CHAPTER 6

FINANCIAL ASSETS

Financial Instrument – any contract that gives rise to both a financial asset of one
entity and a financial liability or equity instrument of another entity.

Financial asset – is any asset that is:

a. Cash;

b. An equity instrument of another entity;

c. A contractual right to receive cash or another financial asset from another entity;

d. A contractual right to exchange financial instruments with another entity under

conditions that are potentially favorable; or

e. A contract that will or may be settled in the entity’s own equity instruments.

Financial liability – is any liability that is;

a. A contractual obligation to deliver cash or another financial asset to another entity;

b. A contractual obligation to exchange financial assets or financial liabilities with

another entity under conditions that are potentially unfavorable to the entity; or

c. A contract that will or may be settled in the entity’s own equity instruments.

Equity instrument – is any contract that evidences a residual interest in the assets of
an entity after deducting all of its liabilities.
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Initial Recognition

A financial asset is recognized when an entity becomes a party to the contractual

provisions of the instrument.

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Initial Measurement

Financial assets are initially measured at fair value plus transactions, except for
financial assets at fair value through surplus or deficit whose transaction costs are
expensed.

Transaction costs are incremental costs that

are directly attributable to the acquisition, issue,
or disposal of a financial instrument.

An increment cost is one that would not have

been incurred if the entity had not acquired,
issued, or disposed the financial instrument.

Transaction costs include: (1) fees and

commissions paid to agents, advisers, brokers
and dealers; (b) levies by regulatory agencies
and security exchanges; and (c) transfer taxes
and duties.

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CASH AND CASH EQUIVALENTS

Cash – comprises cash on hand, cash in bank, and cash treasury accounts.

Adjustment for Unreleased Commercial Checks

Unreleased checks are checks drawn but not yet given to the payees as of the end of
the period. Unreleased checks are reverted back to cash as follows:

Date Cash In Bank, Local Currency- Current XXX

Accounts Payable (or other liability account) XXX

Unreleased checks are not physically cancelled. At the start of the following year, the
adjusting entry above is reversed to recognize the availability of the checks for release.

This procedure does not apply to the “Cash – Modified Disbursement System (MDS)”
account because there is no actual cash with the Government Servicing Bank. Recall
that any unused NCA is reverted back to the National Government, and therefore, the
balance of the Cash – Modified Disbursement System (MDS)” account is zeroed-out at
the end of each period.

Accounting for Cancelled Checks

Checks are cancelled when they become stale, voided or spoiled. A check is
considered stale if it has been outstanding for over 6 months from its date. Cancelled
checks are reverted back to cash as follows:

The cancelled check pertains to current year:

Date Cash – Modified Disbursement System XXX
(MDS), Regular
Accounts Payable (or other liability account) XXX

The cancelled check pertains to prior period:

Date Accumulated Surplus/(Deficit) XXX

Accounts Payable (or other liability account) XXX

For prior period MDS checks, the “Accumulated Surplus/(Deficit” account is debited.
This is because, again, the “Cash – Modified Disbursement System (MDS)” account is
zeroed-out at the end of each period.

For cancelled commercial checks, the “Cash In Bank – Local Currency, Current”
account is debited for both current year and prior period.

If a replacement checks is issued, the replacement check is recorded in the regular

manner, i.e., debit to accounts payable and credit to cash.

Petty Cash Fund

Petty Cash Fund (PCF) refers to the amount granted to duly designated Petty Cash
Fund Custodian for payment of authorized petty or miscellaneous expenses which
cannot be conveniently paid through checks or ADA.

Guidelines:

a. The Head of Agency shall approve the amount of PCF to be established, which shall
be sufficient to defray recurring petty expenses for 1 month.
b. The PCF Custodian shall be properly bonded whenever the established amount of
PCF exceeds P5,000.

“Bonded” means an insurance shall be taken on the custodian. In the event that the custodian misuses
the funds, the entity can claim from the insurance company, and the insurance company in turn will go
after the custodian.

c. The PCF shall be maintained using the Imprest System. At all times, total cash on
hand and unreplenished expenses shall be equal to the PCF ledger balance.

d. PCF payments shall not exceed P15,000 for each transaction, except when
otherwise authorized by law or by the COA. Splitting of transactions to avoid exceeding
the ceiling is prohibited.

e. PCF disbursements shall be supported by properly accomplished and approved Petty

Cash Vouchers, invoices, ORs, or other evidence of disbursements.

f. Replenishments shall be made as soon as disbursements reach at least 75% or as

needed.

g. The unused balance of the PCF shall not be closed at year-end. It shall be closed
only upon the termination, separation, retirement or dismissal of the PCF Custodian,
who in turn shall refund any balance to close his/her cash accountability.

