DISCUSSION NOTES 01 STEPS-TO-TAKE:

 Definition
Line Item  Recognition / Reporting
In accounting, it’s a practice that separates each  Measurement
category of income and expenses into separate 1) Initial
areas on a balance sheet. Line items are usually
2) Substantial
only used for expense reporting and can show
 Derecognition
comparisons of financial information during
past, present, and future economic periods.  Presentation & Disclosure

Examples of Line Items:

 Cash & Cash Equivalents
 PPE’s
 Inventory
 Trade & other Receivables

Format of Operating Expense (Value/ Amount) –

( Largest Cost  Least Cost )

COST – (less) ACCUMULATED DEPRECIATION

= BOOK VALUE
BORROWING – (less) INTEREST EXPENSE (FINANCE
COST)

Property and Equipment

 Items measured at cost less accumulated
depreciation and any accumulated
impairment losses.
 Cost includes expenditure that in directly
attributable to bringing the asset to the and
condition necessary for it to be capable of
operating in the manner intended by
management.
 These are costs that would have been
avoided if the asset had not been
purchased or constructed.

Examples:
Furnitures & Fixtures --- Php 100,000
Add: Delivery Fee --- Php 5,000
= Initial Measurement

Measurement
1) Initial --- Php 105,000
2) Subsequent --- Cost (Php 105,000)
Less: Accum. Dept. (Php 10,000)
Less: Accum. Imp. Loss (5,000)
= Php 90,000
 CHAPTER 1: Cash and Cash Equivalents

CURRENT ASSET if:

 Expects to realize the asset, or intends to
sell or consume it, in its normal operating
cycle
 Holds assets for the purpose of trading

 To realize asset within 12 months after

reporting period

 The asset is cash or cash equivalent

unless the asset is restricted from being
exchanged

 used to settle for at least 12 months after
the reporting period.

Examples:

CASH; A/R; INVENTORIES; PREPAID

EXPENSES; MARKETABLE EQUITY
SECURITIES; and OFFICE AND STORE
SUPPLIES

CASH
 Money (standard medium of exchange in
business transactions) --- (currency and
coins in circulation and legal tender)

 Includes other negotiable instruments ---

payable in money and acceptable by the
bank for deposit and immediate credit

 Includes Checks; Bank Drafts; and Money

Orders (acceptable by the bank for deposit
and immediate encashment) Except
Postdated Checks (check with a future
date on it. The date can be tomorrow, next
week, or even years from now.)
