Income Statement

Common Composition of Income

statement

Heading
Name of the company
Title of the Financial statement
Date of the scope
Revenue
Total sales/Revenue
Reduction to Sales
Cost of sales

2
 Common Composition of Income
statement
Not related

Expenses
Administrative Expenses
Selling expense

Other income and

Expense

Taxes

3
 1

Difference of a company and

Cooperative

4
Subsidies
⊡ Gained by getting subsidized for certain expenses like
depreciation charges or projects
⊡ Came from Funds of the cooperative
⊡ This shall appear in the statement of operation as
contra account to subsidize project expense classified
as revenue account

5
 Difference

Net income Net surplus

⊡ Usually free to use ⊡ Allocated according to the
by laws of the cooperative
or the cooperative code
⊡ Not all free to use

6
Composition of Net surplus

7
Statutory Funds
Consisted of :
Reserve fund
Education and training fund
Community Development Fund
optional fund

8
 Reserve fund

⊡ Not less than 10% of net surplus

⊡ In its starting operation, its allocation should not be
less than 50% than the Net surplus and would persist
until the end of its 5th year of operation

9
 Education and training fund

⊡ Not more than 10% for allocation in net surplus

⊡ Half of the fund can be used for Education and
training purposes, the other half can be used to remit
to a union or federatin chosen by the cooperative or
of which it is a member

10
 Community Development Fund
and optional fund

⊡ Community Development Fund shall not be less than

3% of the net surplus for allocation
⊡ Optional Fund should not be more than 7%
⊡ Both community development fund and optional
fund combined should not exceed 10% of net surplus

11
 Share capital and Patronage
refund

Share Capital Patronage Fund

⊡ Declared by the board of its
interest
⊡ Can consist of preferred and
common share capital
⊡ Not less than 30% of net
surplus after statutory fund
deductions
⊡ Should not be more than
twice the rate of the share
capital
⊡ Declared by the board of its
interest

12
 Sample
Income
Statement

13
References

https://cda.gov.ph/wp-content/uploads/2021/01/natl-forum-phili-fin-
reporting-framework-for-coops.pdf

https://cda.gov.ph/wp-content/uploads/2021/01/2019-04-
08_CEAforum_Revised_Standard_Chart_Accts_FCaingles.pdf

https://cda.gov.ph/memorandum-circulars/mc-2016-06-revised-
standard-chart-of-accounts-for-cooperatives/

https://cda.gov.ph/wp-content/uploads/2021/01/Allocation_-_-
Distribution_-of_-Net_-Surplus.pdf

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