PAS

Volume I 2009
1. Presentation of F/S
2. Inventories
16. Property, Plant & Equipment
18. Revenue
20. Government Grants & Assistance
23. Borrowing Cost
28. Investment in Associates
32. Financial / Instruments
36. Impairment of Assets
37. Contingent Assets & Contingent
Liabilities
38. Intangible Assets
39. Financial Instruments
40. Investment in Property
41. Agriculture

PAS
Volume II- 2009
12. Income Taxes
17. Losses
19. Employee Benefits
20. Accounting Reports & Retirement
Benefit Plans
33. Earnings per Share

PFRS
5. Nonmonetary Assets held for sale &
Discontinued Operation
6. Evaluation of Mineral Resources
7. Financial Instruments
8. Operating Segments

PFRS
2. Share Base Pigment
7. Financial Instruments

Page 1 of 46

PAS
Volume III- 2009
7. Cash flow Statement
8. Changes in Accounting Estimate
10. Events After B/S date
14. Segment Reporting
24. Related Party Disclosure
29. Financial Reporting
34. Reporting

PFRS
5. No-amount Assets held for sale &
P/S continued Operations

Cash Count Sheet

Petty Cash Fund
Balance per Ledger
Less: to take up unreplenished exp.
to take up advances to employees
to take up shortage cash count
Balance as Adjusted

UBERITA: TECHNIQUE
xxx
(xxx)
(xxx)

Receipts:
BO
P

BA
(xxx)

DIT
xxx

C
P

(xxx)

xxx

xxx

CM
Cash Count Sheet
Bills
Fractional Denomination
Total bills & Fractional Denomination
Check to deposit
Unreplenished Vendors
I.O.Us
Total Amount of Fund count
Total Amount of Funds per book
PCF Ledger
xxx
Unclaimed Cash
xxx
Undeposited Check
xxx
Proof:
Bills and Coins
Check for Deposit
Total Cash Counted
Less: Non-fund Items
Unclaimed (fees)
Undeposited Check
Balance for PCF

xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx

xxx

Disbursement:
BO
P

xxx

BA
(xxx)

OC
C
P

xxx
(xxx)

DM
C

xxx
xxx
xxx
xxx
xxx (xxx)
(xxx)

Page 2 of 46

xxx
xxx

xxx

Replenishment
Expenses
Cash in Bank

Cash & Cash Equivalent

Unreleased Check
Cash
A/P

xxx
xxx

Postdated Check Delivered

Cash
xxx
A/P
Checks Long Outstanding
Cash
xxx
Miscellaneous Income
Accounting for Cash Shortage
Cash Short/Over
Cash
Due for Cashier
Cash short /over
Loss from Cash Shortage
Cash Short/Over

xxx

xxx
xxx
xxx
xxx
xxx

Accounts for Cash Change

Cash
xxx
Cash Short/Over
xxx
Cash short /over
xxx
Miscellaneous Income
Cash Short/Over
xxx
Payable to Casher
Input Fund System (Set-up / Establishment)
Petty Cash Fund
xxx
Cash in Bank
xxx

xxx

xxx

xxx
xxx

Adjustment
Expenses
xxx
Petty Cash Fund

xxx

Increase in Fund
Petty Cash Fund
Cash in Bank

xxx

xxx

Decrease in Fund
Cash in Bank
xxx
Petty Cash fund

xxx

Fluctuating Fund System

Set-up / Establishment
Petty Cash Fund
Cash in Bank

xxx

xxx

Payment of Expenses
Expenses
xxx
Petty Cash fund

xxx

Replenishment
Petty Cash fund
Cash in Bank

xxx

xxx

xxx
Decrease in Fund
Cash in Bank
xxx
Petty Cash Fund

Page 3 of 46

xxx

AR Accounts Receivable

Accounting for Bad Debts

Allowance for Freight Change

Allowance for Sales Return
Allowance for Sales Discount
Allowance for Doubtful Accounts

Allowance Method
Direct write-off method

Method of Recording Credit Sales

Gross Method
A/R
xxx
Sales

xxx

Net Method
A/R
Sales

xxx

xxx

Collection at a Discount Period

Cash
xxx
Sales Disc.
xxx
A/R
xxx

Collection at a Discount Period

Cash
xxx
A/R
xxx

Collection not at Discount Period

Cash
xxx
A/R
xxx

Collection not at Discount Period

Cash
xxx
A/R
xxx
Sales Disc. Forfeited xxx
Classified as Other Income

Page 4 of 46

Presentation
A/R
xxx
Allowance D/A
(xxx)
N/R
xxx
Acc. Interest Rec
xxx
Advances to Officers
& employees
xxx
Dividends Rec
xxx
Total Trade & other xxx
receivable

