PAMANTASAN NG LUNGSOD NG MAYNILA

(University of the City of Manila)

Gen. Luna cor. Muralla St., Intramuros, Manila

COLLEGE OF BUSINESS AND GOVERNMENT MANAGEMENT

INSTITUTE OF ACCOUNTANCY

Case Analysis of
Ateneo Multi-Purpose Cooperative
(AMPC)

In Partial Fulfillment of the Requirement

In Accounting for Specialized Industries

Submitted by:
Cruz, Maureen Anne A.
Dio, Jon Patrick R.
Guevarra, Shaina T.
Nuñez, Neslie Danes M.

BSA 5 – 2

Submitted to:
Prof. Josephine P. Yopo
Adviser

A.Y. 2019 – 2020

 TABLE OF CONTENTS

Vision and Mission of the Agency/Organization

Audit Opinion

Audit and Accounting Issues

Recommendations

Financial Ratios and Analysis

Major Sources of Funds and Revenues

Major Expenditures

Peculiar Accounts

Organizational Structure and Possible Internal Control Issues

Appendix A: Auditor’s Report

 Ateneo De Manila Multi-Purpose Cooperative – AMPC

Network Affiliations:

NATCCO

Address:

Ground Floor, Gonzaga Hall, Ateneo De Manila University, Loyola Heights, Quezon City

Region:

NCR

Contact Person:

Evelyn Quidlat

(02) 426-6071

ampc@admu.edu.ph

Organization Type:

Cooperative
A. Vision and Mission of the Agency/Organization

Mission

To promote, strengthen and improve the operations of Ateneo de Manila Multi-Purpose

Cooperative (AMPC), thereby making it a practical vehicle for providing maximum socio-

economic benefits and services to its shareholders and to the members of Ateneo de

Manila University community.

Vision

A caring and sharing community of persons who are able to improve their quality of life

and attain social justice through a viable and responsive cooperative.

Goals

To encourage thrift and savings mobilization among the members.

To generate funds and extend credit to the members for productive and provident

purposes.

To provide goods and services to the members.

To develop among its members expertise and skills and teach them efficient ways of

doing things in cooperative manner.

To propagate cooperative practices and new ideas in business and management.

To help bring about a stronger cooperative movement through linkages with the other

cooperatives on and off campus.

B. Audit Opinion

Unmodified/Unqualified

Based on the report of Ateneo Multi-Purpose Cooperative’s independent auditor,

the accompanying financial statements present fairly and appropriately in all

material aspects, without any identified exceptions, and in compliance with

generally accepted accounting principles (GAAP) the financial position of AMPC

as at December 31, 2018 and 2017, and of its financial performance and its cash

flows for the years ended in accordance with Philippine Financial Reporting

Framework for Cooperatives.

This type of auditor’s report does not judge the financial position of the company

or interpret financial data. The result of the testing done during the audit, the

independent auditor has enough information to conclude that the company’s

financial statements conform with GAAP and fairly present the company’s

financial position for the statement time frame. All changes, accounting policies

and their application and effects, have accurately been disclosed.

C. Audit and Accounting Issues

D. Recommendations

E. Financial Ratios and Analysis

Vertical

Statement of Financial Position

Statement of Equity

Statement of Cash Flows

Statement of Operations
 Horizontal

Statement of Financial Position

Statement of Equity

Statement of Cash Flows

Statement of Operations

F. Major Sources of Funds and Revenues

AMPC has four (4) major sources of funds and revenues. These services are

loans with 17% Diminishing Interest Rate per Annum, cafeteria (where the members take

their meals; buy their refreshments, even toiletries and over-the-counter medicine), retails

and catering.

Before you become a member, first, you have to attend Pre-membership Education

Seminar (PMES) and fill out membership form (available at the AMPC Office). Next,

you shall pay P100.00 membership fee, then make a minimum subscription of 100

shares x PHP 50.00/share = PHP 5,000.00 (Max. subscription: 10% of

Authorized Capitalization of PHP 60M120,000 shares x PHP 50.00/share = PHP

6M) Lastly, initial payment: at least 25% of minimum subscribed shares (or full

payment) and the balance: payroll deduction or over-the-counter payment within two

(2) years.

