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Financial Reporting Standards. However, the following accounts are peculiar to a Cooperative due to its nature as well as adherence to the Cooperative laws, issued policies, rules and regulations, and cooperative principles and practices. PECULIAR ACCOUNTS: ASSETS BRIEF DEFINITION Cash in Other Cooperative Federation Money deposited in the federations , i.e. savings,current, time deposits, and comboaccount which are unrestricted and readily available when needed. A subsidiary ledger shall be maintained for each account. Receivables from Accountable Officers Total collectibles from shortages and other losses due from accountable officers and and Employees employees that are subject to immediate settlement/sanction PAS NO. 32,39 Investment in Cooperative Federation Investments in secondary / tertiary cooperatives' share capital where the coop. is affiliated. Cooperative Development Cost Expenses incurred prior to the actual operations of the cooperative . Subject to amortization for a period not exceeding 3 years, and impairment. Among others, these costs are: a. Professional fees in connection with the organization;
OUTRIGHT TREATED AS OTHER ASSETS NO AMORTIZED COST COST ONLY TREAT AS RECEIVABLE- CURRENT INVESTMENTS IN NON MARKETABLE EQUITY SECURITIES
PAS/PFRS AFFECTED
DEVIATION
TREATMENT
NO DEVIATION
PAS 32,39
PAS38-INTANGIBLES
PAS REQUIRES
THIS WILL BE
b. registration fees; c. Other cost of services rendered in the formation of the coop. Other Funds and Deposits The fund set aside for funding of reserves (statutory and other reserves) established by the coop such as Retirement, Mutual Benefit and other Funds. This may be in the form of time deposit or other securities which are readily convertible to cash when needed. Liability of the cooperative to its members for interest on share capital, which can be determined only at the end of every accounting period.
EXPENSE
no amortized cost
Liability of the cooperative to its members and patrons for patronage refund, which can be determined only at the end of every accounting period.
no amortized cost treat as trade and other payables, at cost
An amount set aside for the education and training fund of an apex organization, which is 50% of the amount allocated, by the cooperative in accordance with the provision of the cooperative's by-laws and the cooperative code. The apex organization may be either a federation or union of which the cooperative is a member. The deferred payment of interest on share capital and patronage refund whose payment has been withheld, which should be agreed upon in the General Assembly
no amortized cost
no amortized cost
Project SubsidyPayable
Unused portion of the donation/grant for training, salaries and wages, etc.
Funds for special purposes such as member's welfare and benefits, i.e. loan protection, hospitalization, death, scholarship assistance, and, etc. including KBGF/CGF, provisions for accidents not taken from net surplus
The accumulated net surplus of the cooperative that should be allocated and distributed at the end of each accounting period in accordance with Articles 86 and 87 of RA 6938. Used for Interim Financial Statement Presentation only. Amounts received by the cooperative as awards, subsidies, grants, aids, and others. This shall not be available for distribution as interest on share capital and patronage refund,, and shall form part of the Members' Equity of the Statement of Financial Condition IAS 20 Mandatory funds established/set up in accordance with Articles 86 and 87 of the Cooperative Code
DONATIONS/GRANTS
STATUTORY FUNDS
BRIEF DEFINITION Amounts set aside annually for the stability of the cooperative and to meet net losses in its operations (equivalent to at least 10% of net surplus). A corresponding fund should be set up either in the form of time deposit with local banks or government securities. Only the amount in excess of the paid up share capital may be used for the expansion and authorized investment of the cooperative as provided for in its bylaws.
PAS/PFRS AFFECTED
DEVIATION
TREATMENT
FRAMEWORK The amount retained by the cooperative out of the mandatory allocation as stipulated in the cooperative's by-laws. FRAMEWORK Fund set aside from the net surplus (should not exceed 10%) for future use such as land and building, community developments, etc.) FRAMEWORK
EXPENSES
DEMOCRATIC GOVERNANCE COST General Assembly Meeting Members Benefit Affiliation Fee Social & Community Service Provision for CGF (KBGF) Provision for Members' Future Benefits OTHER ITEMS Expenses incurred in providing for additional members' benefits and social services Expenses incurred in the conduct of regular/special general assembly. All expenses incurred for the benefit of the members Amount incurred to cover membership or registration fees and annual dues to a federation or union. Expenses incurred by the cooperatives in its social community involvement including solicitations and donations to charitable institutions. Amount set up for the provisions of CGF (KBGF) amount set up for future benefit of members, such as pensions of members, etc. not taken from Net Surplus.
Project Subsidy
An amount deducted from Project subsidy fund to subsidize project expenses. This shall appear in the statement of operation as a contra account to subsidized project expenses. An amount deducted from Donation and Grant to subsidize depreciation funded by donation and grant.
IAS20
IAS20 Optional Fund Subsidy An amount deducted from Optional Fund to subsidize depreciation funded by Optional Fund and or community development expense. IAS20 Subsidized Project Expenses Portion of the Project Subsidy Fund expended for training, salaries and wages and other activities subsidized by donations and grants. IAS20
Further, the following are the financial reporting presentation and accounting treatments peculiar to the Coooperative set-up: FINANCIAL STATEMENT PREPARATION: FRAMEWORK Presentation of the Financial Statements of a Cooperative in accordance with Cooperative Laws , issued policies, rules and regulations, and cooperative principles and practices, as follows: i. Statement of Financial Condition ( instead of Balance Sheet) ii. Statement of Operations ( instead of Income Statement) iii. Statement of Cash Flows iv. Statement of Changes in Equity - present changes in: a. Share Capital b. Donations/Grants c. Statutory Funds - Reserve Fund - Cooperative Education and Training Fund - Optional Fund v. Notes to Financial Statements CURRENT LIABILITIES Payables peculiar to Cooperatives , to be treated as separate line items: i. Due to Apex Organization ( CETF) ii. Interest on Share Capital and Patronage Refund Payable
ASSETS
BRIEF DEFINITION
PAS/PFRS AFFECTED
DEVIATION
TREATMENT
EQUITY
Presentation of the Members' Equity section for cooperatives will show the following accounts: i. Share Capital ii. Donations/ Grants iii. Statutory Funds Reserve Fund Cooperative Education and Training Fund Optional Fund FRAMEWORK
A Cooperative shall not apply the PAS for income taxes because of its tax exempt nature. However, should the cooperative exceed the limits as set forth in the cooperative code, it will adopt the accounting standards for accounting for income taxes as stated in PAS 19. As a rule, cooperatives adopt the accrual basis of accounting. However, for credit cooperatives, recognition of revenues is on a modified accrual basis; i.e., interest income, fines, penalties and surcharges shall be recognized when earned and actually collected. This is so because only interest income , fines, penalties and surcharges on loans receivable that has been realized (i.e. earned and collected) shall be the basis of the income available for distribution to its members through interest on share capital and patronage refund. Also, due to the cash- based income distribution scheme of a cooperative as well as inherent limitations of small- scale countryside credit cooperatives, it cannot adopt the effective interest method in recognizing interest income on loans receivable.
PAS19
PAS18, 39
NOTES
THIS IS AN ACCOUNT PECULIAR TO COOPERATIVES WHICH SHOULD BE GIVEN AN OPINION AS TO ITS ACCOUNTING TREATMENT, SINCE WE ARE PRESENTING THIS AS A DIFFERENT ITEM FROM ORGANIZATIONAL COSTS.
NOTES
NOTES