Illustration:
After careful estimates of recurring monthly petty expenses, the Head of Entity A
approves the establishment of a P50,000 petty cash fund.

Date Petty Cash XXX

Cash – Modified Disbursement System XXX
(MDS), Regular

Just like the accounting by business entities, no journal entries are made as
disbursements are made out of the PCF. Journal entries will be made when the PCF is
(a) replenished or (b) adjusted at the end of the period for unreplenished expenses.

A cash count of the PCF reveals the following:

Coins and Currencies 12,500

Vouchers:
Office Supplies Expenses 10,000
Fuel, Oil and Lubricants 15,000
Postage and Courier Expenses 8,000
Other Maintenance and Operating Expenses 4,500 37,500
Total per count 50,000
Accountability 50,000
Shortage (Overage) -
Case 1: The PCF is replenished.

Date Office Supplies Expenses 10,000

Fuel, Oil and Lubricants 15,000
Postage and Courier Expenses 8,000
Other Maintenance and Operating Expenses 4,500
Cash – Modified Disbursement System 37,500
(MDS), Regular

Case 2: The PCF is not replenished.

Date Office Supplies Expenses 10,000
Fuel, Oil and Lubricants 15,000
Postage and Courier Expenses 8,000
Other Maintenance and Operating Expenses 4,500
Petty Cash 37,500

Case 3: The PCF Custodian retires and the PCF is closed.

Date Cash – Collecting Officer 12,500
Petty Cash 12,500

Accounting for Cash Shortage/ Overage of Disbursing Officer

The disbursing officer is liable for any cash shortage while any cash overage that he
cannot satisfactorily explain to the auditor is forfeited in favor of the government.

 Cash shortage
Date Due from Officers and Employees XXX
Advances for/to… (Approriate account) XXX
To recognize cash shortage of disbursing officer

Date Cash – Collecting Officers XXX

Due from Officers and Employees XXX
To recognize restitution of cash shortage
Date Cash – Treasury/ Agency Deposit, Regular XXX
Cash – Collecting Officers XXX
To recognize the remittance of restituted cash
shortage to the BTR

 Cash overage

Date Cash – Collecting Officers XXX

Miscellaneous Income XXX
To recognize forfeiture of cash overage of the
disbursing officer

Date Cash – Treasury/Agency Deposit, Regular XXX

Cash – Collecting Officers XXX
To recognize the remittance of forfeited cash
overage to the BTr

Dishonored Checks

A dishonored checks is a check that is not accepted when presented for payment, e.g.,
a check returned by the bank because of lack of sufficient funds – ‘bounced’ check.

The drawer of the dishonored check is liable for the amount of the check and all
penalties resulting from the dishonor, without prejudice to his criminal liability for a
‘bounced’ check.
Journal entries
Dishonored checks are recorded to the “Other receivables” account as follows:

 Collections remitted to BTr

Current Year Prior Year
Other receivables xx Other receivables xx
Cash-Treasury Agency Accumulated Surplus/
Deposit, Regular xx (Deficit) xx
To recognize the cancellation of current To recognize the cancellation of prior
year’s deposited collections due to year’s deposited collections due to
dishonored checks dishonored checks

 Collections remitted to Authorized Government Depository bank

Current Year Prior Year
Other receivables xx Other receivables xx
Cash in Bank-Local Currency, Cash in Bank-Local Currency,
Current Account xx Current Account xx

Bank Reconciliation

A bank reconciliation statement is a report that is prepared for the purpose of bringing
the balances of cash (a) per records and (b) per bank statement into agreement.

A bank statement is a report issued by a bank which shows the credits and debits to the
depositor’s account during a period, as well as the account’s cumulative balance.

Guidelines:

a. The Chief Accountant or designated staff shall prepare separate bank reconciliations
for each bank account maintained by the entity within 10 days from receipt of the
monthly bank statement.
b. The Adjusted Balance Method shall be used. Under this method, the unadjusted book
and bank balances are brought to an adjusted balance that is reported on the Statement
of Financial Position.

c. Bank reconciliations shall be prepared in 4 copies to be submitted within 20 days

from receipt of bank statement to the following:

 COA Auditor;
 Head of Agency;
 Accounting Division; and
 Bank, if necessary

Cash Equivalents

Cash equivalents – are short-term, highly liquid investments that are readily convertible
to known amounts of cash and which are subject to an insignificant risk of changes in
value.