G. Major Expenditures

Capital Expenditures

Operating Expenses

Selling Costs
H. Peculiar Accounts

Cash in Cooperative Federation

This account refers to money deposited in the bank under the name of the

cooperative, i.e. savings and time deposits which are unrestricted and readily

available when needed. A subsidiary ledger shall be maintained for each bank

account.

Statutory Funds

Mandatory funds established/set up in accordance with Article 86 of Republic Act

9520.

Reserve Fund

This account refers to the amount set aside annually for the stability of the

cooperativr (equivalent to at least 10% of net surplus) and to meet net operating

losses in its operation. A corresponding fund should be set up either in the form

of time deposit with local banks or government securities.

Coop. Education and Training Fund

This account refers to the amount retained by the cooperative which shall not be

more than ten percent (10%) of the net surplus for the training, development and

other similar cooperative development activities geared towards the growth of the

cooperative movement. Half of the amount allocated for the fund annually shall

be spent by the cooperative for their own education and training purposes, while

the other half may be remitted to a union or federation chosen by the

cooperative.
 Community Development Fund

This account refers to the fund set aside from the net surplus which should not

be less than 3% for projects and/or activities that will benefit the community

where the cooperative operates.

Optional Fund

This account refers to fund set aside from the net surplus not exceeding 7%. It

shall be used for acquisition of land and/or activities that will benefit the

community where the cooperative operates.

I. Organizational Structure and Possible Internal Control Issues

 ATENEO DE MANILA MULTI-PURPOSE COOPERATIVE
Ateneo De Manila University, Katipunan Avenue, Loyola Heights, Quezon City

STATEMENT OF MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL STATEMENTS

The management of ATENEO DE MANILA MULTI-PURPOSE COOPERATIVE is

responsible for all information and representations contained in the financial statements for
the years ended December 31, 2018 and 2017. The financial statements have been prepared
in conformity with Financial Reporting Standards applicable to Cooperatives in the Philippines
and reflect amounts that are based on the best estimates and informed judgment of
management with an appropriate consideration to materiality.

In this regard, management maintains a system of accounting and reporting which provides for
the necessary internal controls to ensure that transactions are properly authorized and
recorded, assets are safeguarded against unauthorized use or disposition and liabilities are
recognized.

The Board of Directors reviews the financial statements before such statements are approved
and submitted to the members of the Cooperative.

FERNANDO O. VIESCA, JR., the independent auditor and appointed by the Board of Directors,
has examined the financial statements of the Cooperative in accordance with the Philippine
Standards on Auditing and the Standard Audit System for Cooperatives and has expressed his
opinion on the fairness of presentation upon completion of such examination, in his report to
members of the Cooperative.

TIMOTHY G. GABUNA CHRISTINA R. BARZABAL REGINALDO M. MARCE

Board Chairman General Manager Treasurer
 FERNANDO O. VIESCA, JR. CERTIFIED PUBLIC ACCOUNTANT
Member: Philippine Institute of Certified Public Accountants (PICPA) CDA Accredited Cooperative Auditor

INDEPENDENT AUDITOR’S REPORT

TO THE BOARD OF DIRECTORS

Ateneo De Manila Multi-Purpose Cooperative
Ateneo De Manila University, Katipunan Avenue,
Loyola Heights, Quezon City

I have audited the accompanying financial statements of ATENEO DE MANILA MULTI-PURPOSE COOPERATIVE, which
comprise the statements of financial condition as at December 31, 2018 and 2017, and the statements of operation, statements
of changes in equity and statements of cash flows for the years then ended, and a summary of significant accounting policies and
other explanatory notes.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with Financial
Reporting Standards applicable to Cooperatives in the Philippines, taking into consideration Cooperative laws, rules, regulations
and principles. This responsibility includes designing, implementing and maintaining internal control relevant to the preparation
and fair presentation of financial statements that are free from material misstatements, whether due to fraud or error; selecting
and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor’s Responsibility

My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance
with Philippine Standards on Auditing. Those standards require that I comply with ethical requirements and plan and perform the
audit to obtain reasonable assurance whether the financial statements are free from material misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.
The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the
financial statements, whether due to fraud or error.

In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation
of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the
overall presentation of the financial statements. I believe that the audit evidence I have obtained is sufficient and appropriate to
provide a basis for my audit opinion.

