MECHEL ANGELO E.

ESTEBAR
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2021 and 2020

1. GENERAL INFORMATION

The business was organized under the laws of the Republic of the Philippines and duly
registered with the Bureau of Domestic Trade and Bureau of Internal Revenue with
taxpayer’s identification number 107-635-948-000, owned and managed by Mechel
Angelo E. Estebar, with office address of Naguilayan, Binmaley, Pangasinan.

2. BASIS OF PREPARATION AND PRESENTATION OF FINANCIAL STATEMENTS

The financial statements of the Entity have been prepared on under cost and are presented in
Philippine Pesos, which is the Entity’s functional and presentation currency. All values represent
absolute amounts except when otherwise indicated.

Moreover, the financial statements have been prepared in compliance with the Philippine Financial
Reporting Standard (PFRS) for Small and Medium-sized Entities (SMEs) issued by the Philippine
Financial Reporting Standards Council.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these financial statements are set out
below. These policies have been consistently applied to all the years presented, unless otherwise
stated.

3.1 Cash

Cash includes petty cash and cash in bank that are unrestricted and available for current operations,
and this item is measured at face value.

2021 2020
157,22 88,35
Cash In Bank 2 7
157,22 88,35
2 7

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3.2 Property and Equipment

Property and equipment are initially measured at its cost and subsequently measured at cost less any
accumulated depreciation/amortization and any accumulated impairment losses.

The initial cost of property and equipment comprises of its purchase price and any costs directly
attributable to bringing the asset to the location and condition necessary for it to be capable of
operating in the manner intended by management.

ASSETS 01/01/2021 Additions 12/31/2021

Land 300,000.00 300,000.00

Building (Commercial
Space) - 1,200,000.00 1,200,000.00
Total 300,000.00 1,200,000.00 1,500,000.00
Accumulated
Depreciation:
Building (Commercial
Space) - 20,000.00 20,000.00
- 20,000.00 20,000.00
NET BOOK VALUE 300,000.00 1,480,000.00

Estimated Useful Life:

Building 20 years

3.3 Revenue Recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the
Company and the amount of revenue can be measured reliably. Revenue is measured by reference to
the fair value of consideration received or receivable excluding discounts, returns and sales taxes.
Revenue is recognized as follows:

The following specific recognition criteria must also be met before revenue is recognized.

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 Sale of Service
The following specific criteria must be meet before revenue is measured; (a) when the entity has
rendered to the customer the significant risks and rewards of service; (b) the amount of revenue
can be measured reliably; (c) it is probable that the economic benefits associated with the
transaction will flow to the entity and; (d) the costs incurred or to be incurred in respect of the
transaction can be measured reliably

2021 2020
Receipts
109,500 54,000

109,500 54,000

3.4 Cost and expense recognition

Expenses are decreases in economic benefits in the form of decreases in assets or incurrence of
liabilities that result in decreases in equity, other than those relating to distributions to equity
participants. Expenses are generally recognized when the services are received or when the expenses
are incurred.

 Cost of Services
Costs of services are recognized in profit or loss in the period when the services are rendered.

There are no cost of services incurred by the company for the year 2021.

 Administrative Expenses
These are costs incurred by the Entity such as employees’ compensation and other benefits,
export process documentation, transportation, and other costs that cannot be associated directly to
the services rendered such as utilities.

Taxes and Licenses:

2021 2020

Mayor's Permit 29,980.00 3,825.00

Annual Registration 500.00 500.00
Cedula 155.00 125.00
30,635.00 4,450.00

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