Only debt instruments acquired within 3 months before their scheduled maturity date
can qualify as cash equivalents.

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RECEIVABLES

Receivables represents claims for cash or other assets from other entities. Examples:

a. Accounts receivable

b. Notes receivable

c. Loans receivable
d. Other receivables, such as, interest receivable; due from employees/officer/ other
NGAs; lease receivables, dividends receivable

Receivables are initially measured at fair value plus transaction costs and
subsequently measured at amortized cost.

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INVESTMENTS

Categories of Financial Assets

a. Financial assets at fair value through surplus or deficit – is one that is either:

a. Held-for-trading; or

b. Designated as at fair value through surplus or deficit on initial recognition. Any

financial asset can be classified in this category if its fair value can be reliably
measured.

Initial Measurement – Fair value

Subsequent Measurement – Fair value; changes in fair value are recognized in

surplus/deficit

b. Held-to-maturity investments – are non-derivative financial assets with fixed or

determinable payments and fixed maturity that an entity has the positive intention and
ability to hold until maturity.
Initial Measurement – fair value plus transaction costs

Subsequent Measurement – Amortized costs (using the effective interest method)

c. Loans and receivables – are non-derivatives financial assets with fixed or

determinable payments and are not quoted in an active market.

Initial Measurement – fair value plus transaction costs

Subsequent Measurement – Amortized costs (using the effective interest method)

d. Available-for-sale financial assets – are non-derivative financial assets that are

designated as available for sale or are not classified under the other categories.

Initial Measurement – fair value plus transaction costs

Subsequent Measurement – Fair value; changes in fair value are recognized in equity

Investments in unquoted equity instruments whose fair value cannot be reliably measured are measured

at cost.

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IMPAIRMENT OF FINANCIAL ASSETS

An entity shall assess at the end of each reporting period whether there is any objective
evidence that a financial asset or group of financial assets is impaired.
If any such evidence exists, the entity shall measure the amount of loss as the
difference between:

 carrying amount of the asset; and

 the present value of estimated future cash flows discounted at the financial
asset’s original effective interest rate.

The carrying amount of the asset shall be reduced either directly or through the use of
an allowance account.

The amount of the loss shall be recognized in surplus or deficit.

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DERECOGNITION OF FINANCIAL ASSETS

Derecognition is the process of removing a previously recognized asset, liability or

equity from the statement of financial position.

A financial asset is derecognized when;

a. The contractual rights to the cash flows from the financial asset expire or are waived;
or

b. The financial asset is transferred and the transfer qualifies for derecognition, such as
when the risks and rewards of ownership and control of the financial assets are
relinquished.
The derecognition of financial assets is subject to the provisions of the State Audit Code
of the Philippines (P.D. No. 1445) on writing off of receivables and other policies issued
by the COA.

CHAPTER 7
INVENTORIES

Inventories are assets:

a. Haeld for sale or distribution in the ordinary course of operations (Finished goods);

b. In the process of production for sale or distribution (Work in process); or

c. In the form of materials or supplies to be consumed in the production process or

distributed in the rendering of services (Raw materials and supplies).

More specifically, the inventories of a government entity consists of the following:

a. Inventory Held for Sale (e.g. medicines for sale in government pharmacies)

b. Inventory Held for Distribution (e.g. rice and other welfare goods held for distribution)

c. Inventory Held for Manufacturing (e.g. raw material, work-in-process)

d. Inventory Held for Consumption (e.g. office supplies inventory)

e. Semi-Expandable Property – consist of machinery, equipment, furniture and fixtures

and similar items that are not capitalized as PPE because their costs are below the
P15,000 capitalization threshold for PPE.
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Measurement

Inventories are initially measured at cost and subsequently measured as follows:

Goods held for sale Goods held for distribution

 Lower of Costs and Net realizable  Lower of Cost and Current
value replacement cost

Cost comprises the following:

a. Purchase cost, excluding trade discounts, rebates, and other similar deductions in
purchase price.

b. Direct costs incurred in bringing the asset to its intended location and condition (e.g.
freight costs, conversion costs – such as costs of labor and production overhead for
manufactured items.)