Opinion

In my opinion, the financial statements present fairly, in all material respects, the financial position of ATENEO DE MANILA
MULTI-PURPOSE COOPERATIVE, as of December 31, 2018 and 2017, and of its financial performance, changes in equity, and
its cash flows for the years then ended in accordance with Financial Reporting Standards applicable to Cooperatives in the
Philippines, taking into consideration Cooperative laws, rules, regulations and principles.

FERNANDO O. VIESCA, JR.

CPA No. 43051
TIN No. 137-764-917
PTR No. 9238648 Dated January 20, 2019, Quezon City
PRC–BOA Registration No. 0864
CDA CEA No. 886
BIR Accreditation No. 05-004375-1-2012
March 06, 2019
Caloocan City
 FERNANDO O. VIESCA, JR. CERTIFIED PUBLIC ACCOUNTANT
Member: Phil. Institute of Certified Public Accountants (PICPA)
CDA Accredited Cooperative Auditor

STATEMENT OF REPRESENTATION

TO THE COOPERATIVE DEVELOPMENT AUTHORITY:

In connection with my examination of the financial statements of the ATENEO DE MANILA MULTI- PURPOSE
COOPERATIVE covering the period ended December 31, 2018 that are herewith submitted to the Cooperative
Development Authority, I hereby represent the following:

1. That said financial statements herewith attached are prepared and presented in conformity with the
financial reporting standards applicable to cooperatives in the Philippines;

2. That in the conduct of my audit, I adhered to the Philippine Standards on Auditing and the Standard
Audit System for Cooperatives (SASC) as required by the Cooperative Development Authority;

3. That I am qualified as provided for in Section 8 of the Code of Professional Ethics for Certified
Public Accountants and Article 81 of R.A. No. 9520 (Cooperative Code of the Philippines);

4. That I am fully aware of my responsibility as an independent auditor for the audit report issued and
attached to the financial statements and the sanctions to be bestowed on me for my misrepresentations
that I may have willingly or unwillingly committed.

5. That I nor any member of my immediate family do not have any direct or indirect financial interest
with the cooperative;

6. That I am not an employee nor an officer of a secondary cooperative or tertiary cooperative of which
this cooperative is a member;

7. That I am not an employee of the Cooperative Development Authority nor have I engaged an
employee of the CDA in the course of audit;

8. That I make this representation in my individual capacity;

9. That I am a member of the North Caloocan Chapter of the PICPA.

It is however, understood that my accountability is based on matter within the normal coverage of an audit
conducted in accordance with Philippine Standards on Auditing and the Standard Audit Systems for
Cooperatives.

FERNANDO O. VIESCA, JR.

CPA No. 43051 TIN No. 137-764-917 PTR No. 9238648
Dated January 20, 2019, Quezon City PRC–BOA
Registration No. 0864
CDA CEA No. 886 BIR Accreditation No.
05-004375-1-2012
 ATENEO DE MANILA MULTI-PURPOSE COOPERATIVE
Ateneo de Manila University, Katipunan Avenue, Loyola Heights, Quezon City
CDA Registration No. 9520-16012560
STATEMENTS OF FINANCIAL CONDITION
AS OF DECEMBER 31, 2018 and 2017
(Amounts in Philippine Pesos)

NOTES 2018 2017

ASSETS
CURRENT ASSETS:
Cash and Cash Equivalents 2.3, 3 35,316,142.61 1,181,219.34
Loans and Receivables, Net 2.5, 2.6, 4 7,243,703.14 37,475,300.26
Inventories 2.7 997,246.18 871,696.25
Other Current Assets 301,502.71 468,402.73
Total Current Assets 43,858,594.64 39,996,618.58
NON-CURRENT ASSETS:
Property, Plant and Equipment, Net 2.8, 5 838,693.13 578,069.93
Other Non-Current Assets 3,636,416.93 3,636,416.93
Total Non-Current Assets
6 4,475,110.06 4,214,486.86
TOTAL ASSETS 48,333,704.70 44,211,105.44

