivable accounts of the EC. ACAM for ECs Page 1273.3.2 Recording and Reporting 33.21 33.22 33.23 33.24 Consumer Accounts Receivables represents the billed accounts that remain unpaid ata given period ‘An allowance for doubtful accounts is set up on a monthly basis to be adjusted by year end after ascertaining the aging of the CAR in accordance with the NEA Memorandum dated 06 Jamary 1998 ented Guidelines on the Computation and Adjustment of Allowance for Bad Debts. The year-end balance of the Allowance for Uncollectible Accounts should be based on the schedule of percentage hereunder: Aging: Current —90 days past due 1% of CAR 91-180 days past due 2% of CAR 181-240 days past due 3% of CAR 241-360 days past due 4% of CAR Over one year 5% of CAR CAR accounts that are certain to be uncollectible following the procedures laid down by the NEA under its Memo dated April 6, 1993 on the subject Guidelines for Writing Off Worthless Consumer Accounts Receivables are written off and charged against the account Allowance for Uncollectible Accounts. ‘The CAR account is presented in the Statement of Assets and Liabilities under the Current Assets, net of the allowance for uncollectible accounts, The CAR account is further subdivided into subsidiary accounts to property reveal and segregate the amounts that are due to the EC and remain as its own asset, from the emounts that are collectible and due to be remitted to other agencies, as follows: arene tte te en ACAM for ECs Page 128 <33.241 CAR ~power bills 33.24.2 CAR—RFR/MCC 33243 CAR-VAT (to Genco, Transco, BIR) 33.244 CAR-UC (to PSALM) 33.24.5 CAR —Taxes (reimbursement to EC) 33.25 Advance payments for CAR are treated as Consumers’ Deposits and presented under Non-Current Liabilities. 34 File Maintenance A systematic filing system for customers’ accounts receivable and other receivables should be made, including transactions documentation like statement of accounts, notice for disconnection and other related documents for proper monitoring. Such documents must be updated and maintained at all times. reenter ener ACAM for ECs Page 129 NX4, LIABILITIES 4.1 Overview Liabilities are present obligations of an enterprise arising from past transactions or events, the settlement of which is expected to result in an outflow from the enterprise of resources embodying economic benefits, Accounts payables are liabilities to pay for goods or services that have been received or supplied and have been invoiced or formally agreed with the supplier. An accounts payable item as contrasted to notes payable does not involve the issuance of a formal written promise to pay and it does not call for payment of interest. ‘The following sections present the control objectives, and policy statements in handling abilities. 4.2 Control Objectives 4.2.1 To ensure appropriate accounting recognition in which the money (loan proceeds and the like), supplies or services are received for which a legally enforceable claim against the EC is established 422 To adequately monitor amounts due to creditors of the EC in order to be able to set up proper forms of payment for maturing obligations. 4.3 Policy Statements 4.3.1 Authorization and Responsibility While the Accounting shall be responsible in handling, processing and monitoring of payable accounts of the EC, Cashiering shall be responsible in, ensuring that funds are available to support maturing accounts payable. ence eeeneneneensienteene eee ACAM for ECs Page 1304.3.2. Recording and Reporting 4.3.2.1 Accounts payable shall be recorded when the corresponding, assets, expenses including payments for contracted services and losses are duly recognized with the appropriate documents to substantiate the existence of a liability on the part of the EC. 4.3.22 Obligations expected to be liquidated through the use of existing current assets or are expected to be liquidated within one year shall be classified as current liabilities, otherwise they shall be classified under non-current liabilities. 4.3.2.3 Payables/liabilities shall be measured at amounts established in exchanges usually the amount to be paid, sometimes discounted when the obligation requires payments that are relatively far in the future. 4.3.2.4 Adequate control over claims for lost or damaged goods and purchased goods shipped directly (to another site) must be in place to ensure that the EC recognizes and pays for the right amount and quantity of goods delivered. 4.3.2.5 Appropriate accounts payable for related business transactions shall be acctued during the period and properly cut-off at period end, 43.2.6 Periodic reconciliation of accounts payable for the GL and SL balances shall be made for the timely resolution of any discrepancy in the records, 4.3.2.7 The Aging Schedule and the Schedule of Accounts Payable shall be prepared to be used by management in planning for cash outlays related to payment of Accounts Payable. geen ‘ACAM for ECs Page 1314.4 File Maintenance A systematic filing system for documents, monitoring and financial reports relative to accounts payable shall be maintained to facilitate retrieval and verification in the Furure, eee nenene rennet ACAM for ECs Page 132 x5. CONSUMERS’ DEPOSITS 51 Overview ‘The Consumer's Deposits refers to the amounts paid by consumers in advance for power bills, meters (Jue for cefund) and other obligations to the EC. This account includes the bill deposit (or consumers’ deposit as used by the EC) requited by distribution utilities from customers for new and/or additional service as mandated by the Magna Carta for Residential Consumers and DSOAR promulgated by the ERC. The bill deposit requited is equivalent to the estimated billing for one month to guarantee payment of bills. The FC shall adopt the provisions as provided for by the Magra Caria and DSOAR, ‘The said deposits shall be presented under the liabilities section of the EC’s balance sheet as of a given period, including the related interest acccuing thereon. 5.2 Policies and Controls 521 Bill Deposit 5.21.1 A bill deposit shall be required from all residential customers to guarantee payment of bills for new and/or additional service 5.2.1.2 ‘The amount of bill deposit is equivalent to the estimated billing for one month. After one (I) year and every year thereafter, when the actual average monthly bills are more os less than the initia bill deposit, such deposit shall be cocrespondingly inceeased decreased to approximate said billing. 5.21.3 The Company shall pay interest in accordance with the provisions set forth in the Magna Carta and DSOAR. 'ACAM for ECS Page 1335.2.14 The bill deposit referred to hereof shall be refunded within one month from the termination of service provided all bills have been paid. 5.2.1.5 Customer who has paid his electric bills on or before its due date for three (3) consecutive years may, however, demand for the full demand of the deposit even prior to the termination of his service. ‘The consumer shall file for this purpose following, the guidelines and procedures set forth by the EC. Payment shall be made within one month from receipt of such application. 52.2 Meter Deposit 5.22.1 There shall be no collection of deposits attributable to the cost of ‘meters installed or to be installed. However, in cases of loss and/or damage to the electric meter due to the fault of the customer, the customer shall bear the replacement cost of the meter. 5.22.2 Previously collected meter deposits are t0 be refunded in accoxdance with the ERC pronouncements per individual EC. 5.3. File and Maintenance The EC shall maintain a record of each type of deposit reccived from each per customer. ‘ACAM for BCS Page 1346. ADVANCES FROM CUSTOMERS -nenenanenncnmnnnsnteenananmmnmttnttncii eect 61 Overview Advances from customers are amounts deposited to the EC by customers for cost of materials, labor, and other costs as determined after conducting a survey of the site, for the construction of lines or facilities for the type of service these customers requice Advances sequized from customers will eventually be refunded in their monthly power bills in accordance with the provisions of Magna Carta and DSOAR. ‘The following set of controls, policies and procedures shall be in accordance with the provisions set forth by the Magra Carta and DSO.AR as promulgated by che ERC. 62 Policies and Controls 621 The Company shall provide and shoulder the expenses for the extension of lines and installation of additional facilites, other than a service drop, for a customer located within thirty (30) meters from the Company’s existing secondary low voltage lines. 62.2 For customers located beyond what is described above, the customer shall initially fund the necessary expenditures for the requested /applied extension of lines. 623 The said advances shall be refunded to the pertinent customer in accordance with the provisions set forth in the Magra Carta and DSOAR 624 The EC shall design procedures in achieving a sound estimate of the requested extension of lines. 6.3 File and Maintenance ‘The EC shall maintain subsidiary records of the advances received from each ‘customer for easy ceference ene nti ‘ACAM for Ecs Page 1357. LOANS PAYABLE, etn nom 7A. Overview Loans Payable is defined as, an unconditional promise in writing made by one person to another, signed by the maker, engaging to pay on demand or at a fixed or determinable future time a sum certain in money to order of to bearer. For the |, TRANSCO and other financing institutions, either in the form of cash, consteuction materials or ECs, it represents the loans obtained from NE, properties (e.g, sub-transmission lines, vehicles). 7.2. Policies and Controls 7.21, All loan agreements shall pass through the approval of the appropriate bodies, such as EC Board of Directors, NEA, ERC, etc, as decmed appropsiate. 7.2.2. Loans payable shall be recorded at face value of the note. 7.23.Borrowing cost incurred for short-term loans and other long-tezm loans shall be charged to the EC's operations in the period incurred. 7.24.Borcowing cost incurred pertinent to borrowings specifically made to finance the acquisition, construction and production of a qualifying asset shall be capitalized in accordance to standards set under IAS/PAS 23- Leases 17.3, File and Maintenance The EC shall keep all its loan documents intact under the custody of a responsible officer and maintain subsidiary records of al its loans pavable. ‘ACAM for ECs Page 1368, MEMBERS? EQUITY 8.1 Overview ‘This Section describes the difference of the Members’ Equity for ECs registered under P.D. 269, as amended (under NEA) and CDA-tegistered ECs pursuant to RA 9520. ECs under NEA are non-stock and non-profit ECs. Each member pays the required membership fee and after compliance to membership requirements, the member shall be issued with the membership identification catd. ‘The CDA registered ECs are non-profit in nature. Each member is required to pay the minimum capital build-up as a requisite to become a bona fide subscriber of the EC. Share certificate is issued to members upon full payment of their minimum capital build-up (CBU). ‘This Manual incorporates the peculiarities present in ECs depending on the government agency where ECs are registered 8.2 POLICIES AND CONTROLS 821 For NEA-registered ECs: ‘The account Members’ Contribution represents the membership fees and contributions from cach member of the EC. ‘This is deposited to a restricted account and cannot be used for EC operations. The interest eared from this restricted fund is credited to Members’ Contribution, Patronage credit is granted to each member of the EC in accordance to the Implementing Rules and Regulations in Granting Patronage Credits to Consumers of ECs issued by NEA dated June 14, 2002. i ACAM for ECs Page 1378.2.2 For CDA-tegistered ECs: ‘This account refers to the ownership interest of members in the cooperative, as stipulated in the Standard Chart of Accounts issued by the Cooperative Development Authority. Amounts collected for Members’ Equity are deposited to the genetal fund and used for coop operations. ‘The Members’ Equity accounts inchided in this Manual are as follows: © Authorized Share Capital © Unissued Share Capital © Subscribed Share Capital © Subscription Receivable © Paid-Up Share Capital 8.2.21 The Articles of Cooperation of CDA-registered electric cooperatives stipulate the authorized share capital of the cooperative and the par value of each share, 8222 The authorized share capital is open for subscription by members (as defined under their Articles of Cooperation) and prospective members. 