Costs excludes the following:

a. Abnormal amounts of wasted materials, labor, and production overhead;

b. Selling costs; and

c. Administrative overheads

Net Realizable Value (NRV) is estimated selling price less estimated costs of
completion and estimated setting/disposal costs.
Current replacement cost is the cost the entity would incur to acquire the asset on the
reporting date.

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COST FORMULAS

Cost of goods sold and cost of inventories on hand are determined using the following
cost formulas:

a. Specific identification – this shall be used for items that are not ordinarily
interchangeable (i.e. unique) and those that are segregated for specific projects.

Under this formula, specific costs are attributed to identified items of inventory.
Accordingly, cost of sales represents the actual costs of the specific items sold while
ending inventory represents the actual costs of the specific items on hand.

b. Weighted average cost – this shall be used for large numbers of items of inventory
that are ordinarily interchangeable. This shall be applied under a perpetual inventory
system.

Government entities shall use the perpetual inventory system. Under this system,
purchases, sales, and other transactions affecting inventory are recorded in the
“inventory” and cost of sales” accounts, as appropriate.

However, purchases of supplies and materials out of the petty cash fund for immediate
use or on emergency cases are charged directly as expense.
The FIFO cost formula and the periodic inventory system are not used by government
entities.

Recognition as an Expense

The carrying amount of an inventory is recognized as expense in the period it is sold,

distributed, exchanged, or consumed. The write-down of inventory to its NRV or Current
replacement cost, as appropriate, is also recognized as expense.

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RECEIPT AND DISPOSITION OF INVENTORIES

Receipt

1. End users prepare the Purchase Request (PR) form to request for the purchase of
items not available on stock. The PR is the basis in preparing the Purchase Order.

2. The authorized official prepares the Purchase Order (PO). The PO is a document
issued to the supplier when making a purchase. It indicates the specifications,
quantities, and agreed prices of the items being purchased.

Recall that a canvass from at least 3 suppliers is required for purchases amounting to
P1,000 and above.

3. When the purchased items are delivered, the Property/Supply Division signs the
“received” portion of the Delivery Receipt (DR) and prepares the Inspection and
Acceptance Report (IAR). The IAR will be used by the Property Inspector in inspecting
and accepting the delivered items.

4. The Property Inspector inspect the conformance of the delivered items with the
specification in both the PO and DR and indicates the result of the inspection in the IAR.
Rejected deliveries will be returned to the supplier.

The Property Inspector forwards the copies of DR, IAR, and PO to both the
Property/Supply Division and Accounting Division for recording.

5. The Property/Supply Division, through the Stock Card Keeper, records the accepted
deliveries in the Stock Card (SC). The SC shows the quantities of all receipts and
issuances of inventory, as well as the available balance at any given point of time.

6. The Accounting Division records the accepted deliveries in the books of accounts and
in the Supplies Ledger Card (SLC). The SLC shows both the quantities and monetary
amount of all receipts and issuances of inventory, as well as the available balance at
any given point in time.

As an internal control, the SC (maintained by the Property/Supply Division) and SLC

(maintained by the Accounting Division) are periodically reconciled.

7. The Property/Supply Division prepares the Disbursement Voucher (DV) then

forwards it, together with supporting documents, to the Accounting Division for
processing of payment.
Disposition

8. End users prepare the Requisition and Issue Slip (RIS) to request for the issuance
of items available on stock. The Head of the requesting individual shall approve the RIS.
The approved RIS is then forwarded to the Property/Supply Division.

9. The Property/Supply Division prepares the Report of Supplies and Materials Issued
(RSMI). The RSMI will be used by the Stock Card Keeper in updating the SC and the
Accounting Division in journalizing the items issued.

10. The Accounting Division records the items issued in the books of accounts and
updates the SLC.

11. The following are other documents used in the disposition of inventories:

a. Waste Materials Report – prepared by the Property or Supply Custodian to report

wasted materials, such as destroyed spare parts and other spoilages.

b. Report on the Physical Count of Inventories – used in reporting the results of physical
counts. It shows the balance of inventory, as well as any shortages or overages.

c. Report of Accountability for Accountable Forms – used to report the movement and
status of accountable forms in the possession of an officer.

d. Inventory Custodian Slip – prepared when using semi-expendable property.

CHAPTER 8
 AGRICULTURE

Agriculture means farming or the process of producing crops and raising livestocks. In
this chapter, we will learn the accounting principles used for assets, liabilities, income
and expenses resulting from agricultural activities.