LIABILITIES AND EQUITY

LIABILITIES
CURRENT LIABILITIES:
Deposit Liabilities 22,805,314.41 18,270,400.03
Trade, Non-Trade and Other 2,049,908.07 2,726,373.18
Payables 7
Interest on Share Capital Payable 2.13 2,532,331.88 2,397,956.18
Patronage Refunds Payable 2.13 425,171.66 328,110.65
Other Current Liabilities 8 690,351.12 649,423.82
Total Current Liabilities 28,503,077.14 24,372,263.86

NON-CURRENT LIABILITIES:
Retirement Fund Payable 2.10 1,607,022.63 1,576,966.34
Members' Benefit and Other Funds 1,020,257.29 1,020,257.29
Payable
Total Non-Current Liabilities 2,627,279.92 2,597,223.63
TOTAL LIABILITIES 31,130,357.06 26,969,487.49

EQUITY
Paid-Up Share Capital 2.11 12,138,760.82 12,220,953.65
Donations and Grants (63,246.36 18,479.64
Statutory Funds 2.13, 9 5,127,833.18 5,002,184.66
Total Equity 17,203,347.64 17,241,617.95
TOTAL LIABILITIES AND EQUITY 48,333,704.70 44,211,105.44

See Notes to Financial Statements

 ATENEO DE MANILA MULTI-PURPOSE COOPERATIVE
Ateneo de Manila University, Katipunan Avenue, Loyola Heights, Quezon City
CDA Registration No. 9520-16012560
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2018 and 2017
(Amounts in Philippine Pesos)

NOTES 2018 2017

REVENUES: 2.12
Gross Income on Sales 10 11,799,572.49 12,514,184.23
Interest Income from Loans 2.12.1 5,512,423.61 5,340,935.49
Service Fees 2.12.2 1,369,372.11 1,916,091.44
Fines, Penalties, Surcharges 2.12.2 22,404.56 6,815.98
Membership Fees 2.12.3 5,600.00 7,100.00
Concession Income 2.12.3 3,699,350.66 4,248,249.02
Rental Income 2.12.3 240,261.10 291,881.15
Income/Interest from Investments 2.12.4 14,618.38 5,293.33
Miscellaneous Income 2.12.5 760,664.79 721,882.04
Total Revenues: 23,424,267.70 25,052,432.68

LESS: EXPENSES: 11
Financing Costs 636,852.69 521,116.50
Selling Costs 16,001,918.88 17,292,405.94
Administrative Costs 4,760,869.21 5,676,478.59
Total Expenses 21,399,640.78 23,490,001.03
NET SURPLUS FOR THE YEAR 2.13 2,024,626.92 1,562,431.65
(FOR ALLOCATION)
Reserve Fund 202,462.69 156,243.17
Education and Training Fund 202,462.69 156,243.17
(Local)
Optional Fund 141,723.88 109,370.22
Community Development & Social 60,738.81 46,872.95
Fund
Interest on Capital & Patronage 1,417,238.85 1,093,702.14
Refunds
NET SURPLUS (AS ALLOCATED) 2,024,626.92 1,562,431.65

See Notes to Financial Statements

 ATENEO DE MANILA MULTI-PURPOSE COOPERATIVE
Ateneo de Manila University, Katipunan Avenue, Loyola Heights, Quezon City
CDA Registration No. 9520-16012560
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2018 and 2017
(Amounts in Philippine Pesos)
NOTES 2018 2017
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Surplus for the Year 2.12 2,024,626.92 1,562,431.66
Adjustments to Reconcile Net
Surplus to Net Cash Provided by
Operating Activities:
Depreciation 2.8 140,865.80 214,733.24
Retirement Benefit Expense 2.10 495,147.67 568,929.91
Change in Assets and Liabilities:
Decrease (Increase) in:
Short-Term Investments 2.4 - 2,607,089.88
Loans and Receivables 2.5, 2.6, 4 2,159,157.65 2,046,525.58)
Inventories 2.7 (125,549.93) 92,417.89
Other Current Assets 166,900.02 (233,462.41)
Increase (Decrease) in:
Deposit Liabilities 4,534,914.38 621,905.23
Trade, Non-Trade and Other 7 (676,465.11) 1,988,332.60
Payables
Other Current Liabilities 8 40,927.30 58,207.06
Net Cash Provided by Operating 8,760,524.70 5,434,059.48
Activities
CASH FLOWS FROM INVESTING
ACTIVITIES:
Acquisition of Property, Plant and 2.8, 5
Equipment 401,489.00) (111,274.50)
Net Cash Used in Investing
Activities 401,489.00) (111,274.50
CASH FLOWS FROM FINANCING
ACTIVITIES:
Withdrawal/Addition of Share 2.11 (82,192.83) 115,863.48
Capital
(Decrease)in Donations and Grants (81,726.00) (1,100.00)
Payment of Interest on Share
Capital & Patronage
Refunds Payables (1,185,802.14) (1,800,229.21)
(Decrease) in Retirement Fund (465,091.38) (565,792.51)
Payable 2.13
(Decrease) in Members' Benefit & 2.10 - (32,271.27)
Other Funds Payable
Change in Statutory Funds (481,739.55) 3,581,106.08)
Net Cash Used in Financing 2.13, 9
Activities (2,296,551.90) (5,864,635.59)
NET INCREASE (DECREASE) IN
CASH 6,062,483.80 541,850.61)
CASH AND CASH EQUIVALENTS,
JANUARY 01 1,181,219.34 1,723,069.95
CASH AND CASH EQUIVALENTS,
DECEMBER 31 2.3,3. 7,243,703.14 1,181,219.34