Receivable Financing

Loans Receivable
Principle Amount
Pledge of Accounts Receivable
Organization fees Received
Cash
xxx
from borrower
Discount on N/P
xxx
Direct Org. Income
Notes Payable-Bank xxx
Initial Carrying Amount
of Loan
Assignment of Accounts Receivable
Non-Notification Basis
Notification Basis
Accounts Receivable-Assigned
xxx
A/R Assigned
xxx
Accounts Receivable
xxx
A/R
To record the loan:
Cash
xxx
To record the loan
Notes Payable Bank xxx
Cash
xxx
Service Change
xxx
Payment / Collection of Assets
Note Payable - bank
Cash
xxx
A/R-assigned xxx
Payment / Collection
Payment of Loan
N/P Bank
xxx
Interest
xxx
Cash(Collected Net)

xxx

Page 5 of 46

xxx
xxx
xxx
xxx

xxx

xxx

Loans Receivable
Unnamed Interest Fund
Carrying Value

xxx
(xxx)
xxx

Loans on Impairment
xxx
Accrued Interest Rec. xxx
Allow For long impairment xxx

Factoring
Casual Factoring
Cash
Allow. for D/A
Loss in Factoring
A/R

Discount on Note
Cash
Discount on N/P
N/P Bank

xxx
xxx
xxx
xxx

Factoring as a Continuing Agreement

Cash
xxx
Sales Discount
xxx
Commission
xxx
Receivable from factor xxx
A/R
xxx
Dishonored Notes Receivable
Account Receivable xxx
Notes Receivable
xxx
Interest Income
xxx
Accounting for Note Discounting
with recourse
Cash
xxx
Notes Receivable Discounted xxx
Interest Income
xxx

Cash

without recourse
xxx
Note Receivable
Interest Income

xxx
xxx

Dishonored Notes
(to record payment to first bank)
A/R
xxx
Cash
xxx
(to cancel contingent liability)
A/R
xxx
Cash
xxx
Notes Receivable Discounted
Note Receivable
xxx

xxx

Page 6 of 46

xxx
xxx
xxx

Pledging of A/R
Presentation: (No effect on A/R)
N/P
xxx
Disc. on N/P xxx
Cash
xxx
Assignment of A/R
Presentation:
A/R unassigned
xxx
A/R- assigned
xxx
Allow. D/A
(xxx)
NRV
xxx
Equity in Assigned Accounts
A/R assigned
xxx
Less: N/P to bank
(xxx)
Equity in Assigned
xxx
Asset

Factoring
deduction on A/R even if its done on
w/o recourse or with recourse basis
Discounting of A/R
Net Proceeds
Bank value of the N/R
Less or Given Discount
N/R
N/R discounted
NRV

xxx
(xxx)
xxx

xxx
(xxx)
xxx

Cash
xxx
Interest Exp.
xxx
Liability for N/R discounted
Interest Inc.

Page 7 of 46

xxx
xxx

Discounting on Note
Cash
xxx
Disc. on N/P
xxx
N/P Bank

xxx

Interest Exp.
Disc. on N/P

xxx

xxx

N/P
Face Value of Note
Present Value of Note Rec.
Unnamed interest Inc.
Present Value of N/R
Down Payment
Sales Price / Cash Price
Less:
Cost of Equipment
Gain on loss on Sale

xxx
xxx
xxx
xxx
xxx
xxx

Method of Recording Credit Sales

Gross Method
Net Method
A/R
xxx
A/R
xxx
Sales
xxx
Sales
xxx
Within disc.period
Cash
xxx
Cash
xxx
A/R
xxx
Sales Discount xxx
Cash
xxx
A/R
xxx
A/R
Sales disc. Forfeited
Cash
N/R

xxx
xxx
Equipment
Gain on Sale

xxx
xxx

Page 8 of 46

xxx
xxx

Other income
xxx
xxx

Inventories
Periodic System
Perpetual System
Purchase

Purchases
A/P

xxx

Freight in
Cash

xxx

Freight

Return

A/P
Sales

A/R

xxx
Purchase Return
Sales

xxx

xxx

Merchandise Inventory
A/P

xxx

xxx

Merchandise Inventory
Cash

xxx

A/P

xxx

A/R

xxx

COS
Sales Return

Sales Return
A/R

xxx

Method of Recording Purchases

Gross Method
Purchases
xxx
A/P
Accounts Payable
xxx
Cash
Purchase Discount
A/P
xxx
Cash

xxx

Sales

xxx
Merchandise Inventory

Sales Return
A/R
Merchandise Inventory
COS

xxx

Adjustment ending Inventory

Merchandise inventory-end xxx
Income summary

xxx
Merchandise Inventory

xxx
xxx
xxx
xxx
xxx

xxx
xxx

xxx
xxx

xxx

xxx
xxx
xxx
xxx

Net Method
Purchases
A/P
Account Payable
Cash
Account Payable
Purchase Discount lost
Cash

xxx
xxx

xxx
xxx

xxx
xxx

Page 9 of 46

xxx

Cost Formulas (PAS 2)

1. First in, First out (Periodic & Perpetual)
2. Weighted Average Method
(Periodic, Perpetual, (every purchase) [moving Average])
Accounting for Inventory Writedown (NRV<Cost)
1. Direct Method (CCS)
2. Allowance Method (Accounted Separately)
Inventory 12/31/0xx
xxx
Income Summary
xxx
Loss on Inventory Writedown xxx
Allowance for Inventory writedown
Allowance for Inventory writedown xxx
Reversal of Inventory writedon
(Deduction to CSG)

Purchase Commitment
Loss on Produce Commitment
xxx
Est. Liab for Purchase Commitment
Purchases
xxx
Est. Liab for purchase Commitment xxx
A/P
Purchases
Est. Liab for purchase commitment
A/P
Goin on Purchase Commitment

xxx
xxx

Note: CSG, should be the same method will be use(d)

Page 10 of 46

xxx
xxx
xxx

xxx
xxx

xxx

Inventory Estimation
Gross Profit Method

Retail Inventory Method

Goods Available for Sale

xxx
/

Less: Ending Inventory

(xxx)