8.2.2.3 The prospective member-consumer is required to subscribe to and pay the minimum number of shates as set in the coop’s policy. The prospective member-consumer may subscribe to more than the minimum number of shares but is limited to the maximum set under RA 9520. 8.2.2.4 Any excess of revenues over expenses is regarded as a surplus and is recorded under the account Undivided Net Surplus. This shall be allocated and distributed at the end of each reporting period in accordance with Article 86 of RA 9520. Page 1388.2.2.5 Thirty percent of the Undivided Net Surplus shall be allocated to the statutory reserves to be appropriated as follows: # Reserve Fund — 10% * Community Development Fund — 7% © Optional Fund (for land or building) — 3% * Cooperative Education & Training Fund - 3% © Due to Union/Federation (CETF) — 5% 8.2.2.6 The above statutory reserves shall form part of the restricted funds of the EC and shall be funded separately under a separate bank account. The use of such funds shall be in accordance to the intention as provided under R.A.9520. 8.2.2.7 The temaining 70% of the Undivided Net Surplus shall be allocated for patronage refund and interest on share capital, It shall be allocated depending on Board approvals but should nor be less than what is requited under R.A. 9520, 8.2.2.8Patronage Refund is distributed to the member-consumers based on patronage of services, ie. energy purchased from the covp. On the other hand, Interest on Capital Share shall be based on paid-up share capital, the rate not exceeding the normal rate of return on investment. 8.2.2.9The Patronage Refund and Interest on Share Capital shall be distributed to the members either in the form of cash and or through the electric bill as a deduction item, 8.2.210 In case of a net loss, such will be charged to the Reserve Fund subject to the provisions of RA. 9520. ne ‘ACAM for ECs Page 1398.23 The modified terms for MCC to Reinvestment Fund for Sustainable Capital (RFSC) is adopted in accordance to ERC Resolution No.14, Series of 2011 X cee Et ACAM for ECs Page 140,9 REVENUES AND EXPENSES ‘mnmenerconeemntnnenninnnmnnenoanonncnninntt sence 9.1 REVENUE 9.4.1 Overview PAS 18 on Revenve prescribes the accounting treatment of revenue arising from certain types of transactions, It defines revenues as the “grass inflow of economic benefits uring the period arising in the course of ordinary activities of an entity when those inflows result in ‘increases in equity, otber than increase relating fo contributions from equity participants”. Revenue accounts of the EC typically include the following: 1. Revenue from its distribution activity which is its principal source 2, Other Operating Revenue from incidental transactions Non-Operating Revenue from non-electrcity related transactions, 4. Donations and Grants Subsidy from government ot private persons ot agencies 9.1.2 Control Objectives 9.1.2.1 To ensure appropriate accounting recognition in which the services rendered by the EC are correspondingly billed and received. 9.1.2.2 To adequately monitor amounts due to the EC for the rendering of service and the use of its assets in order to properly account for the inflow of benefits to the EC 9.1.3 Policy Statements 9.1.3.1 Authorization and Responsibility While the Billing Office shall be responsible in processing the EC customers’ billings, Cashiering shall be responsible in ensuring that rt rt ‘ACAM for ECs. Page 141collections and other revenue amounts received are handled and appropriately safeguarded, and Accounting shall be responsible for recording and reporting of such accounts. 9.1.3.2 Recording and Reporting 9.1.3.2.1 Recognition Revenue is recognized only when itis probable shat the economic benefits associated with the rendering of service will flow to the EC. It shall be recorded in the period in which it is earned in accordance with the accrual basis of accounting. Accounts that are assuredly uncollectible are recognized as an expense rather than as adjustment to revenue, 9.1.3.2.2 Measurement PAS 18 prescribes that “revwne shall be measured atthe fair value ofthe consideration received or receivable.” Yt defines “fair vaine as the amount for which an asset could be exchanged, or a ability settled, betaven nowledgeable, wil parties in an arm’s length transastion.” 9.1.3.2.3 Disclosure ‘The BC shall disclose the followings 1. Accounting policies adopted for the recognition of revenue 2. Amount of each significant category of revenue recognized during the petiod ftom rendering of service, and interest, royalties and dividends arising from the use of its assets by other entities. 9.1.4 File Maintenance A systematic filing system for documents, monitoring and financial reports relative to revenue accounts shall be maintained to facilitate retrieval and verification in the future. ene se ACAM for ECs. Page 1429.2 EXPENSE, 9.21 Overview In the PFRS Framework for the Preparation and Presentation of Financial Statements, expenses are “decreases in economic benefits during the accounting period in the Joon of ongfows or depletions of assets or other than those relating to distributions to equity participants”. These may be in the form of cidences of abilities thas result decreases in equity, an outflow or depletion of assets such as cash and cash equivalents, inventories, or property, plant and equipment. Expense accounts of the EC typically include the following: 1. Cost of Service that includes the cost of power purchased or generated and other directly related expenses 2. Distribution Expenses that include operation and maintenance expenses relating to distribution and distribution connection assets 3. Supply Expenses that relate to consumer accounts expenses Metering Expenses that relate to meter reading and metering, activities Other Operating expenses such as depreciation, amortization and interest expenses, Non-Operating expenses from non-electricity related transactions Losses such as loss on disposal, impairment loss 9.2.2 Control Objectives 9.2.2.1 To ensure appropriate accounting recognition in which the cost of servi rendered to the EC and the expenses incurred by the EC in its operations are correspondingly paid. 9.2.2.2 To adequately monitor amounts incurred by the EC in the course of its operations in order to properly account for the decrease in economic benefits to the F eee ‘ACAM for ECs Page 143,9.2.3 Policy Statements 9.2.3.1 Authorization and Responsibility While Accounting shall be responsible in handling, processing and monitoring of cost and expense accounts of the EC, Cashiering shall be responsible in ensuring that funds are available to pay maturing costs and expenses. 9.2.3.2 Recording and Reporting 9.2.3.21 Recognition Expenses are recognized in the income statement (@ when the increase in liabilities or decrease in asset is recognized, and this can be measured reliably (b) based on a direct association of the cost and the income, ie. the matching of costs and revenues (©) during the accounting periods in which these are consumed, i.e, depreciation and amortization (@) when an expenditure produces no future economic benefit, in which case the expense is immediately recognized (© when a liability is incurred without the recognition of as asset, ie. lability due to injuries and damages 9.2.3.2.2 Measurement Expenses shall be measured at the amount of decrease in economic benefits. Estimates may be used but must be reliable ‘measurements of the decrease in economic benetits. 9.2.3.2.3 Disclosure ‘The EC shall disclose the following: gent ‘ACAM for ECs Page 144(@) Accounting policies adopted for the recognition of expense: (b) Amount of each significant category of expense recognized during the period. 9.2.4 File Maintenance A systematic filing system for documents, monitoring and financial reports relative to expense accounts shall be maintained to facilitate retrieval and verification in the future. ACAM for ECs. Page 145ACAM for ECs ACCOUNTING AND COST ALLOCATION MANUAL CHAPTER IV ALLOCATION METHODS Page 1461, OVERVIEW OF ALLOCATION FACTORS" ‘This Manual will describe the allocation methodologies used to allocate costs and revenues to and between Business Segments, inchiding: (@) a description of the basis, formula(e) and/or methodology ies) used in respect of each cost and revenue item; (b) the reason for choosing the basis, formula (¢) or methodology(ies)s and (©) the quantification of any factors applied in allocating unattributable costs or revenues. Under Article 111 of the BSG, Accounting Separation Statements must be prepared in such manner that all costs are apportioned among business segments in accordance with the principles set out undet Sec. 3.4. This section shall provide guidance as to the policies and procedures to be adopted by the EC in allocating the cost of all transactions to the seven (7) business segments as defined in the BSG. ‘The Accounting Separation Statements must be prepared on the basis that: (@) items that are directly attributable to @ Business Segment are allocated accordinglys (b) items that are indirectly attributable to a Business Segment are allocated using an appropriate allocation method and (6) items that are unattributable to a Business Segment ate allocated using 2 fair and reasonable method. “The overview ofthe allocation factors are excerpted trom the Business Separation Guidelines issued by the Energy Regulatory Commission ee eee ACAM for ECs Page 1472, PRINCIPLES OF REVENUE AND COST ALLOCATION 2.1, Allocation based on causation To the extent possible, revenues and costs must be allocated to Business Segments on the basis of causation ~ that is, each cost or revenue must be allocated to the segment that caused the cost or revenue to atise. In practice, causation is determined by identifying one of the following relationships: @) a directly traceable cause and effect relationship between the revenue or cost and the carrying out of an activity or provision of a service or product: or (©) a verifiable relationship between the revenue or cost and the carrying out of an activity or provision of a service or product; of (©) a direct causal relationship between a pool of common costs of revenues and the carrying out of an activity or provision of a service or product, such that allocation of the pool of common costs or revenues can be made using a relevant, reliable and verifiable factor, such as relative use. 2.2 Allocation of direct, indirectly attributable and unattributable costs and Revenues: Direct costs (er revenues) are costs (or revenues) that are solely incurred (or generated) in the undertaking or provision of a particular activity or service or