Agricultural Activity – is the management by an entity of the biological transformation

and harvest of biological asset for sale, including exchange or non-exchange
transactions, or for conversion into agricultural produce, or into additional biological
assets.

Examples of agricultural activities include: raising livestocks; forestry; annual or

perennial cropping; cultivating orchards and plantations; floriculture; and aquaculture
(including fish farming)

The following are the common features of agricultural activities:

a. Capability to change – living animals and plants are capable of biological

transformation;

b. Management of change – management facilitates biological transformation by

enhancing, or at least stabilizing, conditions necessary for the process to take place.
Such management distinguishes agricultural activity from other activities. For example,
harvesting from unmanaged sources (such as ocean fishing and deforestation) is not
agricultural activity; and

c. Measurement of change – the change in quality or quantity brough about by

biological transformation or harvest is measured and monitored as a routine
management function.
Biological Transformation – comprises the following processes that cause qualitative or
quantitative changes in a biological asset:

I. Asset changes through:

a. Growth – is an increase in quantity or improvement in quality of an animal or

plant.

b. Procreation – is the creation of additional living animals or plants.

c. Degeneration – is a decrease in the quantity or deterioration in quality of an

animal or plant.

II. Production of agricultural produce.

Biological Asset – is a living animal or plant.

Agricultural Produce – is the harvested product of the entity’s biological asset or the
cessation of a biological asset’s life processes.

Examples:

Biological Assets Agricultural Produce Products that are the

 result of processing
after harvest
Trees in a plantation forest Felled trees Logs, Lumber
Plants Harvested palay Rice
Harvested cane Sugar
Corn Corn flour, Corn Starch
Cotton Thread, Clothing
Dairy cattle Milk Cheese
Sheep Wool Yarn, Carpet
Pigs Carcass Sausages, Cured hams
Bushes Leaf Tea, Cured tobacco
Vines Grapes Wine
Fruit trees Picked fruit Processed fruit

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Recognition

A biological asset or agricultural produce is recognized when it meets the asset

recognition criteria, including the reliable measurement of its fair value or cost.

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Measurement

Biological assets are initially and subsequently measured at fair value less costs to
sell. The gain or loss arising from initial measurement and subsequent changes in fair
value less costs to sell are recognized in surplus or deficit.

Biological assets whose fair value cannot be reliably determined on initial recognition
are initially measured at cost and subsequently measured at cost less accumulated
depreciation and accumulated impairment losses.
Agricultural produce is initially measured at fair value less costs to sell at the point of
harvest. This will be the deemed cost when subsequently measuring the agricultural
produce using the measurement basis for inventories or other basis.

The gain arising from the initial measurement is recognized in surplus or deficit.

 Cost to Sell – are the incremental costs directly attributable to the disposal of an
asset, excluding finance costs and income taxes.

Determination of Fair Value

a. Fair value is determined as follows:

Quoted price in an active market xx

Less: Transport costs (xx)

Fair value xx

 Active Market – is a market in which all the following conditions exist:

a. the items traded in the market are homogenous;
b. willing buyers and sellers can normally be found at any time; and
c. prices are available to the public

 If there are more than one active markets, the entity shall use the price in the
market expected to be used.
  If there is no active market, the entity shall estimate the market price based on
one of the following:
i. The most recent market transaction price, provided that there is no
significant change in economic circumstances between the date of that
transaction and the reporting date;
ii. Market prices for similar assets with adjustments to reflect differences;
iii. Sector benchmarks, such as the value an orchard expressed per export
tray, bushel, or hectare, and the value of cattle expressed per kilogram of
meat; and
iv. Present value of expected net cash flows from the asset discounted at a
current market-determined rate, in circumstances where market-
determined prices or values are not available for a biological asset in its
present condition.

Estimates of cash flows exclude finance costs, taxes and costs of

reestablishing biological assets after harvest (e.g. the cost of replanting
trees in a plantation forest after harvest).

 Contract prices are irrelevant when determining fair value.