Cost
Ratio

Goods Available for Sale at Cost

=
Goods Available for Sale at Selling Price

xxx

Cost of Sales
/

Goods Available for Sale at actual/SP

Less: Net Sales (Gross Sale - Sales Return Only)

xxx
(xxx)

Sales Allowance & Sales Discount (x)

Ending Inventory at SP

xxx

Sales Return ( / [Actual Return of Goods])

Multiply by Cost Ratio

x%
xxx

Ending Inventory at Cost

Based on Cost of
Sales

Mark Up

COGAS at Cost
Less: Ending Inventory at
Cost

Conservative Approach

1 + Mark Up
Cost Ratio

GAS at Cost
GAS at Retail + Net Markdown

Average Approach

Cost Ratio

FIFO

GAS at Cost
GAS at Retail

Net Purchase at Cost

Page 11 of 46

xxx
(xxx)
xxx

Approach

GAS at Retail - Beg. Inventory

Employee Benefits (PAS 19)

Employee benefits are all forms of considerations given
by the entity on employee for service rendered by employees.

a)
b)
c)
d)

B. Postemployment Benefits (Plan)

Are employee benefits, other than termination benefits,
which are payable after completion of employment includes:

Short-term employee benefits

Postemployment benefits
Long-term employee benefits
Terminator benefits

1. Retirement Benefits (Pension)

2. Postemployment Life Insurances
3. Postemployment Medical Care
Postemployment Benefit plan
1. Defined Contribution Plan
2. Defined Benefit Plan (Complex)

A. Short-Term Employee Benefits (12 months after)

1. Short Term Compensated Absences

a) Non-Accumulating Methods
b) Accumulating Method

1. Vesting
2. Non Vesting
2. Profit Sharing and Bonus Plan
Projected Benefit Obligation- based on future salary.
Accumulated Benefit Obligation- based on current salary.

Page 12 of 46

Contributing Plan & Non-Contributing

Noncontributing only employees shoulder all
the retirement benefit cost; Contributing both
at them contribute but not necessarily equal.
Funded & Unfunded
Unfunded the entity returns the obligations
for the payment of retirement benefits
without establishment fund.
Funded sets aside funds fo

 Defined Contribution Plan (fixed contributions)

a) The contribution is definite but the benefit is indefinite.
Actually in this case, the entity makes the contributions to a trustee which administers, manages, and invests the funds.
[Employee bears the investment risks]
Defined Benefit Plan (to provide the agreed benefits employees)
a) The contribution indefinite but the benefit definite.
Actually, in this case, the entity must make contributions such that the contributions plus earnings would be sufficiently large to
cover future retirement benefits.
[thus the entity assumes the investment risks]
Multi-employer Plan (Mixed)
Postemployment benefit plans under the law
a) (SSS) Social Security System
b) R.A.7641
1. ABO Accumulated benefit Obligation
2. PBO Projected Benefit Obligation (PAS 19)
Accounting for defined Contributed Plan
Benefit Expense
Cash

xxx
xxx

Accounting for Defined Benefit Plan (Complex) [Actuarial Assumptions]

Discounted basis (unfunded, funded & partly]
Components of Benefit Expense
1.
2.
3.
4.

Current Service Cost Service Cost

Interest Cost
Expected return on plan assets
Actuarial Gains & Losses is required in accordance with the entitys policy
Page 13 of 46

5. Post Service Cost

beg.
xxx
xxx
contribution unto fund
xxx
xxx
actual return
xxx

end
benefits paid

6. Effect of any containment or settlement

Actuarial Valuation Method (PAS 19 mandated to use
Projected unit credit method)
- Sometimes known as accrued benefit method.

1. Accumulated Benefit Obligation- current salary

2. Projected Benefit Obligation- future salary
Current Service Cost is the increase in the PV of the defined obligation resulting from employee service in the current period.
Interest Cost is the increase during the period in the PV of the defined benefit obligation which arises because the benefits are one period closer to
settlement.
Plan Assets
1.
2.
3.
4.

Held but separate

Pay only employee benefits
Not available to entitys creditor even in bankruptcy
Can be return only if remaining can satisfy all the benefits obligation.
Actual Return
Expanded Return
Actuarial Gain or Loss
FV Plant Assets

xxx
(xxx)
xxx

Pas 19 Vs US GAAP

PAS 19

Additional minimum
Liability
X

US GAAP

Prepaid Pension
With limit
Without limit

Approach Used
Corrigidor and full
recognition
Corrigidor Approach

Page 14 of 46

only

Fair Value of Plan Assets

xxx

Presented as:

Actuarial Loss/Gain (+,-)

xxx

(NCA) Prepaid Benefit Cost

Less: Projected Benefit Obligation

(xxx)

(NCL) Accrued Benefit Cost

Prepaid/Accrued Benefits Cost

xxx

Memorandum records of the entity.

is the item that appears on F/s of the employer entity.