product, regardless of whether such costs (or revenues) are recorded in the accounts against the relevant item, Direct costs will be allocated to the relevant Business Segment based on this direct causal relationship. ‘ACAM for ECs Page 148Indirectly attributable costs (or revenues) are costs (or revenues) that are part of a common pool of costs (or revenues) but which can be attributed to a particular ‘activity, service or product through a non-arbitrary, commercially sustainable and verifiable cause and effect relationship. Indirectly attributable costs (or revenues) will be allocated to the relevant Business Segment using an activity-based approach. Unattriburable costs (or revenues) are costs (or revenues) that are part of a common pool of costs (or revenues} and which cannot be attributed to a particular activity, service or product through a non-arbitrary, commercially sustainable and verifiable cause and effect relationship. Unattributable costs (or revenues) will be allocated on a fair and reasonable basis as documented in this ACAM. If a causal relationship cannot be established for a particular cost (or revenue) without undue cost and effort, the cost (or revenue) will be allocated on a fait, reasonable and defensible basis, as documented in this ACAM. 3. ALLOCATION FACTORS Allocation Factors used in this Manual are described hereunder: 3.4, Asset Allocation Factors (AAR) 3.1.1 PLTSERV — Total Plant in Service Factor 3.1.2 PLISERVXA — Total Plant in Service exchiding General Plant Factor 3.1.3 PLTSERXI ~ Total Plant in Service excluding Intangible and General Plant Factor 3.41.4 DSDCS - Distribution Service and Distribution Connection Service Factor 3.2.Revenue Allocation Factor (RAF) 3.2.1 OPREV — Total Operating Revenues Factor ACAM for ECs Page 149 ‘3.3,Payroll Allocation Factors (PAF) 33.1 PEXAG - Total Payroll excluding Administrative and General Payroll Factor 3.3.2. PAYROLL ~ Total Payroll 3.4.Other Allocation Factors (OAF) 3.2.1 CUST — Number of Customers Factor 3.2.2. KWH ~ kiloWatthour Sales Factor 3.2.3. PUR — kiloWatthour Purchased Factor 3.24 MET —Number of Meters Factor 3.2.5 CP — Coincident Peak Demand Factor 3.26 NCP ~Non-coincident Peak Demand Factor 4. STEPS TO BE FOLLOWED IN ASSIGNING FACTORS ‘The desired outcome in assigning costs and computing the allocation factors can be attained with a complete chart of accounts. This is to be accomplished following these steps: 4.1 STEP 1: Idemtify Directly Attributable Costs 44.1 Identify the business segment to which the costs or revenues can be directly attributed. This c. be accomplished by (@) “tagging” cach asset, or () assigning revenues, or (6) assigning payroll cost of each employee of the EC with the business segment itis mainly associated with. 441.2. Identify the assets and personnel that are shared between business segments in preparation for Step 2. ‘ACAM for ECs Page 1504.2 STEP 2: Establish Causal Relationships 4.2.1 In cases where assets are shared between two business segments, it is better to allocate within the asset list itself. 4.2.2 An example of this could be storage facilities utilized by both distribution services and distribution connections services. A simple and logical means of assigning the cost of the storage facility to distribution services and to distribution connection services may be to compute the floor area utilized by each, and allocate the cost of the facility to both segments using this proportion. 4.2.3 After Step 2, all the business segments’ assets and personnel accounts (except for general and administrative) should be fully identified. ‘This is because they, along with the revenue, will form the basis for computing the allocation factors for all the other accounts. 4.3 STEP 3. Compute Allocation Factors (For both indirectly attributable and unattributable costs and revenues) 4.3.1 Asset Allocation Factor (AAF) Description: The asset allocation factor is computed using the identified assets of each business segment. The AF can be used to allocate both indirectly attributable and unattributable costs and revenues. ‘This is ideal to use for cost and revenues that are shared between business segments, but may not be used by all, There are several AAF that can be used as listed in Section 3.1 above. ACAM for ECs Page 151.Formula: 1. Determine how many and which business segments share this asset. 2. Compute the allocation factor using the formula: Where: AAP, = avset allocation factor for business segment i AA, = subtotal of attributable assets for business segment i N= umber of business segments sharing this asset 3. Allocate the cost to the corresponding accounts by using the computed factor 4.3.2 Allocation Factor 2: Revenue Allocation Factor (RAF) Description: This allocation factor is computed using the total revenue of each business segment from the test year. The RAF can be used to allocate both indirectly attributable and unattributable costs and revenues. Listed in Section 3.2 is the lone RAF which is the OPREV factor. Formula: 1. Determine how many and which business segments share this revenue. 2. Compute the allocation factor using the formula: nnn ae ACAM for ECs Page 182 4Where: RAB | = revenue allocation factor for business segment i ‘TR N ; subtotal of revenues for business segonent i number of business segments sharing the revenue to be allocated 3. Allocate the revenue using the computed factor 4.3.3 Allocation Factor 3: Payroll Allocation Factor (PAF) Description: ‘This allocation factor is computed using the payroll expenses identified for each business segment. The PAF can be used to allocate both indirectly attributable and unattributable costs and revenues, and the allocation of Administrative and General Payroll. There are two payroll allocation factors listed in Section 3.3 above. Formula: 1. Determine how many and which business segments share this cost. 2. Compute the allocation factor using the formula: par, =~ Pr Where: PAF, Py, Peprall allocation factor for business segment i swetotal of payroll for business segment N= muonber of business segments sharing this cost ACAM for ECs Page 153 X3. Allocate the cost to the corresponding accounts by using the computed factor 43.4 Allocation Factor 4: Other Allocation Factor (OAF) Description: This allocation factor is computed using statistics such as number of customers or meters, kwh purchased or sold, peak demand for each business segment. The OAF can be used to allocate both indirectly attributable and unattributable costs and revenues. There are six other allocation factors listed in Section 3.4 above. Formula: 1. Determine how many and which business segments share this cost or revenue, 2. Compute the allocation factor using the formula: os, yosi ther allocation factor for business segment i = subiotal of relevant item| statistic for business seaprent N= number of business segments sharing this cot 3. Allocate the cost to the corresponding accounts by using the computed factor ‘The Allocation Factors to be used for each account listed in the Chart of Accounts are shown in Appendix “B, ‘ACAM for ECs Page 154ACCOUNTING AND COST ALLOCATION MANUAL CHAPTER V INTER-SEGMENTAL TRANSACTIONS rn ‘ACAM for ECs PeeleINTER-SEGMENTAL TRANSACTIONS AND TRANSFER PRICING PRINCIPLES The following principles on inter-segmental transactions and transfer pricing ace excerpted from Article IIL, Section 36 of the BSG, as amended and shall be adopted in this Manual: 1. Disclosure — through a note in the Accounting Separation Statements 14. For each Business Segment, the EC shall disclose the rotal value of Intec-Segmental Transactions in respect of each of the other Business Segments within, and each of the other activities conducted by, the Electric Power Industry Group of which it is a member, being Inter segmental Transactions that occur (ia whole or in part) during the Financial Year for which the Accounting Separation Statements are prepared. 1.2. For each Significant Inter-Segmental Transaction that occurs (in whole or in part) during the Financial Year for which the relevant Accounting Separation Statements are prepared, the Electric Power Industry Group shall disclose the costs and revenues that arise from that Significant Inter-Segmental Transaction. A transfer journal using the double entry bookkeeping shall aso be disclosed providing the descripticn of athe item; b. the balancing accounting entry; ©. the Business Segment(s), or other activities, in whose statement of income the balancing entry or entries arise. 2. Transfer Pricing ‘The relevant values, costs and revenues shall be calculated in accardance with Sections 3.6.4 and 3.6.5 of the BSG, as amended, viz: ea \vi-aara-Sneieeeee EEE ‘ACAM for ECs Page 156“9.64 A transfer price for a product, eric, or capital asset is the cost of that product, serie, or capital asset as recorded by the Business Segment that acquires that product, sence or capital asset from another Business Segment or from another business eondscied by a member of the rekvant Eletric Power Industry Group (rrepeatte of whether the two Business Segments, or the Business Segment and the ‘other business, are nithin, or conducted by, a single member of ths Elkcwric Power Industry Group a are within, or conducted by, diferent members of the Electric Power industry Grosp, 3.6.5 A sransfor price must be the same ar the price paid by an unrelated entity that cuguires the sare product, senicx or capital asset in am arms-length transaction For these purposes: (4) one or more ofthe acptable transfer pricing methods desoabed in Appendic Hyor ©) another transfer pricing method approved by the ERC, may be ned.” 3. Acceptable Transfer Pricing Methods The EC shall adopt as deemed applicable in a given transaction and situation, any of the acceptable pricing method as suggested in Appendix H of the BSG, in calculating, for the teansfer prices. These are described below: 341 Transfer prices for services, products and assets, The pricing of secvices, products, or assets transferred between related centities/business segments should be consistent with one of the following methods: re ‘ACAM for ECs Page 1573.1 Prevailing Market Price Prevailing market prices for services, products or assets are those that aze generally accepted matket prices that can be substantiated or corroborated by comparable transactions, auction prices, or appraisal values (reduced to sound values) These ace the prices set for a transaction between non related parties. 3.4.2. Tariff Based price This pricing method uses prices that ace approved by ERC. The transfer price is computed using the forecast volumes multiplied by the approved price, minus the forecasts of relevant funure costs, all discounted for the expected time value of the money. 3.13 Fully Allocated Costs Fully allocated costs consist of the sum of ditect plus an appropriate shave of indirectly attributable costs and unattsibutable (common) costs. ‘This pricing method requires that revenues collected from the sale of Products or services or the transfer of assets to inteenal business segments or related entities equals the sum of direct costs plus an appropsiate shace of inditectly attributable costs and common costs Of primary consideration is the reasonableness of the allocation of (or ‘mark-up within the price to cover) unattributuble (common) costs. 