REPUBLIC OF THE PHILIPPINES

COMMISSION ON AUDIT
Commonwealth Avenue, Quezon City, Philippines

CIRCULAR No. :   2004-005          

Date :   August 9, 2004 

TO : All Heads of National Government Agencies, Local Government Units and

Government Owned and/or Controlled Corporations; Heads of
Finance/Comptrollership/Financial Management Services, Chief
Accountants/Heads of Accounting Units; COA Assistant Commissioners,
Directors, Auditors; and All Others Concerned

SUBJEC : AMENDMENT TO THE PROVISION OF COA CIRCULAR NO. 2003-007

T DATED DECEMBER 11, 2003 Re: ADJUSTMENTS RESULTING FROM THE
REVISED USEFUL LIFE OF PROPERTY, PLANT AND EQUIPMENT

1.0 This Circular amends Section 5.0 of COA Circular No. 2003-007 dated December 11,
2003 in compliance with the International Accounting Standards No. 16 which states as
follows:

"Paragraph No. 49. The useful life of property, plant and equipment should be reviewed
periodically and if expectations are significantly different from previous estimates,
thedepreciation charge for the current and future periods should be adjusted."
(underscoring supplied)

2.0 Section 5.0 of Circular No. 2003-007 shall be amended and stated as follows:

"Accordingly, any adjustments arising from the revision of the assets’ useful life to
conform with Annex A of COA Circular No. 2003-007 dated December 11, 2003 shall be
charged to the current and subsequent years’ depreciation expense of the particular
asset."

3.0 This Circular shall take effect immediately.