See Accompanying Notes to Financial Statements

 ATENEO DE MANILA MULTI-PURPOSE COOPERATIVE
Ateneo de Manila University, Katipunan Avenue, Loyola Heights, Quezon City
CDA Registration No. 9520-16012560
STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2018 and 2017
(Amounts in Philippine Pesos)

NOTES 2018 2017

SHARE CAPITAL 2.11
Beginning Balance 12,220,953.65 12,105,090.17
Add: Additional Capital Build-Up 692,307.70 115,863.48
Less: Withdrawals in Capital (774,500.53) –
Ending Balance 12,138,760.82 12,220,953.65
DONATIONS AND GRANTS
Beginning Balance 18,479.64 19,579.64
Add: Additional/Credits - -
Less: Charges (81,726.00) (1,100.00)
Ending Balance (63,246.36) 18,479.64
STATUTORY FUNDS: 2.13
RESERVE FUND: 9
Beginning Balance 2,163,147.0 3,208,199.21
Add: Allocation: 10% net surplus from 202,462.69 156,243.17
Operations
Less: Charges (0.02) (1,201,295.38)
Ending Balance 2,365,609.67 2,163,147.00
EDUCATION AND TRAINING FUND 9
Beginning Balance 1,397,237.62 2,529,887.66
Add: Allocation: 10% net surplus from 202,462.69 156,243.17
Operations
Less: Charges (262,903.24) (1,288,893.21)
Ending Balance 1,336,797.07 1,397,237.62
OPTIONAL FUND 9
Beginning Balance 1,437,628.11 2,020,814.06
Add: Allocation: 7% net surplus from 141,723.88 109,370.22
Operations
Less: Charges - (692,556.17)
Ending Balance 1,579,351.99 1,437,628.11
COMMUNITY DEVELOPMENT AND
SOCIAL FUND
Beginning Balance 4,171.93 355,660.30
Add: Allocation 60,738.81 46,872.95
Credits - -
Less: Charges (218,836.29) (398,361.32)
Ending Balance (153,925.55) 4,171.93
TOTAL STATUTORY FUNDS 5,127,833.18 5,002,184.66
TOTAL EQUITY 17,203,347.64 17,241,617.95

See Accompanying Notes to Financial Statements

 ATENEO DE MANILA MULTI-PURPOSE COOPERATIVE
Ateneo de Manila University, Katipunan Avenue, Loyola Heights, Quezon City
CDA Registration No. 9520-16012560

NOTES TO FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2018

NOTE 1 – ORGANIZATION AND TAX EXEMPTIONS

The ATENEO DE MANILA MULTI-PURPOSE COOPERATIVE formerly known as

Ateneo Consumers Cooperative, Inc. was incorporated and registered with the defunct Bureau
of Agricultural Cooperatives Development (BACOD) as full-fledged Consumers Cooperative
under the repealed Presidential Decree No. 175 and Letter of Implementation No. 23. It was
confirmed as a full-fledged Multi-Purpose Cooperative with the Cooperative Development
Authority (CDA) under repealed Republic Act No. 6938 known as Cooperative Code of the
Philippines. The Cooperative was registered with the Cooperative Development Authority under
Republic Act No.9520 with Registration No.9520-16012560 dated April 28, 2010.