3.14 Incremental Cost ‘This method refers to the pricing of services, products or assets based only on the additional costs added by undertaking the operation in question of supplying the service or product in question, while fixed, shared and common costs ate supported by pre-existing services. Any incremental capital costs should also be inchided in an incremental analysis. ree ‘ACAM for ECs Page 158315 Cost Pius This pricing method refers to the pricing of services, products, or assets based on incremental costs plus an appropriate mark-up to reflect the shaze of joint and common costs that are attributable or may be faitly allocated to the product, service, or asset. 3.1.6 Comparable Transaction Price This pricing method compares the price for a service, product or asset transferred between related parties to the price charged for a comparable service, product or asset transferred between independent entities in comparable ciccumstances. A comparable transaction is considered comparable if * the differences between the transaction being compared or the enterprises undertaking the transactions cannot materially affect the price in the open market; or ‘+ reasonable and accurate adjustments can be made to account for any material differences. 3.2 Transfer prices for capital assets transferred 3.2.1 Disclosure as part of the Inter-Segmental transaction 3211 Any material transfer of capital asse:s to related entity o¢ internal business segment 321.2 Such disclosure must state the difference between the prevailing market price and the net book value of the capital assets 32.2 Definition of a material transfer - a transfer of capital assets whose value is greater than 5% of the value of net assets of the related entity or intemal business segment to which those capital assets are transferred. The value is calculated in accordance with the Appendix G of the BSG, as amended rr \CAM for ECs. Page 159ACCOUNTING AND COST ALLOCATION MANUAL CHAPTER VI FINANCIAL REPORTS ‘Steen een ACAM for ECs Page 160Overview Under the PFRS, a complete set of financial statements consists of the following: (1) a balance sheet, also called a statement of financial position — presents the economic resources and claims of an entity (2) an income statement — presents the changes in the economic resources and claims of an entity (3) a statement of changes in equity — shows the changes in the entity’s economic resources and claims not resulting from financial performance (4) a cash flow statement — shows the changes in the entity’s cash flows, and (8) notes, comprising a summary of significant accounting policies and other explanatory material ‘The Monthly Financial Statistical Report (MFSR) prepared and submitted by ECs to the NEA includes the following: (1) Section A ~ Statement of Operations (or the income statement) (2) Section B ~ Consumer Sales and Revenue Data @3) Section C — Balance Sheet (A) Section D — General Statistics (8) Section E ~ Statement of Cash Flows For CDA-registered ECs, the required yearly Comprehensive Annual Performance Report (CAPR) includes data for the following financial statement components: ‘reteset ‘ACAM for ECs Page 161 \(1) Statement of Financial Condition (Balance Sheet) position — shows assets, abilities, and equity accounts as of a given date (2) Statement of Operations (Income Statement) ~ presents revenues, costs and expenses, gains and losses and net surplus or net loss. The Difference between revenues and expenses is called net surplus that is allocated in accordance with the provisions of RA 9520 otherwise known as the Philippine Cooperative Code of 2008, or the cooperative’s By-laws (3) Statement of Changes in Equity — shows separately the changes in members’ equity, donations and grants and statutory funds (#) Cash Flows Statement — summarizes all the cash activities of the cooperative Under Section 3.1.3 of Article II of the BSG as amended, ERC requires submission by the EC of the following Accounting Separation Statements: (1) statement of income for each Business Segment (2) statements of assets and liabilities for each Business Segment (3) cash flow statement for each Business Segment @) total statement of income aggregating all of the Business Segment statements of income into one statement that is reconciled to the statement of income contained in the General Purpose Financial Statements that pertain to the Electric Power Industry Group of which the EC is a member, (5) total statement of assets and liabilities aggregating all of the Business Segment statements of assets and liabilities into one statement that is reconciled to the balance sheet contained in the General Purpose Financial Statements that pertain to the Electric Power Industry Group of which the EC is a member which in cach case shall include information on Inter- ACAM for ECs Page 162 ‘segmental Transactions as required under Section 3.6 of the BSG, as amended. This Manual has been so designed such that the information to be incorporated in the financial statements so required by all regulators of the ECs, regardless of the registering government agency, can be made available in order that the ECs can comply with financial reporting requirements. Sees pemenenseeet ACAM for ECs Page caACCOUNTING AND COST ALLOCATION MANUAL APPENDIX “A” DETAILED CHART OF ACCOUNTS moeeatensssheanase mmm SO ee ene x[APPENDIX *A" ACCOUNTING AND COST ALLOCATION MANUAL FOR ECS DETAILED CHART OF ACCOUNTS ‘ACCOUNT CODE ACCOUNT TIME 4100 - 000 - 00 - 000 ASSETS 1D = 310-000 - 00 - 000 Non Current Assets 1D = 312 000 00 - 000 Distribution Utfty Plant and Equipment. 1D = = 101 - 00 - 000 Distrisution Uity Plant and Equipment In Service D+ = + 0 - 900 Land, Land aight an Improvements De = 531-000 Bulting D+ = 2-000 Structures and Improvements D+ 3 - 000 Staton exigent D+ 4 + 000 ales, Towers, and Fixtures o- 35 - 000 Overhead Conductors and Devices ° + 16 + 000 uncerground Conduit/Raceways D- +17 = 000 Underground Conductors and Devices ° = 48 = 000 —_Distbution Line Transformers and Circuit Relosers o- = 19 - 000 Power Conditioning Eauipment ° = = 20-000 ——_Reguiated Enty Property on Consumers Premises ere Instalation on Consumers’ Premises er Lessee property on Customers Premises D+ + = 28-090 street Lights and Signal System D- = = 22-000 submarine Cable System D+ = 28 - 000 Service Drop Wires & Egvioment o- + 24 = 000 Meters, Metering Equipments, and Metering Transformers D+ 25-000 once Furniture and Equipment D+ = = 26 - 000 Transporation Eauipment D = + + 27 - 000 Tools, shop, Safety Gadgets, and gorage/Motorpoal Equment = += 28 - 000 Laboratory and Testing Equiomest Ds == 29 + 000 Informations Systems and and Related Equipment D = = = 30-060 Power Operated Eauipment D = ++ 31 - 600 Communication Equipments D- + = 2 - 000 Miscellaneous Eavioment and Other Assets > 83 = 000 Electric Pant Purchased B= 102 - 00 = 000 wistbution Unity Pant and Equipment Not Yet in service D = = + 40 = 000 construction Work In progrest pe oon Construction Work n progress By Contract p- e + 002 Construction Work In progress By Adminstration pee 003 Construction Workin progress - Special Equipment D- 34 = 000 istbution Uy Pant and Equipment Held For Future Use D = = 103 - 00 - 000 ostrbution tty Plant and Eavioment- Appraisal Inereasa B= +104 - 00. + 000 Accumulated Depreciation - Dist Utility Pant and Equipment In Seve + 5 20 000 Accum.Depr.-Bulsing B= = + a4. 000 ecu. Depr- Structures and Improvements D = + = 42 - 090 cumulated Depreciation Station Eauipmernt d- + 1B = 000 Accum. Depr. Poles, Towers, &Fintures o- + 14 + 000 Accum. Dept. Overnead Conductors and Devices > 35 = 000 Accum Dep. - Underground Conduit/Raceweys, ° = = 38 = 900 Accum. Depe.- Underground Conduit and Devices B= == 97 = 000 Accum, Oepr.- Ot. Line Transh. and Circuit Reclozers = = = 18 - 000 ——_Accumuiated Depreciation -Power Conditioning Equipmert = = = 49 = 000 Accum Dear.» Regulate Entity Property on Cane B= = = 20-000 Accum Depr- Street Lights and Signal Sytom D = = = 21-000 Accom: Dep. Submarine Cable System D = = = 22 - 000 Accum Depr- Service Orop Wires & Equipment B= == 28 + 000 Accum Depr.- Meters, Metering Equip. Metering Trans B= == 28 000 Accum depr. Office Furitere and Eau. ° + 25 = 000 Accum. Dope - transportation Equipment B= == 26 - 000 Accum Dear 100, Shop, Safety Gadgets, eotage/mtrpco equip, D+ = = 27-00 Accum. Depr.- Laboratory and testing eau pment PageACCOUNTING AND COST ALLOCATION MANUAL FOR ECs DETAILED CHART OF ACCOUNTS © = += 28 - 000 Accum. Depr. Information systems and related equip. D- = 29-000 Accum. Ovor- Power Operated Equipment D = = + 30-000 Aceum.Depr Communication Equipments, o- + 31 = 000 Accum. Dope. - Miscellaneous ecuipment and cther assets D+ = 2-000 Accum. Dep. - Electric Plant Purchased 1D. +105 - 00 - 000 Accumulated Depr.- ist Uity Plant In Service Mel for Future Use B+ - 105 - 00 - 000 Acrumuiates Dep. «Dt. Utilty Plant In Service-Apprasal increase 6 - 112-000 - 00 - 000 Generation Plant G + =O 00 - 000 Land, Land Rights, and improvements G += 102-00 + 000 structures and Improvement G + +103 00 - 000 Fuel Hoiders, Producers, and Accessories 6 +104 - 00 - 000 Access Road, Dam, Surge Tanks, Headrace,Penstock G - —=105- 00 = 090 Accessory Electra! Pant G = -108- 00 - 00 Turbine, Generator, ET. G = +107 - 00 - 000 stancby Unit Generators G+ =108- 00 - 090 Miscelaneous Generation Pant & Cavioment G + = 109 - 00 + 000 Generation Plant-Aporasa increase & + =110 + 00 - 000 Accurutates Dapreciation- Generation Pant G = + = 10 = 000 Accumuated Depreciation - GenPlant Min Hydro Power Pant G = + + 11 = 600 Accumulated Depreciation - Structures and Imarovements B= + + 12 - 000 Accumulated Depreciation - Fuel Holders, Prod and Ace G = + + 18 - 000 Aceumalates Depreciation - Access Ra Dam, Surze Tanks G = + = 14 = 090 Acaumulates Depreciation - Accessory Eletial Pant G = + 15 - 000 Accumutatee Depreciation - Turbine, Generator, TC G = + 36 - 000 Accumustee Depreciation - Standby Unit Generator 6 == AT = 000 Accumulated Depreciation - Mise, Generation Plant & Eau G = 411 - 00 - 000 Accumulated Depreciation Generation Pant- Appraisal Increase = 438 000 - 00 - 000 Restricted Fund D = 401 = 00 - 000 Restricted Furd- membership ° 40 = 000 RRM Main o- - sans O00 REM Area 1 1D - -202- 00 - 000 Restricted Fund - 8 Deposit . 40 000 RF-BDAMain D- - . a - O00 RE-BD-Area 2 D = =203 = 00 = 000 Restricted Fund - Power Bil Deposit D- = 19 + 000 REPBO-Main B= San: 000 aF-PBD-Araa 2 B= -104- 00 - 000 Restricted Fund - Meter Cepost B= +205 - 00 - 090 Restricted Fund - Government & NGO Subsidies B= =208- 00 - 090 Restricted Fund - Reinvestment D- -107- 09 - 000 Restricted Fund -RFSC D5 240 000 RERFSCMain| De 00 RERESCAtea 1 D+ =108- 00 - 000 other Restricted Fund 1D = 116-000 - 00 - 000 Other Non Cutrent Assets 1D =201- 00 - 00 Investment in Associations/Organzations D+ +102 00 - 090 Investment D- +103 00 - 090 Security Deposits 0-5 5 a0: 000 ‘Genco ° = 1s 000 Nece DB. - 5 a2: ono Escrow D. +13 = 060 was . 304 - 00 - 000 terminvastment D- - 10 - 09 Investment in Nor-Mareetble Equity Securites* D+ 5 a2. 000, Other Funds and Deposts® 405 - 00 - 000 Boogia! Assets = 10 = 000 Horses : <1 + 000 Carabao : +32 - 000 ows : = 33 = 000. Does Page 2ACCOUNTING AND COST ALLOCATION MANUAL FOR ECs DETAILED CHART OF ACCOUNTS = +106 + 00 = 000 Accumulated Amortization - Biologia Assets = +107 + 00 = 000 Intangiate Aazets 7 + 30 = 000 Franchise and Consonts 108 - 00 = 000 Accused Amerttation Intangible Assets 30 - 000 ‘Accum Depr Franchise and Consents B= 109 - 00 - 000 Mis, Non Current Assets o- 10 + 000 eating Accounts (pcsteersei “Teansportaton Clearing Def} sage Payot -Cleating De 2. a: 000 LVxT-Input Capital Gods 1D = 120-000 - 00 - 000 Currant Assets 1D = 121-000 - 00 - 000 cash 1D =401- 00 = 000 Cashin Bank- General fund = -102- 00 = 000 Cashon Hand B= 403-00 = 000 Working Funds o- 10 = 009 Petty Cash Fund o- = 31 = 000. Revolving Fone 1D = 322-000 = 00 - 000 Cash Fauivalets = -101- 00 - 000 Markatable Securities D402 - 00 = 000 Short term Bonds D403 = 00 + 000 Treasury Sls . 