Current Services Cost

Interest Cost
Expected return
Total Benefit Expense

xxx
xxx
(xxx)
xxx

Overfunding
Benefit Expense
Prepaid/Acc. Benefit Cost
Cash

xxx
xxx

Prepaid/Acc. Benefit Expense

Underfunding
Benefit Expense
Cash

xxx

xxx

xxx

Current Service Cost

Interest Cost
Expected Return
Amortization of Past Service Cost
Amortization of Actuarial loss
Page 15 of 46

xxx

xxx
xxx
(xxx)
xxx
xxx

Amortization of Actuarial Gain

Total Benefit Expense

(xxx)
xxx

Projected benefit end

xxx
Benefit Paid
xxx

Actual Return on Plan Assets

Expected Return on Plan Assets
Actuarial Gain/Loss

Projected Benefit Obligation

xxx
xxx
xxx

Beg.
Service Current Cost
Interest

xxx
(xxx)
xxx

- Gain
- Loss

Actuarial Valuation Method or Accrual Benefit Method

Treatment of Actuarial Gain or Losses
a) Corridor Approach (Required by Standard)
FVPA
xxx
PBC
xxx
Compare whichever
is higher
Corridor
Less: Net Cumulative unrecognized
Actuarial gains & losses
Excess Actuarial Gain or Loss
Average [life] service period
Amortization

xxx
10%
xxx
(xxx)
xxx
/ xx
xxx

[Note: this should be

be greater that
10% of corridor.]

Note: if Actuarial gain is deducted to or in compensation benefit expense! To be shown in credit memorandum records. If Actuarial Loss is added to, or in
the computation of the benefit expense! To be shown in a debit memorandum records.
b) Full Recognition Approach
Actuarial Gain or Loss shall be reported as part of the Comprehensive Income.
Actual Return on plan Assets
Less: Expected return

xxx
(xxx)
Page 16 of 46

Actuarial Gain or Loss

xxx

Debit
Unamortized Actuarial loss beg.
Amortization of Actuarial loss/gain
Actuarial Gain Plan Assets
during the year

FVPA more than PBO

Fair value of Plant Assets
Unrecognized Actuarial loss
Unrecognized Actuarial gain
Unrecognized Post Services Cost
Projected benefit Obligation
P/ABC
Unrecognized Actuarial gain
Unrecognized Actuarial losses
Unrecognized Post Service Cost
PV of future refunds & redonations
in future contributions
Total Limit

Credit
xxx
(xxx)

Actuarial Gain beg.

xxx

xxx
xxx
(xxx)
xxx

xxx
(xxx)
xxx

xxx
xxx
xxx
(xxx)
xxx
xxx

net

xxx
xxx

Retirement Benefit Plans (PAS 26)

Deal with the accounting & reporting by the retirement benefit plans.

Page 17 of 46

SHAREHOLDERS EQUITY
Memorandum Method
-

Memo entry

Journal Entry Method

Unissued Share Capital
Authorized share Capital

xxx
xxx

1. Issuance of Share Capital at Discount

Cash
Discount on Share Capital
Share Capital

xxx
xxx

deduction on SHE!
xxx

2. Issuance of Share Capital for Non-Cash Consideration

Land

xxx
Ordinary Share Capital
Share Premium

xxx
xxx

3. For Services
Legal Expenses

xxx
Page 18 of 46

Ordinary Share Capital

Share Premium

xxx
xxx

Delinquent Subscription
Subscription Receivable
Subscribe Share Capital

xxx

Cash

xxx

xxx

Subscription Receivable

xxx

Defaults (NO ENTRY)

Advances on Delinquency Sale
Cash
Highest Bidder
Cash/TS
Subscription Receivable
Interest Income
Advances on Delinquency Sale
Subscribed Share Capital
Share Capital

xxx
xxx

xxx
xxx
xxx
xxx
xxx
xxx

CALLABLE PREFERENCE SHARE

Issuance:
Cash

xxx
Preference Share
Share Premium-Preference Share

Redemption:
Preference Share

xxx
xxx

xxx
Page 19 of 46

Share premium-Preference Share

Retained Earnings
Cash

xxx
xxx
xxx

Cost exceeds Par Value

1. APIC
2. R.E

CONVERTIBLE PREFERENCE SHARE

CASE 1
P/S-C
S/P-P/S

xxx
xxx
OS-C
Share Premium

CASE 2
P/S-C
S/P-P/S
R.E

xxx
xxx

xxx
xxx
xxx
O/S

xxx

Rights Issue Stock Right

- Memo Entry

Page 20 of 46

SHARE WARRANT ISSUED WITH PREFERENCE SHARE

Allocation to their MV
Cash
P/S-C
S/P-P/S
Share Warrants Outstanding
Cash
Share Warrants Outstanding
O/S-C
S/P
No MV:
MV of O/S
Less: Option Price
Intrinsic Value of Warrant
Multiply no. share Claimable
Total Value of Warrants

xxx
xxx
xxx
xxx

SHARE WARRANTS ISSUED WITH BONDS PAYABLE

xxx
xxx

Cash
Discount on B/P
B/P
Share Warrants Outstanding

xxx
xxx

xxx
(xxx)
xxx
*xxx

Exercise:
Cash
Share Warrants Outstanding
O/S-Capital
Share Premium

xxx

TREASURY SHARES
(What is prohibited to be done directly cannot be done by indirection.)
Accounting for Treasury Shares
T/S