The Cooperative was exempt from income and sales taxes for five (8) years from the date of
registration as provided in Section 5 of the repealed Presidential Decree No. 175. It was also
exempt from the payment of income and sales taxes for a period of ten (10) years which
reckoned from March 10, 1987, the effectivity of Executive Order No. 93, as provided in Article
62 (b) of the repealed Republic Act. 6938. It is likewise exempt from all national, city, provincial,
municipal or barangay taxes of whatever name and nature as its accumulated reserves and
undivided net savings do not exceed ten million pesos (P10,000,000.00) as provided in Article
61 (1) of the Republic Act No.9520 . It is also exempt from the value-added tax (VAT) under
Section 109, pars. (r), (s), (t) and (u), three percentage (3%) tax under Section 116, and five
hundred pesos (P500.00) annual registration fee under Section 236 (B) all of the Tax Code of
1997.
As provided in the articles of cooperation of the Cooperative, its objectives and purposes
among others are as follows:

a) To encourage thrift and savings mobilization among the members for capital
formation;
b) To create funds in order to grant loans for productive and providential
purposes to its members; and
c) To provide goods and services and other requirements of the members.

The Cooperative has been engaged in the operation of canteen business through concession
with the Ateneo de Manila University in Loyola Heights, Quezon City, to provide foods and
drinks of best quality at reasonable prices, and providing credit/lending services to its members
by availing productive and providential loans at reasonable rate of interest. It is also accepting
sub-concessions not only to augment its revenues but likewise to provide more and better foods
and drinks not only among its members but as well as to other Ateneans.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of Financial Statements presentation

The accompanying financial statements have been prepared in accordance with the generally
accepted accounting principles in the Philippines based on the historical cost convention. The
accounting policies have been consistently applied by the Cooperative and are consistent with
those used in the previous year, except for the adoption of the new standards.
2.2 Adoption of revised and new standards
The Accounting Standards Council (ASC) approved the issuance of the new and revised
accounting standards that are based on the revised International Accounting Standards (IAS)
and the new International Financial Reporting Standards (IFRS) issued by the International
Accounting Standards Board (IASB). The new standards are effective for the annual periods
beginning on or after January 1, 2005.

The ASC has renamed the Standards that it issues to correspond better with the issuances of
the IASB. These new standards have been renamed Philippine Accounting Standards (PAS) to
correspond to the adopted IAS while Philippine Financial Reporting Standards (PFRS) to
correspond to the adopted IFRS. Previously, Standards issued by the ASC were designated as
Statement of Financial Accounting Standards (SFAS).
The cooperative, as a qualified entity, has chosen to defer the application of certain standards,
which became effective January 1, 2005.

The following are the Standards that are applicable to the Cooperative:

• PAS 1, Presentation of Financial Statements, provides a framework within an entity

assesses how to present fairly the effects of transaction and other events; provides the base
criteria for classifying liabilities as current or non-current, prohibits the presentation of income
from operating activities and extraordinary items as separate line items in the statements of
income and expenses; and specifies the disclosures about key sources of estimation,
uncertainly and judgments that management has made in the process of applying the entity’s
accounting principles. It also requires changes in the presentation of minority interest in the
balance sheets and statements of income and expenses.

• PAS 7, Cash Flow Statements, requires the provision of information about the historical
changes in cash and cash equivalents of an entity by means of a cash flow statement, which
classifies cash flows during the period from operating, investing and financing activities.

• PAS 8, Accounting Policies, Changes in Accounting Estimates and Errors, removes the
concept of fundamental error and the allowed alternative to retrospective application of
voluntary changes in accounting policies and retrospective restatement to correct prior period
errors. It defines material omissions or misstatements, and describes how to apply the concept
of materiality when applying accounting policies and correcting errors.

• PAS 10, Events After Balance Sheet Date, which prescribes when the Company should
adjust its financial statements for events after the balance sheet date and the disclosures that
an entity should give about when the financial statements were authorized for issue and about
events after the balance sheet date. This standard also requires the Company not to prepare its
financial statement on a going concern assumption is not appropriate.