108-00 - 000 others D123 000 - 00 - 000 Notes Receivable = 124-000 - 00. 00 Consumer Accounts ReceNable D = 401 - 00 - 000 Consumer Accounts Receivable Power Bils D = 102 - 00 - 000 Consumer AecountsRacevablee-Reivestment/AFSC D+ =103- 00 - 000 Consumer Accounts Receivables VAT b- = 10 - 000 ‘CAR-VAT-GENCO BS an - 000 CARVATNGCP D+. a2 - 00 CAR-VATOstibution B= —-108- 00 = 000 consumer Accounts RecevablesLIC/ME © = =405 - 00 - 000 Consumer Accounts Receivable ocal Taxes ° = 10 - 000 ‘caR-ranchise . +12 000 CcaR-Business D- - saz. 000 CAR fea Property 1D = 325 - 000 - 00. 00 consumer Accounts Receablettems Under titgation 1 426 - 000 = 00. - 00 other Accounts Recehabies D+ 401 - 00 - G00 Other Accounts Recelvabes-£C D = 402 00: 000 Rents Do - 103 - 00 - 090 Interestand Oivdends D+ 108 = 00 - 900 Advances to Ofcers and Employees © + 405 - 00 - 000 other Accounts Receivables 1B + 127-000 - 00 000 Allowance for Uncolectble Accounts © = =401 - 00 = 000 Allowance for Uncallectible Accounts-Powe Bills ° 302 - 00 - 000 —_Aiowance for Uncolectibie Account Other Racehabes 1D = 428-000 - 00 000 Matera and Supoies D101 - 00 - 060 Materials, Fue, Ci, & Lubricants 1D = 402 = 00 + 060 Matera anc Supplia-ine Construction Materials D = +403 - 00 - 000 tates and Suppies- Special Equipment D+ +408 = 00 - 000 materials ane Suppies- Housewirng D+ -105- 00 = 000 ofteeSupates D+ 106 + a0 = 000 materia anc Supplies others D107 + 00 = 000 store Expense Undisributee 1D = = 108 + 00 - 060 lowanea for Inventory Write Downs. 129 000 = oD - 000 other Curent Assets B= 101 00 - 000 Prepayments D- +. 20 - oo Prepaymentsinsurance D 11 - 00 Other Prepayments D+ -402- 00 - 000 omer current Assets Page 3ACCOUNTING AND COST ALLOCATION MANUAL FOR ECs DETAILED CHART OF ACCOUNTS 200-000 - 00 - aco UABLITIES 1210 - 000 - 00 - 000 Non Current bles + 211 - 000 = 00 - 000 Long Term Loans 201-00 = 000 Long Term Loans-NEA = 10 - 000 {ong Term Loans-NEA- Construction += at 000 tong Term Loare NEA-Rahabilitation +5 az = 00 Long Term Laans-NEA-Expansion + 5 faB + 00 Long Term Loans-NEALogsticl 2. ae | 000 ong Term Loans: NEA Others = +202 = 00 000 Long Term toans-Banks +203 = 00 060 tang Term toant-Other Financial Ineutions + 282 - 000 - 00 - 000 Lang Term Consumers Refund = +201 - 00 - 000 PPARehind = -202- 00 - 000 Over Recoveries Others = 213-000 - 00 - 000 Finance Lease Usbilty += 201 00 - 000 TRANSCO SSKV Lines Payable 202 - 00 - 000 Suppliers 214 - 000 - 00 = 000 Restructured Accounts Payable = =201- 00 = 000 Power Supalers = +202 = 00 = 000 Supliers 5203+ 00 + 000 sai + 215-000 - 00 - 000 Restructored Loans Payable + =201- 00 + 000 NER =202- 00 000 eFC +2203 + 00 | 000 others + 216 - 000 = 00 - 000 Tax rayable +201 - 00 - 000 Real Property Tax = 202 - 00 - 000 ——_Porcentage Taxes =203- 00 - 000 Other Taxes 217 - 000 - 00 - 000 Other Non Curent Uobiltes + = 201 = 00 - 000 Consumers Deposits 10 - 000 ‘Consumers! Deposit: Power Bilt = sn: 000 Consumers’ Deposits: Energy - 5 a2 + 000 Consumers’ Deposts: Meters + 518 + 000 Consumers! Deposits: Iranstormers +5 a4 + 000 Consumers! Deposits: Others +202 - 00 = 000 Revolving Capita Payabie™ +203 00 = 000 Mic Non Curren Labi + 220-000 - 00 - 00 Curent Usbittier + 221-000 = 00 - 000 Notes Payable + 222-000 - 00 = 000 Accounts payable +201 00 - 000 Accounts Payadle-Power Suppliers + +202 = 00 = 000 Accounts Payabie-Tansmision = =203 - 00 - 000 Payableto PSALM- Universal Charges 208+ 00 - 000 Accounts Payabie-ther ECs 205 - 00 - 000 Accounts Payable: Supaiers +206 - 00 - 000 Accounts Payabie-Others 223 - 00 - 00 - 000 Matured Lang Term Lables Curren Portion 5201-00 - 000 Loans Payable 202-00 - 000 Consumers Refunds = =203= 00 = 000 Finance tease Payable + +208 = 00 + 000 Reutrtured Loans +205 = 00 coo Restrutured Accounts 224-000 = 00 = 000 Accrued Tater 201 - 00 + 000 Real Property Taxes + +202 = 00 - 000 Expanded Withholding Tax Payable + +203 = 00 - 000 withnolging Tax Payabe-Fmplovees + +208 00 - 000 ar Payable + +205 = 00 = 000 Accrued Tenes-Others PagesACCOUNTING AND COST ALLOCATION MANUAL FOR ECs DETAILED CHART OF ACCOUNTS. 25 - 000 - 00 = 000 Accrued Interest + 226 - 000 - 00 - 000 Peraites and Surcharges Payable = 227-000 = 00 = 000 Patronage Capital Payabic + 228-000 - 00 - 000 Patronage Refund Payal + 223 000 - 00 - 000 interest on share Capita! Payable + 230 - 000 = 00 - 000 Due 9 Union/Federation (CETE)® + 231-000 = 00 - 000 Consumers Advances for Construction + 232 - 000 = 00 - 000 Mikcilaneous Current and Accrued Liabilities = 201+ 00 - 000 Accrued Rental = +2025 00 + 000 Acerues Payrot = +203- 00 = 000 Accrued Employees’ Leave Crests = +204 = 00 = 000 SS ana Pritheakh Contributions Payable + +205 = 00 = 000 SSS Loans + +206 = 00 = 000 HOME Fund Contributions = +207 = 00 = 000 HOM Loan = =208 + 00 = 000 Accrued Penson + +208 = 00 = 000 Other Current and Accrued Lables + 300 - 000 - 00 000 MEMBERS: EQUITY AND MARGINS + 310 - 000 - 00 - 000 Equity +301 - 00 - 000 Members: Contribution +302 - 00 - 000 Authorized Share Capital + =303 = 00 = 000 Unissued Share Capital® + =304 + 00 = 000 subscribed Share Capital® =305- 00 - 00 Subscription Receivane* +306 00 - 600 Paicilp share caitai® +307 - 00 - 600 Deposit for Share Capita Subscraton® = 308 = 00 - G00 Patronage Caitl + 308 = 20 + 00 Patros’ Capita Credits 308-31 - 000 Patrorage Capital asignable +309 00 - 000 Donated capita +310 00 - 000 Donations and Grants* 5 0 - oot onaced capital PsAune San on Donated Captal- Subsidy from Govt and NGOs 2 - 003 Donates Capta-other Sources + +341 00 = 000 Reinvestment fund fr Sustainable Capex + 3BIB= 00 + 000 Reinvestment 313 = 00 - 000 Contribution In Ad of Construction +314 + 00 - 000 Revaluation Surplus = 320-000 = 00 000 Margins +301 - 00 + 000 Appropriate margins +302 + 00 - 000 Statutory Reserves" - Ff 19: 000. Reserve Fund re er) ‘Coop Education &Teining Fund* = fans 000 Community evelopment Fund™ +s a8 000 Optional Fund + +303 + 00 = 000 Unapproprated Margins = = 10 = 000 Operating Margins ae = 001 ‘Operating Margins Current Yeor oa - 002 Operating Margis- Prior Years + fans on Non Operating Margins oe + 001 Non Operating Margins Current Year -: + 002 Non Operating Margins rior Years, = +304 = 00 = 000 Undivided Net Surpis® + +305 + 00 = 000 Net Losst + 400 - 000 = 00 - 00 REVENUES 1B - 410 - 000 - 00 - 000 Distrbution and Related ActivitesACCOUNTING AND COST ALLOCATION MANUAL FOR ECs DETAILED CHART OF ACCOUNTS D = -401- 00 - 000 ——Passon Generation Carges D+ 402 - 09 + 000 Pass-on Transmission Charges > 403 - 09 = 090 ——_Pasran System Loss Charges D- = 408 90 + 900 Distribution Charges 0-408 = 10 = 000 Residential Stas . 408-11 - 000 Low Vattage Stes D408 = 32 = 000 High Voltage Sates D- -405 = 00 = 000 suoaly Charges D = 406 = 00 = 000 meturing charges D = +407 = 00 - 000 Other Unbundiag Charges D +408 = 09 + 000 TruesUpcharges/Retuna G = 420-000 - 00 - 000 Generation Revenue s 401 - 00 - 000 Goneraton of Eleticty and Provision of Ancilary Services G = —-402- 00 + 000 supply Services G = + 403- 00 - 000 Other Generation Related Revenues + 430 - 000 - 00 - 000 Other Operating Revenues + 440 = 000 - 00 - 000 Non Operating Revenues = 450 - 000 - 000 Donation and Grants Subsidy* (000 - 00 - 000 COSTS AND EXPENSES = S10 - 000 - 00 - 000 Operations and Maintenance Expense = 511-000 - 00 - 000 Purchased Power + +801 00 = 000 Generation Costs == 10 - 000 P + sn 00 west ae 00 Purchased Power Reduction + +802 = 00 - 000 Transmission + 812 = 000 - 00 - 000 Distbution Expenses == S01 = 00 - 000 Operation, Supervision anc Engineering Operation - Load Dispatching Operation - Staton Expenses Operation - Overhead Line Expense Operation street Lighting and Signal System Expense Operation Rents Operation - Miscellaneous Expenses Maintenance: Supervsion and Enginaeing Maintenarce-Stuctures Maintenance Station Equipment Maintenance -Overnead tines Maintenance - Line Transformers Maintanance «Street Ughting and Signal System Maintenance -Miselaneous Pant Supply Expenses Superson and Maintenanco Consumers" Discounts ‘Consumers rompt Payment Discount othr Consumers’ Discounts consumer Records and Colection Expenses Uncolacibie accounts Informational and instructional Advertsing Expenses ‘Consumers/Community Se-veee Expense Housewiring Services \WESM Related Cast and Expenses Miscellaneous Consumers Accounts Expenses Metering Expenser Operation, Supervision and Englnserng Mater Expenses GRGRREERERRESEEEERESERREREEE ssa = 514 veocccocccccccuncceccsesccEcoCoUUTOOS BSSSSSSeEs g BSSSBSSSSSEESSSSSSSSSSSSSRRSSSSKESSSs B PaesACCOUNTING AND COST ALLOCATION MANUAL FOR ECs ‘eprExp-Bulding DeprExp Structures and improvements DeprExp-Station Equipment, DeprExp-Polas, Towers, and Fatures Dep Exp-Overhead Concuctors ane Devices Depr Exp-Undergrouns Conduit/Racaways Depr Exp-nderground Conduit and Devices DETAILED CHART OF ACCOUNTS D = =303- 00 - 000 Meter Reading Expenses 1D = +$08- 00 - 000 Service installation Expenses D505 - 00 = 000 Meter Shoo-Permit& License Fees D = +506 - 00 - 000 Rents D = 507» 00 - 000 Mizcllanecus Exaenses D+ 508-00 - 000 Maintenance-Meters, B= 509 - 00 - 000 Laboratory Fees and Charges G 520-000 - 00 - 000 Power Generation Expenses G - 521-000 - 00 - 000 Operation G = +50 00 - 600 Operation, Supervsan and Engineering = -902- 00-00 Fel 6 503-00 - 000 Rents G = -508- 00 - 000 Miscellannous Generation Expenses G - 522-000 - 00 - 000 Maintenance, G = =501- 00 - 000 Maintenance, Supervision, and Enginderng G = -502- 00 = 000 Maintenance of Structures G = +503 00 - 000 Maintenance of Generating and Electric Equioment © = =508- 00 - coo Maint OF surge ranks, Heacrace,Pensctock, Access Road, Dam G+ -505- 00 - 000 Maintenance of Otner Miscllareaus Pant G 523-000 - 00 - 000 Environment Management G = =501- 00 - 000 Supervision anc Maintenance G+ -302- 00 - 000 Planting Materia and Labor G = +303 90 - 000 Aavocacy and Commurity Relations G = -308- 00 - 000 Monstering 6 = 808 = 00 = 000 System Control ang Load Dispatching + 830 - 000 = 00» 000 Administrative nd General Expenses + +501 = 00 - 000 Administrative and General Salaries + +502 = 00 - 000 office Suapies and Materials + +803 = 00 - 000 Outside Services Employes = +508= 00 = 000 Property Insurance + +505 - 00 = 000 Injuries and Damages + +806 = 00 - 000 Employee Pensions and Benefits + +807 = 00 - 000 Regulatory Fees and Exsenses = +508 = 09 = 000 Scholarship Program Expenses = 509 00 - 000 Rents + +510. 00 - 000 Maintenance of office ane General Plant 2811-00 - 000 Taxerand Ucenses +512 00 - 000 Rea! Property Taxes + =SIB = 00 = 000 Franchise Taxes = +514 = 00 = 000 Business anc Local tax + =515 = 00 = 000 other Taxes = =S16 = 00 - 000 ofcers Wlowances and Benefits + +517 = 00 = 000 Travel + =8B- 00 = 000 Training + +819 + 00 - 000 Azsocation ard Membership Oues + +520 = 00 - 000 Miscellaneous and General Expenses + +521 00 = 000 General Assemiy Meeting Expenses* +522 - 00 - 000 Members! dene Expense* + +823- 00 - 000 Afilation Fe + +824 = 00 = 000 Social Community Service Expense 525 - 00 - 000 Provision for cart = 540-000 - 00 - 000 Depreciation and Amortization Expenses + = 501 = 00 = 000” eptedaton Expenses Ost Utity Plant and Equipment 11 - 000 2 - 00 13 - 000 44 000 15 - 000 16 + 000 17 + 000 Page 7ACCOUNTING AND COST ALLOCATION MANUAL FOR ECs DETAILED CHART OF ACCOUNTS ERSSSSSESSSISSERERSELSLERLRSELEES (Dept Exp Dit. Line Transformers & Creu Rel ‘Dept Exp-Power Conditioning Equipment Dep Exp-Regulsted Enty Prop Cn Cons premises Dep Expt. tight ae Signal Sytem Dep Exp-Submarine Cable System Dep Exp-Servce Oropping Dep Expo's, Metering Equip & Mat. Transl Depr Exp OtfceFuritura& Equinment Depr Exp-Trarsportaton Eaulpment Depr Exp-Tools, Shop, Safety Gadgets, AGarge/Mtep Equip ‘DeprExp-aboretory anc Testing Equipment DeprExp-infrmation Systems & Related Equip Dept Exp-Power Operated equipment ‘Dep Exp-Communication Equipments Depr Exp-Mis, Equipment & Other Assets Dep Exp Elect Pant Purchased Depreciation Expenses Electric lant Held for Futuro Use Depreciation Ex.