xxx
Cash

xxx

At Cost:
Page 21 of 46

xxx
xxx
xxx
xxx

xxx
xxx
xxx
xxx

Cash

xxx
T/S

At More Cost:
Cash
T/S
S/P-T/S
At Below Cost:
Cash
S/P-T/S
R.E
T/S

xxx

xxx
xxx
xxx

xxx
xxx
xxx
xxx

Retirement of Treasury Shares

O/S-Capital
T/S
S/P-T/S

xxx
xxx
xxx

Cost of T/S exceeds the Par Value

1. APIC
2. APIC-T/S
3. R.E

Page 22 of 46

[DONATED SHARES]
Memo Entry Only
Reissuance
Cash
Donated Capital
Cash

xxx
xxx
xxx

Land
Donated Capital

xxx
xxx

Fractional Stock Dividend

R.E

xxx
Stock Dividends Payable

xxx

Share Premium
Stock Dividends Payable

xxx

R.E

xxx
Stock Dividends Payable

Stock Dividends Payable

Share Capital
Fractional Warrants Outstanding
Treasury Shares as Stock Dividend
R.E

is illegal
xxx

xxx
xxx
xxx
xxx

xxx
Stock Dividend Payable

xxx

Page 23 of 46

 Stock Dividend Payable

Treasury Shares

xxx
xxx

QUASI-REORGANIZATION (Free-Start)

1. Recapitalization (Share Premium)

2. Revaluation of PPE (Revaluation Surplus)
Thru recapitalization R.E (deficit)
Equity Settled Option - OSOO
SHARE BASE Compensation
Cash Settled Share Agreement Right Liability
FV of the date of Grant
OSSO
Cash Settled
Intrinsic Value=Option or Strike Price MV of Share

Contributed Capital
SHE

SC
APR/SP

Unissued/Unrealized (OCI)
Earned Realized Capital

RS
UG/UL AFS
FC G/C
AG/AL- Corridor Approach
G/L Cash flow Hedge

Transported

Page 24 of 46

positive

SHARE BASED COMPENSATION (PFRS 2)

1.
2.
3.
4.

I.

Equity Settled (Share Options)

Cash Settled (Share Appreciation Rights)
How is the compensation measured?
When is the compensation recognized?

Share Options
1. Fair Value Method (PFRS 2)
2. Intrinsic Value Method (MV vs. OP)
Recognition
Shares- Share Options
Share Options Outstanding
Cash
Share Options Outstanding
O/S- Capital
Share Premium

xxx
xxx
xxx
xxx
xxx
xxx

Intrinsic Value Method

No Vesting period
With Vesting Period
Some employees left
With condition & Share options vary
With condition & exercise price varies
Note: Intrinsic Value Method any difference or increase in intrinsic value period is recognized as additional compensation immediately. (P/L)

Page 25 of 46

II.

Cash Settled Transaction (Grant of Share Appreciation Rights)

(Fair Value of the Liability)
Recognition (P/C)
Salaries
Accrued Salaries Payable
Accrued Salaries Payable
Cash

xxx
xxx
xxx
xxx

Query: MV=FF or PV
Accrued Salaries
xxx
Gain on reversal of Share Appreciation Right

xxx

Note: The Predetermined price is the MV of share at the date of grant.

Acceleration of Vesting cancelation or settlement as on acceleration of vesting!

a) The entity shall recognized immediately the compensation expense that otherwise would have been recognized for services received over the
remainder of the vesting period. (Usual)
b) Any made to payment to the employee on the cancellation or settlement of the grant shall be accounted for as the repurchase of equity
interest. (deduction from equity; excess of payment is expense)
Share Options Outstanding
xxx
Salaries
xxx
Page 26 of 46

Cash

xxx

Cash & Share Alternative(to settle!)

1. Cash Alternative cash payment is equal to market value of contain numbers of shares subject to certain condition.
2. Share Alternative- equity share given to employee.
Choice of Settlement Account
1. Entity Not compound instrument
2. Employee - Compound financial instrument ( partly cash-liab, & partly share-equity Residual Amount).
Note:
F.V of the share alternative

xxx

F.V of the Liability Component or grant date

(xxx)

Equity Component

xxx

Financial Accounting- The method chosen by the [companys] employee

will determine the financial accounting.

Share Premium

xx

2. Equity Alternative
Accrued Salaries Payable xx
Share Options Outstanding xx
Share Capital
Share Premium

1. Cash Alternative
Accrued Salaries Payable xx
Share Options Outstanding xx
Cash

xx
Page 27 of 46

xx
xx

Cash Payment xx
FV of Liability (xx)
Implied Interest xx

Purchase of Equipment
1. Fair value of asset received
Less: Fair Value of Equipment
Equity Component

3. Share Alternative
Accounts Payable
xx
Share Options Outstanding
xx
Share Capital
Share Premium

xx
xx

Book Value per Share

xxx
(xxx)
xxx

1. Equipment
xx
Accounts Payable
xx
Share Options Outstanding
xx
2. Cash Alternative
Accounts Payable
xx
Share Options Outstanding
xx
Interest Expense
xx
Cash
Share Premium

Book Value per Share = Total Shareholders Equity

No. of Shares Outstanding
Book Value per =
Preference Share

Preference Shareholders Equity

No. of Preference Share Outstanding

Book Value per =

Ordinary Share

Ordinary Shareholders Equity

No. of Ordinary Shares Outstanding

Note:
xx
xx

1. Preference Share is assumed to be Non-cumulative &

Non-Participating.

Page 28 of 46

2. Dividends in arrears in prior years shall be specifically

disclosed.