• PAS 16, Property, Plant and Equipment, provides additional guidance and clarification on
recognition and measurement of items of property, plant and equipment with a cost that is
significant in relation to the total cost of the item shall be depreciated separately.

• PAS 18, Revenue, prescribes the accounting treatment of revenue arising from certain types
of transactions and events. The primary issue in accounting for revenue is determining when to
recognize revenue. Revenue is recognized when it is probable that future economic benefits will
flow to the entity and these benefits can be measured reliably. It also identifies the
circumstances in which these criteria will be met and, therefore, revenue will be recognized. It
also provides practical guidance on the application of these criteria.
• PAS 19, Employee Benefits, which prescribe the accounting and disclosure for employee
benefits. The Standard requires an entity to recognize a liability when an employee has
provided service in exchange for employee benefits to be paid in the future; and an expense
when the entity consumes the economic benefit arising from service provided by an employee in
exchange for employee benefits.
• PAS 24, Related Party Disclosures, provides additional guidance and clarity in the scope of
the standard, the definitions and disclosures for the related parties. It also requires disclosure of
the compensation of the key management personnel by benefit type.

• PAS 36, Impairment of Assets, which prescribe the procedures that an entity applies to
ensure that its assets are carried at no more than its recoverable amount; requires recognition
of impairment losses and reversal of this; and prescribe disclosures.

• PAS 37, Provisions, Contingent Liabilities and Contingent Assets, ensures that
appropriate recognition criteria and measurement bases are applied to provisions, contingent
liabilities and contingent assets and that sufficient information is disclosed in the notes to the
financial statements to enable users to understand their nature, timing and amount.

• PFRS 1, First Time Adoption of PFRS, which sets out the procedures that an entity must
follow when it adopts PFRS for the first time as the basis for preparing its general purpose
financial statements. It provides guidance on the accounting policies, reporting periods,
recognition, de- recognition, reclassification and measurement of assets and liabilities. The
standard sets out optional and mandatory exemptions from the general restatement and
measurement principles of assets and liabilities, guidance and clarification on recognition and
measurement of its items of property, plant and equipment with a cost that is significant in
relation to the total cost of the item shall be depreciated separately. It further provides each part
of an item of property, plant and equipment with a cost that is significant in relation to the total
cost of the item shall be depreciated separately.

2.3 Cash and Cash Equivalents

Cash is valued at face amount.

2.4 Short-Term Investment in Non-Marketable Equity Securities

This represents investment in financial institution that is readily convertible to cash.

2.5 Loans and Receivables

Loans are stated at the amount of unpaid principal. Interest on loans is recognized as income
when collected and earned. Unearned interest on loans are adjusted at the end of the year.

2.6 Allowance for Probable Losses on Loans

Allowance for probable losses is the estimated amount of losses from loans based on the
historical loss experience, current economic conditions, subsequent and possible collections
and other risk factors obtained during the review of the status of existing receivables. It is
established through provisions for probable losses charged to current operations and reduced
by write offs and reversal based on the Cooperative’s standard chart of accounts. Loans are
written off against the allowance for probable losses when management believes that the
collectibility of the principal is unlikely.

2.7 Inventories
The inventories are stated at cost determined by using first-in, first-out method.

2.8 Property, Plant and Equipment

Property and equipment are stated at cost less accumulated depreciation. The cost of an asset
comprises its purchase price and directly attributable costs of bringing the asset to working
conditions for its intended use. Expenditures for additions, improvements and renewals are
capitalized; expenditures for repairs and maintenance are charged to expense as incurred.
When assets are sold, retired or otherwise disposed of, their cost and related accumulated
depreciation are removed from the accounts and any resulting gain or loss is reflected in income
for the period.

Depreciation is computed on the straight-line basis over the estimated useful lives of the assets.
2.9 Other Non-Current Assets
This account includes investment in common trust fund for the retirement fund of the employees
of the Cooperative, and deposit with the bank as cash bond to its surety bond as required by the
Ateneo de Manila University for its exclusive use and full operation of the kitchens and
cafeterias.