- Dist Utity Plant and Eauioment-Appraisa! Increase Depreciation Expenses- Generation Pant ‘eprExp-Gen Plant Miniiydra Power Pant Der Exp Structures and Improvements Dep ExpFuel Holders, Prod. Arc Aes, Depr ExpAcoss Ra, Dam, Sige Tanks Der Exp-Acoestory Electr Plant DeprExp-Turbne, Generator, et DeprExp Standby Unt Generator Depr Ex9-Misz Generation Piat & Equipment Depreciation Experse-Generation Plat - Appr Increase Amortization Expense Biologia Assets Amortization Expense Intangible Assets Interest Charnes Interest 0» Short Term ane tong Tetm Debts Other intrest Charges = 000 Other Expenses + 000 Non Operating Expenses o- a eee cetyl eee al peeeeeeaetal De. om Des oO. + le rns o- - l ae ieee eee ° 2B > 2» ° 30 Deo la po os lg pe. as D- + S02 00 D+ 503 - 00 G- -s0a- 00 6. - +40 6. 5 oR 6. - +B 6 4 6. - +a 6-56 6. ln oe fle G- :505- 00 = +506 = 00 ee ger ea. = $80 - 000 - 00 sot - 10 so: aa = 360 - 000 = 00 = 561 - 000 = 00 S01 = 00 St sa2 00 + +03 = 00 + 562 - 000 = 00 = 583 - 000 - 00 aren) © 802 = 09 = 884-000 - 00 = 585 - 000 - 00 Ee oat oa 502 - 00 828 Expenses on Elect Plant Leased to Others Costs and Expensa on Merenandlsing, Jobbing, and Contract Work Experses Non Utity Operations (000 Loss on Disposal of Property 000 impairment toss lrmpatment Loss on Mortality of 64 (Other impairment Lose 200 Non Operating Taxes 1000 Provision fr Income Tax 00 00 Provision for Income Tax Currart Pravson for Income Tax - Deferred PagesACCOUNTING AND COST ALLOCATION MANUAL APPENDIX “B” ALLOCATION FACTORS ‘seeceereoepemenrerrmet een re emeeenteene ACAM for ECsACCOUNTING AND COST ALLOCATION MANUAL FOR ECs [APPENDIX “8° DETAILED CHART OF ACCOUNTS ws. coun [AILOCATION/ASSIGNMIENT. =| 00 | = jocofassers I 1 |=[110| [000] [00] -[oo0|Non Current Aseets ‘2 {- [1311-000] =[ 00 | Joodfoietibution Utility Plant and Equipment ‘0 [-[|-j201{ [00 | -food)oistrbution Utty Plant and Equipment in Service D [f= [20 | food Ttana, tand Rights and Improvements JoIRECT or aloc pa iand area of-[ {far} food ——~Touia'ng [o1aecFr alloc pr tand area o = [22 [food structures and improvements foinécT or toc par land area ofl fy 33 [-]ooq ~~ [station Equipment fos o =| 24 [Joo Totes, Towers, and Fires [atoxate wo 058708 OCS D | 15 | |ooq] overhead Conductors end Devices [locate 0 05 8/OR OCS. o =| 46 [-fooo| [underground Conduits/Raceways Jalocate 1.05 8/08 DCS o =| 37 |-Jooq —~Junderaround Conductors and Devicas Imlocate a 05 2/0R DCS Oo | 38| [00 |ostribution Une Transformers and Circuit Reclosers [tora o 05/08 OCS D =[18 [= Jooq —]Power Conditioning Equiement [atocate to 5 #/08 OCS D cp Regulated Entity Property on Consumers Premier |aocate to D5 8/OR DCS D loou [nstalation an Consumers” Premises a Leased property on Customers Premises o 23 |00q] [Street Lights and Signal system [aocatew 05 E/ORDCS a 22 [000] [Submarine Cae System Inocate to D5 8/0R DCS. 2 = [a3 )- Service Droo Wires & Equipment [Atocate to DS 8/0R DCS Jeustomer dassfcaton w/ eons forme no of cust class per bus o | {-| 24|- Meters, Metering Eqpmt, and Metering Transformers __|scament or RAS D EF} {=f 25 | Joon! Jortice Furniture and €quipment [OECT oF PexaG o =| 26] [000] Frransportation Equipment [ORECT or PAG > =| [- [17 fooa] ~|Toois, shop, Safety Gadgets, and garage/Motorposl EauipmaORECT o PAG o =|} [as [= Joao! ~~ Ttavoratory and Testing Equipment [DIRECT or PexAG 3 yi 23 Informations Systems and and Related Equipment [omect or Penns a = [= [30] -joaol [rower Operated Eeuinment DURECT or PERAG > -} 1-32 Joo! ——Jcornmurication Eauipments [OIECT or FEXAG > =| 32 Ooo] |iscelianeous Equipment and Other Assets [ORECT or PAG 33| [000] ——Jelectic Pant Purchased o [02 - [00 | food] Oistréution Utility Plant and Equipment Not Yet In service of 10 [Construction Work in progress racer ot [Construction Work n progress = By Contract > foca [Construction Work In progress = By Administration > = lo: [Construction Workin progress Special Equipment D =|] a1] food —"|oist Unity lant and Equipment Held For Future Use [ointcrerrexac 0 {| E-[203{ = [00 [- (coq) otstribution Utity Pant and Equipment Appraisal increase JorccT or PEvAG 0 {| |-[:04[ [00 | - food) Accumulated Depreciation ist, Utility Plant and Equipment |saMe aS ASseT LOCATOR. ott 10) Taccum. Dep. Building > =| 13 Joodl Accum. Dep. Structures and Improvements otf 32-000) [Accumulated Depreciation - Station Equipmernt oO =| [3 [food Taceum. Depr, - Poles, Towers, & Fxtures. of 34 | “Jooq Accum. Segr. = Overhead Conductors and Devices of 15 |- 000) [Accum Depr. - Underground Conduit Raceways o =| 36 ooo! Accum. Dep. Underground Conduit and Devices ° =I T= [a7 fooo! —Taccur.Depe. Dist. line Transt and Creu Reclorere > =| 38 [= [oodl [Accum slated Depreciation - Power Conditioning Equipment 2 {TET [| | ooo ~~ [Accum Dear. Regulated Entity Property on Cons! Premises D =| 20 |“Jooq) faccum. Depr.~ Street lights and Signal System D Ho za] [Ooo] accu. Der. - Submarine Cable System > = [22 {loool |accum. Dene.» Service Drop Wires & Equipment > -T- [23 [-Toool Taccurn. Oepr. Meters, Metering Equip, Metering Tanah BT ELT -[2s | 000 faccum Sep. Office Furniture and Equip.ACCOUNTING AND COST ALLOCATION MANUAL FOR ECs APPENDIX “o* DETAILED CHART OF ACCOUNTS two (ace [ALLOCATION ASSIGNIWENT 0000] ~| 66 | ~oool ASSETS I ||) -[660| = [00 -]oG0lWon Curent Assets 1 [- [3231 -[ooo|- [00 | = ooo] seribution Ulity lant and Equipment 1 [-1 [1011 - [00 - ooo] ostrbution ity Plant and Equipment in Service I=] —T] [P20 foo) [teng, tang Rignts nd improvements [bazcT erator pared wea D =[ [Joo —ouiaing [DAECT rato prions area DI 12 | -|000] ——|strectures and inarovemants Det rsx per fond rea PET | fooo) — sation Favipment bs 1 ~[ 1a |=|00q ros, towers, and Fires [aasieto 08 B70ROS [=| F-18000 ——lovernead Conductors ane Devices [Rent to 05 e/0R OCs 1 16 | -|oo0] —uncerareune Condurte/Rarnwa [aiesteto 0s a/0R DCS 0 [=| 1] F-17000 [unserground conductors and Devices [went 005 6/08 OCS fo [-[ [Pas 000) ostreution Une anstormes ang Creu Racoaars [Meat to 05 &/0R OCS 3 39] -]000 Power Conditioning Eavipment Tear 05 &/0R OCS 3 21 [00] |Regusted Enity Property an Consumers Premises (Moen to BS &/08 OCS ott 7 rstalatin on Consumers Premises of: 7 Leases property on Customees Prem oe al [Steer tights ana signal System [Afoawe 1905 ORES of: 22] [ood |svbmarine Cabe System [Aca 1005 /OR OCS ot 23 ISenies Drop Wires & Equipment [Atcae 1905 5/08 OCS focal B zt = [estore cscasen w/ cons lt tre roof cust classperbus oft | | -las|- Meters. Metering Egpmt, ang Metering Transformers seamene oc is © [=] 1] T-fs|- Joon) —— Jorrce Furniture ane Eauiprent DRecTor HAG. © L-[T|-fas] = Joo0) Transportation Eauipment [DRect or Poxas. . -{ [Par | tooo) oo, shoo, Safety Gadgets and garage/Mtarpool EauipmentORECT or EXAG D [EPs ood) ——~Ttaboratory an Testirg Fauipment fonecrer POG o 23] - [600] —|nformations Syitems and and Related Equipment loRECT or PAG oI: 30] [ood] Power Operates Equipment forecrorPoas ae =[31 ooo] ——|communiation Equipments [DRECTor PAG of 32| Joao) “Iytiscelaneous Equipment and Other sets [onecTor Fos 33] food] rect Plant Pursased oy 0a{-| 00 | [ood istration usty Plant and Equipment Nat Yet in service [LETT ft0] food!“ [construction Work in progress loner . eT [constuction Work n progres By Contract OE Hy = [oa [Construction Wore In progress By Adminstration >tH [008 [consiruction Work in progress Speci Lau pment oT =| Jooo] [ois iy Plant ane Eavipment Held For Future Use lpaecrorPoae D [203 [00 | Jooe bistbution vuity Plant and Equipment. Appraisal Increase [pECTor Pa a -|4f =| 00 | food accumulated Oeprecation- Dist. Uililty Plant end Equipment [SAME AS ASSET ALOGATOR OT ET [fo [food Taceum. Dear = Buiding of =[ 11 [Joo [accor Depr.Stuetwres and improvements 3 42] -[00d) ——|Acaumalated Depreciation - Station Eavipmerat D =| FFs [Too [accom Depr. Poles, Towers, & Fotures B= F1T-[ef000) —— [accu Dep. «Overhead Conductors and Dever of-| Fl [-Ps [- [ood accu Depr. Uncerground Conduit/ Raceway ‘of-1 FI [Pas] [ood aceum.Oepr.- Underground Conduit and Devices of] 47} Joo) [Accum Oepr.- Ot. ine Yransf and Creat Relosers [=] F-1 Tf aa [ood] ——|Aceumsiated Depreciation Power Conditioning auipment of] 13] [ood] —JAcsum. Bepr.- Regulated Entity Pranerty on Cons’ Premises D, 720 |= |0o0] Accum. Depr = Street Ughis and Signal System L=LT-t Tat} lo00 [accom ep Sutmarine cable system oT 122-000) Accum. Gepe-Ser/ce Drop wires & Equipment 1D f-| [=f [faa (Joo) Taccum Gepr.- Meters, Metering Equip, Metering Ta 2 F-T EF [2a “Joo accu Dear. Office Forrture and Eau.a o D D . D 3 a 2 D 2 D 2D oy 3 2 D 3D D D [cow cs [Accumulated Amariznion-Bolgical aves intangibe Asets Franchise and Consents JAccumated Amertizatondtangive Asets ‘Accum Depr- Franchise and Consents aise. Non Current Assets [Clesring Aceounts Transporation ol Payroll = Clearing [Vat input capital Goods \Carent Arse [cash [cash s Bark Genera Fore Icesh on Hand [Workng Funas Petty Cah Farad Revovrg Fund ah Eovivalents [Marctable secures [short term Bones Freasur ils lomners Notes Receivable [Consumer Account Recalvabie [Consumer Accounts ReceWvabler Power Be [Eonsimer Accounts ReceWwabler Reinvestment APSE [Consumer Accounts Raceivabes VAT ICARSVAT-GENCO [carevar-ngcr [can-vAT-Ditribution [Consumer Accounts Receivables UGME Consumer Accounts Reesivabler Local Tage can-Franerice CAR Business [can- Real Property [Accounts Receivabes‘ters Under Ligation Other Accounts Reosivables [other Accounts ReeaiabiesC [Rents ineorest and Dwigends [advances to Otfeers and Emplovees [other Aezounts Receivables [Niowance for Ureolectbie Azounts [Alowance fr Uncolectble Accounts Power BIS [Atowance for Uncolectible Accounts- Other Recelvables wateials and Supplies Moterns Fuel 01 & lubreante [oaterials and Suppesine Cosirucion Mate7is Inateras and Supplies Special Equioment [Materia and Suoptes-Housewiing lofice Supotes Moteriais and Supplies Others Store Boense Unaistrbuted [Niowance for Inventory Write Gowns [Other Curent Assets Prepayrnenisinaorance [Other Prepayments [Stier Cuerent Assets TALLOCATION/ASSIGRCAE? [DRECT ar PBS et ates ez ateeton| rec alecation {EAS REVENUE ALLOCATOH IME AS REVENUE LOCATOR IME AS REVENUE ALOCATOR RECT IME AS REVENUE LOCATOR. (AS REVENUE ALGATOR (AEF or PORAS RECT o PAS RECT oF PEXAG RECT oF PEXAG RECT o PEKAG RECT or CXAG RECT 9 PERAG Cron PAE[ALLOCATION7ASSIGRME? {GABLES fon Current Uaioe Term Loans [Long Term oane-NEA Long Term tears NEA: Construction long Term Loans-NEAcRenabiltation Long Term toars-NEAExpansion Long Term Loans NEA-opiscl Long Term Loans NEA Others kong Term toans-Banks Long term Loans Other Financial lations Term Consumers Refund PPA Refund [Over Recoveries thors Finance Lease Uabity alseion HTRANSCO 6SKV Unes Payable [supp Rertructured Accourts Payable Power 6 suppers lesauna Restructure Loana Payable NEA erc sau neal ropertyT@e Percentage Taxes former Taxes [Other Non Current Usbies [Consumers Deposits [Consumers! Deposie Power Consumers” Deposit: Energy Consumers” Dapesis: Meters [consumers Deposits Transformers [consumers Deposits Others evolving CaptalPayabie eaaaion [mis Non Curent tabites reralection [Gurent abies