Shares Outstanding

xxx

Shares Outstanding
Share Capital Issued
xxx
Add: Subscribed Share Capital
xxx
Total
xxx
Less: Treasury Shares at Par
(xxx)
Case 1. Preference Share is Non-cumulative & Non-Participating

Excess over Par

Balances
xxx
Preferred Dividend (xxx)
Balances to Common xxx
Total SHE
Divided by Shares
Outstanding
Book Value per Share

Preference
xxx
xxx
____
xxx

xxx
P xxx

Ordinary
xxx
____
xxx
xxx

xxx
P xxx

Case 2. Preference Share is Cumulative & Non-Participating

Excess over Par

Balance
xxx
Preference Dividend
(Dividend x no. of yrs.) (xxx)
Balances to Common
xxx
Total SHE
Divided by Shares
Outstanding
Book Value per Share

Page 29 of 46

Preference
xxx

Ordinary
xxx

xxx
____
xxx

xxx
xxx

xxx
P xxx

xxx
P xxx

Case 3. Preference Share is Cumulative & Participating

Ratio
Case 4. Preference Share is Cumulative & Participating up to
specified rate!

Ratio!!
Excess over Par
xxx

Balances
Preference Dividend
(Dividend x no. of yrs.)
(xxx)
Ordinary Dividend
(Preferred rate% x CS)
(xxx)
Balance for Participation xxx
Preference (Ratio x B for P)
Ordinary (Ratio x B for P)
Total Shareholders Equity
Divided by Shares Outstanding
Book Value per Share

Preference Ordinary
xxx
xxx
Balances
Preference
*Ordinary

xxx

Excess over Par

xxx
(xxx)
(xxx)

Preference
xxx
xxx

Ordinary
xxx
xxx

xxx
Balance for Participation
xxx
_____
xxx
xxx
P xxx

xxx

Preference (Ratio% x PS)

Ordinary (Balance to CS)
Total Shareholders Equity
Divided by Shares Outstanding
Book Value per Share

xxx
xxx
xxx
P xxx

xxx
____
xxx
xxx
P xxx

xxx
xxx
xxx
P xxx

Note: Ratios are developed from the aggregate par value of share capital.
Liquidation Premium
Cases: Preference Share is Cumulative, Non-Participating, & with
liquidation value per share.
Page 30 of 46

Illustration no. 3
Case 2. Preference Share & as preference as to Dividends

Case 1. Preference share has preference as to assets.

(Dividend in arrears are fully payable)

Balances
Preferred Dividend
Balances to Common
Total SHE
Divided by Shares
Outstanding
Book Value per Share

Excess over Par Preference Ordinary

(xxx)
xxx
xxx
(xxx)
(xxx)

xxx
____
xxx

xxx
P

(xxx)
xxx

xxx
xxx

Balances
Share in Deficit
Preference (Ratio)
Ordinary (Ratio)
Total SHE
Divided by Shares
Outstanding
Book Value per Share

Page 31 of 46

Excess over Par

(xxx)
xxx
xxx

Preference Ordinary
xxx
xxx
(xxx)
____
xxx

(xxx)
xxx

xxx
P xxx

xxx
P xxx
P

xxx

a.

*EARNINGS PER SHARE* PAS 33

1. Basic Earnings per Share
2. Diluted Earnings per Share
Uses of EPS
1. Determinant of MP of OS indicating the alternatives of
the OS as investment.
2. Measures of Performance of management.
3. Basis of dividend policy.

Date
Monthly
xx
xx
xx

Shares
xxx
xxx
xxx

b.
Months Outstanding
xx
xx
xx

Average Share Outstanding (xxx /12)

(a x b)
Peso
xxx
xxx
xxx
xxx

xxx

Example Potential O/S

1. For liability or equity instrument, including preference
shares that are convertible into ordinary share.
2. Share warrants
3. Share Options
4. Shares which would be issued

Stock Dividend & Split shall be recognized retroactively or split

shall be (recognized) treated as a change from the date the original
shares were issued.
Note:

*Basic Earnings per Share*

Net Income is equal to the amount after deducting

dividends on preference share.
Cumulative P/S = Preference for the current year.
Noncumulative P/S = Preference for the current year if
there is declaration.
If there is a significant change in O/S capital alternative
the year the weighted average O/S Outstanding during the
period should be used as denominator.

Basic EPS = Net Income

Ordinary Shares Outstanding

Page 32 of 46

Note: If Convertible bond payable is outstanding during the entire year

it is assumed that the conversion take place at the beginning of the
year.

Diluted EPS
2 Major Types of Potential Ordinary Shares
1. Convertible Bond Payable & Convertible Preference
Share
2. Share options and Warrants (Only when dilutive)

2. Convertible Preference Share

1. Convertible Bond Payable

Net Income
xxx
O/S actually outstanding
xxx
Assumed Issued O/S through
conversion of P/S
xxx
Diluted EPS
P xxx

Net Income
xxx
Add: Interest Expense on BP xxx
[Less] Income Tax (% x xx)
(xxx) xxx
Adjusted NI
xxx
Ordinary Share Actually
Outstanding
xxx
Assumed Issued O/S
xxx
Total O/S
xxx
Diluted EPS
(NI/OS)
P xxx

Note: Net Income is not deducted by any dividend for

the reason that the preferred share will exercise its privilege of
conversion.

