1

We now proceed to the 5th component ng fs.

Statement of Comparison of Budget and Actual Amounts

The statement of comparison of budget and actual amounts shows the differences (variances) between
budgeted amounts and actual results for a given reporting period.

Dito sa statement na to makikita yung mga differences or yung tinatawag na variances. Pano makukuha
tong mga difference na to? Pinagkukumpara yung mga budgeted amounts sa mga actual amounts.

Thru this statement, naeenhance daw yung transparency ng financial reporting.

Para mas maintindihan natin kung ano ba talaga tong Statement of Comparison of Budget and Actual
Amounts, let’s define yung mga terms.

A. Budget information – consists of, among others, data on appropriations, allotments, obligations,
revenues and other receipts and disbursements.

- etong budget information na to, nakapaloob yung mga information, based etong budget information
an to sa mga budget registries and it includes the following

Original Budget – is the initially approved budget for the period, usually the GAA

Saan galling original budget? This is from the GAA or the approved budget.

Included dito sa original budget yung mga residual appropriated amounts that are automatically carried
over mula sa mga prior years by law like mga prior year commitments okaya naman mga possible future
liabilities based on a current contractual agreement.

Example neto ay yung not yet due and demandable obligations ng prior year.

Final Budget – is the original budget adjusted for all reserves, carry-over amounts, realignments,
transfers, allocations and other authorized legislative or similar authority changes applicable to the
period.

Itong final budget, it considers all adjustments. When we say adjustment pwedeng realignments,
transfers, allocations and other authorized legislative or similar authority
And dapat yung mga changes from original to final budget explained dapat yan sa notes as well as yung
budgetary basis (either cash or accrual) na ginamit sa pagprepare ng budget information in relation sa
accounting basis na ginamit sa pagprepare ng fs, disclose din sa notes.

B. Actual amounts on a comparable basis – represent the actual disbursements made during the period

Pag sinabi nating actual disbursement, this is the actual cash outflow. Hindi accrual of expenses kundi
mismong outlflow na

Since the ‘actual amounts on a comparable basis’ to the budgeted amounts are on a ‘cash basis’, they
may not be equal to the amounts presented in the financial statements, which are on ‘accrual basis’

Pwedeng yung actual amount mo dito ay hindi yun yung nandon actual expenses na nadon sa statement
of financial performance. Kasi possible na yung expenses mo binili mo na or nagbayad ka na pero hindi
mo pa sya nagagamit.

Ex. Inventory, bumili ka ng inventory. Dito sa statement of comparison of budget and actual amounts,
disbursement mo na kasi nabili mo na pero yung inventory nasa warehouse pa. So statement of fin
position mo, asset pa sya. Hindi pa sya expense, inventory pa sya sa fs mo.

The differences between the ‘actual amounts on a comparable basis’ and amounts presented in the
other components of financial statements are classified as follows:

1. Basis Differences – occur when the approved budget is prepared on a basis other than the accounting
basis

Kaya raw nagkakaron ng differences kasi una, dahil sa basis difference. When the approval is prepared
on a different basis. Papanong different basis? Sa FS naten since they are in accordance with the
standard most of the components of fs ay in accordance sa accrual basis accounting. They are using the
accrual basis, while sa statement na to which is statement of comparison is using cash basis.

2. Timing Differences – occur when the budget period differs from the reporting period reflected in the
financial statement

Ex. Yung subscription mo, yung goivt agency may subscription sa newspaper, yung payment mo for 1
year na tas yung kontrata for 1 year din. Ibig sabihin diba bayad na yung buong taon. Dito sa statement
of comparison, yung bayad mo for 1 year actual disbursement na. Pero sa ibang component ng fs mo,
may portion don na expense at may portion na prepaid kasi di pa natatapos yung service, so may
prepaid asset ka don, tas meron na rin incurred portion or expense portion

3. Entity Differences – occur when the budget omits program or entities that are part of the entity for
which the financial statements are prepared

May mga cases na may mga program na hindi pinapareport sa entity. Sakanya yung budget pero ibang
entity yung nagfafacilitate, ibang entity yung gumagawa pero yung budget nasakanya so magkaiba yung
irereport mo sa ibang component ng fs, iba rin dito sa statement of comparison

EXAMPLE:

Entity A’s appropriation for Capital Outlays for the current year amounts to P1,000,000. During the year,
P50,000 is realigned to personnel services. Actual disbursements during the year totaled P870,000. The
additions to capital assets reflected in the financial statements is P930,000 which is calculated on the
accrual basis.

Original Budget = P1,000,000

Final Budget = P50,000 (P1,000,000 – P950,000)

Actual amounts on a comparable basis = P870,000

Basis Difference = P60,000 (P930,000 – P870,000)

Difference between the final budget and actual amount on comparable basis = P80,000 (P950,000 –
P870,000)

Sa pic,

This statement of comparison of budget and actual amounts, peculiar sya sa government entities. Ibig
sabihin govt lang gumagamit ng gantong statement. Yung mga business entities kasi di sila required na
magprepare na to for the purpose of their external reporting pero pwede naman sila magprepare ng
similar statement pero para lang sa internal reporting nila.

Etong difference or variance na to, hindi sya based sa original kundi, actual less final. Kaya nga difference
final budget and actual

Lahat ng mga differences or variances must be disclosed or explain sa notes.

Parang sa managerial accounting lang yan, all variances whether under or over must be explained or
investigated.
Ganon din dito sa government, dapat iexplain bat naging over or under yung amount na nagastos mo
compared don sa amount na binigay sayo