Notes Payabie iret aca [Accounts payable Tarcounts Payable Power Suppers retain [Accounts Payabie Transmission (eaten yao to PSALM Universal Charges alocabon [Accounts Payable-Other Ce re aloeaten| [accounts rayable- Suppliers [Accounts Payabie-Otners aoe istred Long term Usbilties Currant PoRon re aleeabon [loans Payzele [consumers ature Finance Lease Payadia Restructured loans Restrctured Accounts |acersed Taxes Real Property Taree Fxvanced Withaiaing Tax Payable [withholding Tox Payable Employees [vat pavabie [Accrued Taxes Giherscrue terest Penalties ana Surtharges Payable Patronage CaptlPayabie Patronage Refund Payacie® interest on share Captal payaso Due to Union/rederaton(CETF)® [Consumers Advances for Construction [eee atoston iascelianeaut Current and cru pnecron PoaG [cere Renta! IReersesPayrol [Accrued Employees Leave Coda SSS and Phineath Contributions Payable SSS tans NowF Fund Contibutiors HOW Loan [Reeves Pension [otrer Current and Arce Ua [MEMBERS EQUITY AND MARGINS Eau Members Contrnation [Autiorzed Shave capta™ Unissued share Capt” [Subscioe Share Capital™ suaserption Recevaoie™ Paicsp share captarr [Deposit or Share Capital Subscription Patronage Capital Patrons Capita reaie Patronage Capital Assignable [Ganated Captal [Donations ane Grant [Donated Capt. PSALM [Donated Capital Subsiay from Govt and NGOS [Donated Cap ta-Other Sources inestment Fund fer Sustainable Capex (AFSC) investment ntigutiors i AG of Construction alain Surius args [aparopriated margins [Statutory Reserves? Reserve Fund™ [coop €cucation & Taming Fund™ [community Development Fund [Optional rung appropriates wargne [operating Margins ‘Operating Marging Current Year ‘Operating Margins: Prior Years [Ron Operating marpne Non Operating Marine Current Year ‘Non Operating Margins Prior Years eivided Net Surpyse REVENUES Olstibution and Related elves ass-on Generation ChargesJPas-on Tranamisson Charges JPass-on system Loe Charges lisvioution Charges Residential Sales ow Vonage Saies High Voltage Stes [soppy Cnarges Metering Charges [other Unbuncled Charges [rue Up Chergos/Refund (Generation Reverve [Generation of Festa ad Proven of Arclary Services [supply Senices [otner Generation Related Revenues [Other Operating Revenues Non Operating Revenues Donation ne Grants Subsiay™ [COSTS AN EXPENSES [operations and Malntonaree Expense purchased Power [Generation Cone PP wean Purchased Power Reduction [Transmssion fistrbution Expenses [Operaton, Supervision and Engineering [Operation “Loos Disatcring [Operation «Station Expenses [oseration- Overhead Line Expense [Oneration Steet Ugting ard Signal Sytem Expense [Operation Rents [Operation Macelaneuus Expenses [Mairtenance- Supervsion and engineering [Maintenance Structures Maintenance Station Equipment [Maintenance - Overhead lines Maintenance Line Transformers Maintenance = Steet lighting and Signal System [Nairterance- Miscelaneous Part Suey Expenses Supervision and Wartenance Iconsumars”biscounte [Consumers Prompt Payment Discount ther Consumers" Dscounts [consumer Recores and Coietion Expenses [Uncoieeibie Accounts informational an instructional havering apes {consurers/Community Services Exoense Housewreng sence West Related Costs and Expenses [Miselaneous Consumers Accounts Cxpatay Metering Expensce [Operaton, Superson and Eraiectn Meter Expenses Inter Reading iments service instalation Expenses [AWLOcATION/ASSIGN fomecr ans, WARS SOTA [oRECT= ans, WARS SOLRWa [orcT=os@ pcs RECT ARS na, SOUR Wm [RECT nas. NARS SOUR.WA [omECT™ ans. NaRS soLR.Wa [omRECT= Ras, WARS, SOLRWA En DONATED CAPA iret secon ect alocaon VAECT OR RAS ORCUST[ALLOCATION ASSIGNINE Nate Shop Permit & Lanse Fees as ents pas Maintenance Meters ras IMiscolaneous txpensex eas [LSboratory Fees and Charged aes [Power Generation Expenses [Operation [overaton, Supenision and Engineering vel [Rents Misc Toneous Generation Expensee [raineenance Maintenance, Superior, and trginesring Maintenance of stuetures [Maintenance of Generating ana Eecire Fauipmert Maint. OF Surge tanks, Heacace, Pensciock, Access Road, Dame [Maintenance af Other Miselaneous Pant Environment Management [enw [supervision and Maintenance fPianting Materais and tabor [Advocacy and Commusity Rolston IMoritoring [sytem Control and toad Dasatang [Administrative and General Expenses [Acininstratve and General SaaTey fotce Supplies and Mateos [Outside Services Employed Property insurance injuries and Damages Employee Pensions ond Genet Regulatory Fees and Expenses Scholarship Program Expenses a Rents nec [Maintenance af Offee and General Pant SERV Fakes and Dzone od Rea! Property Taxet pay area Taxes Pav uses and Lact Pat tha Tans ART ces Alowancas ana Benefits PAYROLL ravel RECT alain RET ssciaion and Membership Ove aT sce areous and General Expenses AG eneral Assembly Meating Bxpenses™ RECT lerbors! Benefit Expense ner ation Fee REC Cal & Cornnanly Sonica pense? iad revision for CGF RET [Depreciation wenses ag SET ALOCATOR [Depreciation fxpenses- Uy Pant and fquipmaTt [bepe exp-Buling [Dep Exp Structuresand improvements esr Exp Staion Eauipment Door Exp Poles, Towers, and Fotures Deprbxp-Overhead Coneucors and Devens [DcprExp-Undergrcund Concuit/Racew. Dear txp-Underground Condut and Devices Dear Exp-Dst. ine Transformers & Cieut Red. Dep bxp-Power Conditioning Faioment npr Exp-Regulated Entity Prop Ca Cons premises[ALLOGATIONZASSIGNMAENT Dope Bem ght and Signal Sytem [bepe Ex>Submarine Cable Sytem Dep: Exp-Service Dropping [DeprExp-Meters, Metering Fqup. & Met. Tat Depr Exp Office Furniture & Equipment [Dep Exo- Transportation Fquiament [Dep Exo-Toois, Shop, Safety Gadgets AGarge/Mral Equip [DeprExp-taporatry and Testing Equipment DeprExp-information ystems & Related Eau, [Dep Exp-Power Operated equioment [beprExp-Communication Equipments [DeprExp-Misc. Equipment & Other Astute [DeprExp-ntsc. Equipment & Other Astets [Deprecation Expenses letrie Pant Held for Future Use [Depreciation €xo.- Dt. Utity Plant and Equipment Appraisal evans BSE [Desreciation Expenses. Generation Pant 's[s|s]e}islss|ele| a] /a|o [sles [Deo €xp-Gen Plant-Mintyro Power Pant Deprexp- structures an improvements Dep Exp-Fuel Hol6as, Prod. And Ace. Deprbxs-access Rd, Dam, Sige Tanke losprexp-Accessory Electric Plant Dear Exp Turbine, Generator, ee Depr Exp Standby Unit Generator Dep Gxp-Wise Generation lant & Faulpment fe]]>]>/>]@]]@]a[@ [o> sls alee /8/8 (aaa elas ale gieTalgiajalela Depreciation Experse-Generation Plant - Appraisal ncaa [Amortization Expense: Biological Arete [Amortization pense intangible Asets interest charger IDRECT oc FOR RECON Interest on Shot Term and Long Term Deb iglglgigie! [other itorestCrargas =Jo00| other expenses lpaccrow rena onna ung Expenses DmecT On POUG ORR [ood on foe Esporses on Electie Pant Leased to Others [Coss and Expenses on Merchandising Jobbing, and Cartvea Wore Ig [expanses Non Utlty Operations \00]Loss on Disposal of Property fomecr on PSE iment tors fonecr on peTsenv Jocc pai fod) Imosirment tos on Moralty ofA food [Other Impairment tose eee SBIS| ela BIelSIe1 lar Operating Taxes loraev ale 00fProvisien for Income Tak Prison Yor Income Tax Current EE 3{3/8|8/8/8/8/8/8/8/3/a/s|zls/8[8|alslele(s|ale =[od, [Provision fr Income Tax DeferredACCOUNTING AND COST ALLOCATION MANUAL APPENDIX “C” ACCOUNTING SEPARATION STATEMENTS 1jPageACCOUNTING SEPARATION REPORTING FORMATS (ALL BUSINESS SEGMENTS AND RECONCILIATION TO GENERAL PURPOSE FINANCIAL STATEMENTS) ‘The following reporting formats are based on Appendix B of the Business Separation Guidelines, as amended! Total Statement of Income for the year ended. Electrie Power Industry Participant T ‘Operating Proiie | Operating | Prof Before | Interest & | Extraordinary | After Interest Tax Deseripton Revenue | Corts | Taerest | TaxCorte | lems ‘Atraordinary ‘Tax ems ELECTRIC POWER INDUSTRY PARTICIPANT(S) Generation” Generation Services Supply Services Distribation and Related tls Acti Distribution Services Distribution Connection Services Reguited Reta 8 ‘Wholesale Aggregation Services Last Resort Supply Services Non-opulted Retail Servises liminadon of Tnter-company Transactions Tota! RELATED BUSINESSES Total revenues Tatu cons? Elimination of Ener-company ‘Transactions Total as per auited General Purpose Financial Sutemerts ! _Coziplete reach Busines Segiven it the Hise Power Tadusty Group pasa ‘Specified by type of evenue (account heading) ‘Specified by spe of ox (acon heading) Specie by type or category (account heading) 2|Page‘Total Statement of Assets and Lixbilities as at Electric Power Industry Participant Desevipon Total Aste "Toa Cables ‘Nev Assets (Laas) ELECTRIC POWER INDUSTRY PARTICIPANTS) i Generation’ (Generation Series ‘Supply Services Distribution and Related Activtest Disinbution Serves Distribution Connection Serves Regulated Retail Services ‘Wholesle Aggregation Services Last Resoet Supply Services, Noneegulted Retail Services mination of Intercompany ‘Transactions Long term borrowings Provision for defoed tax Provision fer dividends payable Unalloeued dividends receivable Unalfoened intrent payable Unallosted interest receivable Unallocated asetibilitios Tow RELATED BUSINESSES Assas & Liabilities for Related Dasinesss OTHER BUSINESSES Asses & Liabilities for other business Shareholders’ Equity a8 per audied ‘General Purpose Fiaacil Ststemonts “pee Trench Basins Seginen athe Fowaie Tower Indusxy Group gaged “djustmets wil ishude assets and Tiabiltes relating to he business ar whole and which canac be allocated t individ Business Segments Allagjusments shoul be reported by tpe of uation *Gaaloeated assets and labites shouldbe specified individually: These toms wil inchde any asset abies which aut othe business se whole and are therefore not allocated to individual Business Sopments 3|PageACCOUNTING SEPARATION REPORTING FORMATS (GENERATION BUSINESS SEGMENTS) The following reporting formats are based on Appendix C of the Business Separation Guidelines, as amended: Generation, Electric Power Industry Parti ‘Statement of Income for the year ended “Keon Codeor Description Generation Supply reference Millon Pesor Mon Pesos Revente from the sale of electricity and provision of | | asellary services| ! Revenue from the sale of assets ‘her revere (analyzed st approprite) ‘Total Revenue Maintenance (Operating exponss (analyzed as appropits) reaton = Hinrical cos, Depreciation — Appraisal increase "Total operating coats Profi before Interest and ar Ieserest Profi before tat and extraordinary ome Tex Extraordinary Revere ts? Extraordinary Expense em Profit after Interest tay and extraordinary Teme inclodes al segment revenues and expenses which would etherwie be excluded under peagraph 16 of TAS 14 4|PageGeneration, Electric Power Industry Participant. Statement of Assets and Liabil ‘ecount ‘Generation “Sapa Codeor Mion Pesos | Malion Pesos ference NONCURRENT AWSETS (Genezation Pant ~Hsorcal cost Generation Pant — Appraisal increase Accumulated depreistion Generation Dla ‘Accurulned depreciation Generation Pant ~ Apprsss Increase Other non-curentastts “Fetal Now current anes ‘CURRENT ASSETS ‘Cash and cash equivalents Receivables Materials nd supplies (ier eurent asets “Total Carre acts TOTAL ASSETS : ‘NON-CURRENT LIABILITIES Provisions i Loans Otse Non-Carent Liable Total Non-carrent lables ‘CORRENT LIABILITIES ‘Trae payables and acerued expenses Loa Provisions Other Curent Lisbilties “Total Current lables TOTAL LIABILITIES NET ASSETS (LIABILITIES, ang tin Porowings and any tex ibiliis and wanted provibons generally inlodod athe Balance shee Whe General Rrpons Fanci Statements tht pertain to the Electric Power Indusry Group of which the