Note: Options and Warrants are dilutive if:

Exercise Price/Option Price < Average Market Price of OS.
PAS 33

Page 33 of 46

Options and Warrants

Basic EPS
Net Income
xxx
Divided by WACSO xxx
Basic EPS
Pxxx

Note: If the Exercise of Options and Warrants is done in the

current year it is average (through) multiplying the
incremental shares by average of the incremental share from
the beginning of the year to the exercise date.

Diluted EPS
OS Actually Outstanding
xxx
Incremental OSC
Option Share
xxx
Less: Assumed Treasury Share (xxx) xxx
Total Ordinary Shares
Pxxx

Net loss = if both all the rights of the holder are present (potential
rights) should always be rank or consider the ranking when can equity
diluted EPS:
CBF = Net Interest of tax
Shares Equivalent

Note: if not whole year it should be multiplied by a ratio on what

month it was held and assumed options were exercised
Option Price
Fair Value of Stock Option
Total Option Price

CPS = Dividend Amount

Share Equivalent

xxx
xxx
xxx

Option Shares
Multiply by
Total Option Price
Proceeds from Assumed Exercise
Option
Divide by average MP
Assumed Treasury Shares

O
OS & WC = ______________________
Assumed Share Equivalent

xxx

Options, Shares and Warrants Outstanding is always of rank off if it is

considered as dilutive!

xxx

Dilutive if: Exercise OP < Average MP

xxx
xxx
xxx

Page 34 of 46

Operating Lease
LESSOR
Rent Income

LESSEE
Rent Expense

Lease Balances
(Amortized over the
Term)

Unearned Income

Prepaid Rent
Expense

Initial Direct Cost

(Paid by lesser)
Rent Deposit

Deferred Initial
Direct Cost
Liability

Depn / Asset Cost

Payment of Rent

Collection of Rentals
xxx
Amortization of LB
xxx
Amortization of deferred IDC ( xxx)
Depn of lease Property
(xxx)
Other Cost
(xxx)
Net Revenue from lease
xxx

Asset

Payment of Rentals
Amortization of LB

Net Rent Expense

xxx
xxx

_____
xxx

Page 35 of 46

LESSOR

LESSEE

Cash
xxx
Rent Income
xxx

Rent Expense
Cash

xxx
xxx

Lessor

Lessee

1. Lease Bonus

Unearned Income

Pre Payments

2. Contingent Rent

Income When Earned

Expense when
Incurred

3. Uneven Rental Income!!!

Payment
TotalPayments/
(Collection) Rent
Collections
Holiday
Lease Term

Expense!!!
TotalPayments/
Collections
Lease Term

4. Leasehold
Impairment

PPE (Depn)

5. DirectLease
Expense

1. Outright Expense
2. Capitalized + CV
Offers leased
asset Amortized
over the leased
form

Shorter
Remaining Term
Life of Asset

Page 36 of 46

Sale and Lease Back Operating Lease

Book of Seller Lessee
1. Cash
xxx
Acc. Depn xxx
Machinery
Gain on Sale
leaseback
2. Payment of Rental- Lessee 2. Rent Expense
Cash

Book Buyer Lessor

1. Record the Sale

3. Depn of Lease/Sold
Property

3.

1. Machinery
Cash

xxx

2. Cash
Rent Income

xxx

3. Depreciation
Acc. Depn

xxx

xxx

xxx
xxx
xxx
xxx

--

Page 37 of 46

xxx

xxx

*Sale & Lease Book Finance Lease*

Book of Buyer-Lesser

Book of Seller Lessee

1. Record the Sale

Cash
xxx
Acc. Depn
xxx
Equipment
Deferred Gain

2. Record the Leaseback

Finance Lease

Equipment
xxx
Lease Liability

3. First Rental Payment

Interest Expense
Lease Liability
Cash

xxx
xxx

Depn

xxx

4. Depreciation

xxx
xxx

xxx
xxx

xxx

Lease Receivable
xxx
Equipment
Unearned Interest Income
Cash

xxx
Lease Receivable

xxx
xxx

xxx

xxx

Acc. Depn
5. Amortization of Deferred
Gain

Equipment
Cash

Deferred Gain
xxx
Gain on Sale &
leaseback
6. Reduction of Interest Income
--

-xxx
-xxx
Unearned Interest Income
Interest Income
Page 38 of 46

xxx
xxx

Sale Type Lease

GUARANTEED
Lease Receivable
xxx
CCS
xxx
Sale
Unearned Interest Income
Inventory
Initial Direct Cost
Cash

xxx
xxx
xxx

xxx

UNGUARANTEED
xxx
Loans Receivable
xxx
COS
xxx
Sale
Unearned Interest Income
Initial Direct Cost
Cash

xxx
xxx

xxx
xxx

LESSEE:
Asset ( lower FMV/PV of MLP!!)
Page 39 of 46

xxx

LT Lease Liability
Cash (if in advance)

Depn

xxx
xxx

Interest Expense (CV x effective Rate %)xxx

Lease Liability(Balancing Figure)
xxx
Cash
xxx

xxx
Acc. Depn

NOTE:

xxx

Depreciable Cost
__________________________
Term/Life of the Asset of the Lease

Note Payable and Debt Restructure

Debt Restructuring

Gain or Loss on Extinguishment of Liability

Carrying Value of the Old Liability Cost of the Asset [not the FV]

1. Asset Swap

2. Equity Swap

SP

Carrying Value of the Old Liability Par value of the issued shares

3. Modification of Terms

Carrying Value of the Old Liability PV of the new Liability

Recognition of Liability (PAS 39)

Share Premium

Substantial Modification of Terms if

the gain or loss is 10% or more of
the carrying amount of the liability.