 Transport costs refer to all costs necessary in getting the asset to the market for
the sale.

b. The determination of fair value may be facilitated by grouping biological assets or

agricultural produce according to significant attributes, e.g., by age or quality.

c. Cost may sometimes approximate fair value, particularly when:

i. Little biological transformation has taken place since initial cost incurrence (e.g.
seedlings planted immediately prior to reporting date); or
 ii. The impact of the biological transformation on price is not expected to be
material (e.g. the initial growth in a 30-year pine tree plantation production cycle).

d. Biological assets attached to land (e.g. trees in a plantation forest) may not have a
separate market but an active market may exist for the combined assets (i.e., biological
assets, raw land, and land improvements) as a package. In such case, the fair value of
the raw land and land improvements may be deducted from the fair value of the
combined assets to arrive at the fair value of the biological assets.

e. A biological asset that is previously measured at fair value less costs to sell shall be
measured at fair value less costs to sell until it is disposed.

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DISCLOSURES

The following are the peculiar disclosures related to agriculture:

a. The aggregate gain or loss on initial recognition of biological assets and agricultural
produce and from the change in fair value less costs to sell of biological assets.

b. Consumable and Bearer biological assets and biological assets held for sale and held
for distribution at no charge or for a nominal charge.

 Consumable Biological Assets – are those that are to be harvested as

agricultural produce or to be sold or distributed as biological assets.

Examples: livestock intended for production of meat; annual crops like maize and
rice; and trees being grown for lumber.

 Bearer Biological Assets – are those that are self-generating and are used
repeatedly for more than one year.
 Examples: dairy cattle held for the production of milk; fruit trees; and trees from
which firewood is harvested while the tree remains.

c. Mature and immature biological assets

 Mature Biological Assets – are those that have attained harvestable

specifications (for consumable biological assets) or are able to sustain regular
harvests (for bearer biological assets).

d. The amount of change in fair value less costs to sell due to physical changes and
due to price changes.

Illustration 1: Journal entries

a. Entity A purchases five breeding stocks at P3,000 each, equal to the fair value less
costs to sell (FVLCS) at the acquisition date. The journal entry is as follows:
Date Breeding Stocks 15,000
Cash in Bank – Local Currency,
Current Account 15,000

b. Ten breeding stocks are born. The FVLCS on date of birth is P2,000. The journal
entry is as follows:

Date Breeding Stocks 20,000

Gain on Initial Recognition of
Biological Assets 20,000
Illustration 2: (Adapted from GAM for NGAs, Chapter 11, Sec.12)

On January 1, 20x1, Entity A has five 2-year old breeding stocks with total carrying
amount of P25,000.

The following transactions occurred during the period:

a. On July 1, 20x1, ten breeding stocks were born. The FVLCS on this date is P2,000
each.

b. On July 1, 20x1, two 2-year old breeding stocks were purchased for P5,100 each
equal to the FVLCS on this date.

c. On December 31, 20x1, three breeding stocks were born. The FVLCS on this date is
P2,100 each.

The FVLCS on December 31, 20x1 are follows:

Age FVLCS
new P2,100
0.5 yr. old P2,150
2 yrs. old P5,200
2.5 yrs. old P5,400
3 yrs. old P5,700
Requirements: Compute for the change in FVLCS (a) due to price change and (b) due
to physical change.

Requirement (a): Due to Price Change

Formula:

(FVLCS, end. Age beg.) – (FVLCS, beg. Age beg.) x Qty

Asset Group Change in

FVLCS
From beg. ( 2 yrs.; 2 yrs.) (P5,200 – P5,000) x 5 1,000
Born on July 1(0 yr.; 0 yr) (P2,100 – P2,000) x 10 1,000
Purchased on July 1 (2yrs.; (P5,200 – P5,200) x 2 200
2 yrs.)
Born on Dec. 31(0 yr.; 0 yr) (P2,100 – P2,100) x 3 -
Change in FVLCS due to 2,200
Price Change

Requirement (b): Due to Physical Change

Formula:

(FVLCS, end. Age end.) – (FVLCS, end. Age beg.) x Qty + FVLCS of newborn at date
of birth

Asset Group Change in

FVLCS
From beg. ( 3 yrs.; 2 yrs.) (P5,700 – P5,200) x 5 2,500
Born on July 1(0.5 yr.; 0 yr) (P2,150 – P2,100) x 10 500
Purchased on July 1 (3yrs.; (P5,400 – P5,200) x 2 400
2 yrs.)
Born on Dec. 31(0 yr.; 0 yr) (P2,100 – P2,100) x 3 -
FVLCS of new born on (P2,000 x 10) 20,000
July 1
FVLCS of new born on (P2,100 x 3) 6,300
Dec. 31
Change in FVLCS due to 29,700
Price Change