Petrie Power tndusty Parca st member, aad at raat tothe business as a whole, shouldbe exuded ffrn the statement of aes and liabiits for inividualDisness Segrens becuse these tems fla the bunness as « whole and no! to the individual Business Segment. Unallocated items auch as those shoul be inched in the recoation of {Be out statement of sts and ible to those Geaeal Farpore Financial Statements (See Appenix B) studs any provisions that can be alloted to ths particular Business Segmert Provision eft amy stad provisions that ae generally inchide inthe General Purpose Financial Statemerts that pera to the Bless Pose Industy Group of which the Eleceis Power Indy Pacicipant is amenber. As defined in SEAS 1, Presnation of Financial Statements, «provision ily of uncertain ming oe tract sch as provision for wares 5|PageGeneration, Electric Power Industry Participant Cash Flow Statement for the year ended Account codeor Description reference “Generation ‘Maton Pesos ‘Supply ‘salon Pesoe | Cask ows from Operating Activier Net income bsfore ta and entrtordinary dems “Adjustment Tor Seprevation - Historic cost, ‘Adjustmens for derevntion~ Appraisal ‘Aajstmens for foreign exchange los (gain) Investment loss (income) Interest expense (income) “Opering inom Before waking capt charger ‘Decrease! (inereae)niavertoies Increase (dcvase in irae payne Desrease (increase) in rade and other rouivallee as generated om operations Tnerest paid com> tas paid ‘Cath ow before extraordinary Rae Extraordinary gain os ‘Net ash fom (used i) eperting ARS | ‘Cash Flows from Investing Activites “Acauisition of subsidiary Purchase of and snd blinge Interest reosived| Dividends received Porctase of Other Invesiment Actives Sale of Othe Investment Activites Purehase of plant and equipment analyzed as sppropitc) Tet cash used i fem) esting scien (Cash Flows from Financing Actives Proceods rom ieuanes of tock Payment of nance lar lables Dividends pais Proceeds fom Lang Term Debt (amnyzed as appropiate) ‘Net cash used in (va) Fnancing ace ‘Net Ghange in Cach Equivalents ‘Cash and Cash Equivaione at Beginning of Year ‘Cash and Cath Equiv 6|PageGeneration, Electric Power Industry Participan Revenue Schedule for the year ended ezount “Generalfon| ‘Supply ‘cole oF Description Mition Poros | Millon Pesos i inet reverse Revere fo ae of lectriity and ania serve Revene fom he ale of wste ihr revenue (anaes appropri) Total direct revense Inarecty attributable revenue Revenue om the sale of electrcky and ancillary services even fom the tale of asete er revemne analyzed as eppropit) “Total indirectly ateibutabe revene | Unaterbutabte reverie allocated Revenue fom the ale of eocticky and ancilary sricet Revere fom the ale of ase In ation tothe sbove it is manatry to produce for cach revene item that hasbeen allocated to the Business Segment « supporting ‘work paper that ices: (2) theamounts dt have ben indirectly atnbotd othe Business Sepment (@) the amounts ht have ben allocated tothe Busines Segment (©) adessipion ofthe allocation his (©) hemumerc quantity ofeach allocation facto 7\PageGeneration, Electric Power Industry Participant Cost Schedule for the year ended “Recount Seppiy cede or Description Mili Pesos | Millon Pesos reference | Direct coat Maintenance ‘Operating expentes Depeeciaton Historical Cost Depresition — praia Increase (Other cous analyzed a appropriats) “Fail direct conte Indirectly atributable costs Maintenance Opecating expenses (analyzed as appropite) Depreciation -Hiserical Cox Depreciation Appraisal increase “Total indirecty aioe cvs Unattrbutable conte alocsted Maintnaace ‘Operating expense (analyzed as apprepiis) Depreciation -Hiericl Cos Depreciation ~ Appraisal nerease | “Total watribaiabe coats allocated “Tot operating costs Dizecoureoeiony items Indirectly atbutable extraordinary stems UUnateitable extraordinary He allocated ‘Total Extraordinary Kem ‘Nais In ation to the above it is mandatry to prosuce foreach cst tem tha hasbeen allocated tothe Business Segmcit a ‘Supporting work paper that inclaes (©) theamounts that have been ini sttibuted to dhe Business Segment 1) hearts dat have beon allocated tothe Busines Segment (§) a destiption ofthe allocation basis ()——_themumerie quantity of enc alloston factor 8|PageGeneration, Electric Power Industry Participant Inter-segment Transactions Note for the year ended (a) Inter-segmental Revenue recorded in the Statement of Income Teteeace | Baton asin Segment & | Busnes Segment & | Amount | Aina] ‘Acumt deed | Aceon deed ‘coed | Created Pesos] | [ML Pesos (b) Inter-segmental Costs recorded in the Statement of Income Reference] Description TBainess Segment & | Bariness Segment & “Kmmownt | Amount Account debited” | Account debited etited | credited Mia. Pesos |_ [am Pesos] 9|PageACCOUNTING SEPARATION REPORTING FORMATS, (DISTRIBUTION AND RELATED ACTIVITIES BUSINESS SEGMENTS) The following reporting formats are based on Appendix F of the Business Separation Guidelines, as amended: Distribution and Related Activities, Electric Power Industry Participant ‘Statement of Income for the year ended. = a ee cara 1 = a ee ee boone ete an Eee eS Ee senoce Pee A ET nT nto seer | een om epi veri eae poe) fea toca eon Caeroeme ‘Toil Revenue lett charges (paid to Generators) “Transmission id charges WESM fees ‘Operating expenses (analyzed as appropiate) Depreciation - Hisoical co Depeciaton — Appraist Ierense "Total operating a Tro before Terex and tax rofl before tar and extraordinary Heme Tex Exeaordinary Revenue emt! Exraoediaary Espen ems? ‘roti ater Interest tax and otraordinary hema TTacudes all sent ravens ad expeases Which would ohervive be excluded der paragraph T6oTTAS TA 10|Page ¢Distribution & Related Activities, Electric Power Industry Participant, Statement of Assets and Liabilities as at x Tein Ta gas vagr = ce ee eee ees sna owe OE Ge. ah, ERS Gee WE NON-CURRENT ASSETS: a Uiilty Plat and Equipment in Servioe iy Pant and Eqipmeat Not yet in Serve Pant and Equipmen! Held for Future Use Usy plant nd equipment Appraisal increase Accum, Dep = {lity Pant and Eppmen in Service Accu. Depa, -Uslity Platt and Equpaset Held for Future Use ‘Accum Dope.» Uiliy pla and oeuipmont- Appraisal increase Other Property and Investment Rearctod Fund Other non-curret arate “Total Nom current sees CURRENT ASSETS Cash ant cath equivalents | Receivables ‘Materials and sepics Other cure sets Total Current acts TOTAL ASSETS NON-CURRENT LIABILITIES! Prowsions? oan (ier Non Curent Lables “Total Now eurrent abies ‘CURRENT LIABILITIES ‘Trade payables and accrued expenses Loans [Fiotat Current abies TOTAL LIABILITIES ‘NET ASSETS (LIABILITIES * paatang tm borowings and any nx iabilies and standard provisions generally included in the balance shet in the General Purpose Financial Statements that pean to the Electric Power Indisty Group of whieh the Eles Power Industy Partcpant io member, and ft felt othe business asa whole, should be excluded ftom the statement of assets and Hiabilties for individual Business Segments beceure these ‘toms cela to the business as 2 whole and not to the intvidal Business Segments. Unallocated items suchas thee shouldbe inca in the {esoncilistion ofthe os statement of assets a lisbiies to those General Purpose Financial Statements (see Append 8) » ltsindes any provisions at canbe alloted to this particular Busines Segment Provisins refer to any stnderd provisions that are generally included in the General Purpose Finanal Statement thst parain to the Elodie Power ladstty Group of which the Flectic Powe Industry Parcpant is a member, AB defined in SEAS I Presentation of Finacial Salement, a provision isa bly of unsetan ining or amount sucha provision for waraies 1 |Page xXDistribution & Related Activities, Electric Power Industry Participant Cash Flow Statement for the year ended ‘ecount ode or a reference ‘Cash Flows trom Operating Actes Net income before ta and entrardinany items “Adjusiments for dopresstion Historical cos Adjustments fr deproiasion ~ Appia nrease “Adjustment for Foreign exshargs loss” (en) Invest loss coms) Imerest expense (incom) Operating income before working capital charges ‘Decrease (ineretse in rae ander receivables Decrease /(inevease) in nventones Increase (decreas nade payable . Cash geacated fom eperaions Tater paid Income tates paid i Cas flow before xinwdinay Tame Extraordinary gan oss) ‘et cash fom (used in) operating naive ‘Cash Plows from Investing Activities Acquistion of subsidiary Purchase of plan and equipment analyzed as appropiate) Purchase of and and buldinge Interest evived Dividends rcsived Purchase of Other Investment Activites Sal of Other lnvestmont Activation [Ret cash use in (omy investing oc (Cash Flos from Financing Activites ‘Proceed rom ievses of eck Proceeds fom Long Term Debt enayzed ae approprite) Payenet of Finan lace ibis Dyvidends paid ‘Net cash used in (oa) Tancing avi (Net Change in Cask Equivalents Cash and Cash Equivalents at Begining of Yar CCeshand Cash Equivalents at End of Year 12|PageDistribution & Retated Activities, Eleetric Power Industry Participant Revenue Schedule for the year ended count Woe Sg Rad code or poe ove Satis Bata reference | Miicroer ate Fe Mion Pome Dine revenue 2 Revenue fom the reputed services (entszed 8 appropriate) Revenae fom notepad service Revenue fom th al of acts er rvs (a Indirectly atrtbutable revene Revenue fom the sal of electricity and ancillary services even fom the sale of aes ‘Other revenue (sealed as appropriate) ‘Total indirectly attributable revenue ‘Unattrfbutabe revenue allocated Revene fom the sal of laricy and ancillary services Revense fom the sale of asets ter revere (enaly20d 8 appropriate) Total unatributable revenue Total revenue ‘Nate In addon othe above its mandatery to produce for cach revenue iter hat has been alloosted to the Business Sejment «supporting, work paper tat incudes: (©) theamoumts that hve bon indirectly atrbued to the Busines Semen! ©) heamounte that ave been llocred to the Busines Seprant ()——_Sdserption af he llestionbais the namerie quay of ach alloeation factor 13|PageDistribution & Related Activities, Electric Power Industry Participant Cost Schedule forthe year ended oad a ET cir cme cen ee cpm ‘sere laniand Se” ateRome aS SamiePo” STs iePw na Desa VNsiere Opening espeies Dope Ce eas aed opie adie Alrecty attributable costs ‘Operting expenses (enalyzed ae appropriate) Depreciation ‘Total indlrectiyatiribaabe cose Unatributable costs allocated Mairtennce ‘Operating expenses (analyze as appropiate) Depreciation [otal unateibutable coat allocated “Total operating conte Direct exrncedinary items Indirectly atributble extraordinary ems Unatbutabe ereorinay tems allested “Total Extraordinary ems [Nate In addon oth above i is mandatory to paper hints (m=) @ ry co} ‘he amounts that have been indkrectystibutd ote Business Sepment ‘he amos that have boon alloeted othe Business Segment ‘description ofthe allocation basis ‘he numeric quantity ofeach allocation fist rode for cach cot its that has ben allot to the Hines Segment «supporting work 14|PageDistribution & Related Activities, Electric Power Industry Participant Inter-segment Transactions Note for the year ended (@) Inter-segmental Revenue recorded in the Statement of Income [ Beterence | Dessription Dasiness Segment” & | Business Segment & “mount | Amount Account debited | Account debited, debited | credited [stu Pesos] | Pesos (b) Inter-segmental Costs recorded in the Statement of Income Reference | Description TBustness Segment & | Busines Segment & “Kimoant [Ariunt ‘Accom debited | Accum debited aebited | credited [ou Pesos} |_ {ved Peso] I5|Page