Asset Swap (US GAAP)

1. Gain/Loss= Settlement

2. Gain/Loss= Disposal

Equity Swap
FMV of Asset xxx
CV of Oblig. (xxx)
Gain/Loss
xxx
on Sale
FMV of Asset xxx
CV of Asset (xxx)

Modification of Terms (Note: US GAAP not

discounted!!!)

1. Conversion of Securities
(NO GAIN/LOSS TO RECOGNIZE)
2. Extinguishment of Liabilities (Debt)
FMV of Securities xxx
CV of Liability
(xxx)
Page 40 of 46

PV of the New Cash Flow

(Original Effective Rate)
CV of the Note + Interest
Gain/Loss
Less: Transaction Costs
Net Gain/Loss

xxx
(xxx)
xxx
(xxx)
xxx

Gain/Loss

xxx

Gain/Loss

xxx
Net Income
Cash

1. A.

2. B.

FVPA
Beginning
xxx End
xxx
Contribution
xxx Benefits Paid xxx
Actual Returns xxx

xxx

If not
Substantial

3. Net Benefits Expense

PBO
xxx Beginning
xxx
xxx Communal
xxx
Service Cost
Interest Cost
xxx
UPSC
xxx
PBO AG
PBO AL

End
Benefits Paid

+ S - xxx - Service Cost

+ P - xxx - Past Service Cost Vested &
Amortization UPSC
+ I - xxx - Interest Cost
-G
D - xxx - Deferred AG/AL - Amortization
+L

E - xxx - Effect of Curtailment

-G
+L

Note: PBO
PBO

xxx

= AG
= AL

4.

- R - xxx - Return on Plant Assets

[FVP Avg x ER of Return %]
xxx
Net Benefit Expense
(Obligation)

5.
PE beginning
AE ending
Contribution

xxx
xxx

PE/AE
xxx AE beginning
xxx PE ending

FVPA
UAL
UPSC

Net Benefit Obligation

Page 41 of 46

DR
xxx
xxx
xxx
xxx

PBO
UAG
-o-

CR
xxx
xxx
-oxxx

DR > CR = PE
xxx
CR > DR = AE

Note:

Permanent

D < NI

Taxation

D > NI

Temporary
Return of Investment Excess

FVPA

Actual
return

Beginning Balance
xxx
Amt of Contribution xxx
Expected Return
xxx

xxx (?) Ending Balance

xxx Payment/Settlement

Actual Gain

xxx Actual Loss

xxx

Amount of Services
Total Service Cost

PBO
Ending Balance (?) xxx
Payment/Settlement xxx
Contribution

xxx
xxx

Beg. Balance
PSC

xxx
xxx

CSC
Interest Cost

Vested
Not Vested

Page 42 of 46

x
x

x
x

x
x

x
x

x
x
x
x
x

x
x
x
x
x
x

6
x
x
x
x
x
x
x

PBO, End
FVPA, End
UPSC, End
UAL (G)
Prepaid/
Accrued
xxx

xxx
(xxx)
(xxx)
(xxx)
xxx

xxx

Actual Gain

xxx

xxx

Actual Loss

Contributor's Amount x
Plan Asset
x

x
x
x

x
x
x
x

x
x
x
x
x

x
x
x
x
x
x

Summary Employee Benefits

Salaries and Wages

Short Term
Benefits

Accumulating
Short Tern Compensated
Absences

Form
Contribution
Post

Vesting

Funding

Non-Vesting

Non-Accumulating

Formal
Informal
Contributory
Non-Contributory

Funded
Unfunded

Contribution
Page 43 of 46

Benefit

Risk Investment

6
x
x
x
x
x
x
x

xxx

Employment
Benefits
Classification
Employee
Benefits

Defined Contribution
Plan(Trustee)

Definite

Indefinite

Employee

Defined Benefit Plan

Indefinite

Definite

Employer

Difficulty
Other than

Method of
Accounting

Long Term
Employee
Benefits

AG/AL(?) Discounted (?)

Defined Contribution
Plan

Straightforward

Defined Benefit Plan

Complex

Immediate Recognition/ Full

Recognition Approach

Corrigidor Approach

Other Comprehensive Income

Net Benefit Eqty

(P&L)

Termination
Benefits

A
Type 1

L
A
L

(
)

(
)

OE

OE

CB

+ (

Page 44 of 46

G
L
G Contributor Holiday
L Additional Contribution
Recognition
"E,AE, PE"
"SPIDER"

Type 2
Error Non-Capitalization of Major Repair [Should be Asset]
or with non-recording of [Depreciation/Amortization]

+
(

)
(

Type 1
Error Capitalization of Reports and Maintenance of [Should be]
expense (with over recording of Depreciation
or Amortization)

Income

)
+
+

xx
Other Comprehensive Income
UG (UL) AFS
FOREX Gain(Loss)
Piecemeal
Realization of RS
Full Recognition AG (AL)

xx (xx)
xx (xx)
xx (xx)
xx (xx)
Page 45 of 46

Total Comprehensive Income

Note:

xxx

Reclassification from cost to

equity (C - E) the
adjustment to R.E. is
reported to O.C.I

Page 46 of 46