2.10 Retirement Cost

The Cooperative has funded, non-contributory defined benefit retirement plan covering all
employees. Retirement costs are actuarially determined using the Projected Unit Credit Method.
This method reflects the years of service rendered by employees to the date of valuation and
incorporates assumptions concerning employees’ projected salaries. Retirement costs include
current service cost plus amortization of past service cost, experience adjustments and changes
in actuarial assumptions over the expected average remaining working lives of the covered
employees. The Cooperative has established a retirement fund to comply with the Republic Act
No.7641 known as the New Retirement Law.

2.11 Share Capital

This represents the paid-up share capital of regular members of the Cooperative and is
withdrawable only upon termination of membership. It earns interest depending on the net
surplus realized by the Cooperative but not to exceed the normal rate of return on investment as
determined by Cooperative Development Authority (CDA).

2.12 Income recognition

Income is recognized to the extent that it is probable that the economic benefits will flow to the
Cooperative and the income can be reliably measured. The following specific recognition criteria
must also be met before income is recognized.

2.12.1 Interest Income from loans

As discussed under policy loans receivable, unearned interest is recognized as income over the
life of the receivable using accrual method. Interest Income from loans is recognized as income
when collected and earned.

2.12.2 Service fees, fines, penalties and surcharges

Service fees, filing fees, fines, penalties and surcharges are immediately recognized as income
upon collection.

2.12.3 Membership fees, concession income,rental income

Membership fees are recognized as income immediately upon collection. These are payments
other than the share capital contribution of the members.

2.12.4 Income/Interest from investments/Deposits

Income/interest income from investments is recognized as income periodically on accrual basis

2.12.5 Miscellaneous Income

These are income that are not classified under the above criteria.

2.13 Statutory Funds

The mandatory order of distribution of the net surplus of the Cooperative is set forth in Article
86, Act No. 9520, as follows:

1. An amount for the reserve fund which shall be at least ten per centum(10%) of net surplus:
Provided, That, in the first five(5) years of operation after registration, this amount shall not be
less than fifty per centum(50%) of the net surplus..
2. An amount for the education and training fund, shall not be more than ten per centum(10%)
of the net surplus. Half of the amounts transferred to the education and training fund annually
under this subsection shall be spent by the cooperative for education and training purposes;
while the other half may be remitted to a union or federation chosen by the cooperative or of
which it is a member.
3. An amount for the community development fund, which shall not be less than three per
centum(3%) of the net surplus.
4. An optional fund, a land and building, and any other necessary fund the total of which shall
not exceed seven per centum(7%).
5. The remaining net surplus shall be made available to the members in the form of interest on
share capital not to exceed the normal rate of return on investments and patronage refunds:
Provided, that any amount remaining after the allowable interest and the patronage refund have
been deducted shall be credited to the reserve fund.

This year, the Cooperative has allocated 10% for the reserve fund, 10% for the education and
training fund, 7% for optional fund/land and building fund, 3% for the community development
fund while the remaining goes to interest on share capital and patronage refunds.

NOTE 3 – CASH AND CASH EQUIVALENTS

This account consists of the following:

2018 2017
Revolving Fund 600,208.84 259,364.08
Cash on Hand 108,512.23 100,000.00
Petty Cash Fund 5,605.55 18,671.62
Cash in Banks 6,529,376.52 803,183.64

Total Cash 7,243,703.14 1,181,219.34

NOTE 4 – LOANS AND RECEIVABLES, NET

This account consists of the following:

2018 2017
Loans 600,208.84 259,364.08
Current 41,832,560.38 45,188,747.33
Past Due - -
Total Loans Receivable 41,832,560.38 45,188,747
Less: Allowance for Probable Losses (1,152,773.61) (1,152,773.61)
Net Loans Receivable 40,679,786.77 44,035,973.72
Unearned Interests (9,592,554.54) (10,039,341.07)
Receivables
Advances to Officers and 342,759.73 170,275.28
Employees
Accounts Receivable – Trade 3,780,022.32 3,143,208.06
Other Current Receivables 106,128.33 165,184.27
Total Receivables 4,228,910.38 3,478,667.61
Total Loans and 35,316,142.61 37,475,300.26
Receivables
NOTE 5 – PROPERTY, PLANT AND EQUIPMENT
This account consists of:

2018 2017
Furniture, Fixtures and Office 4,148,168.83 3,746,679.83
Leasehold Improvements 402,969.14 402,969.14
Total Property, Plant and 4,551,137.97 4,149,648.97
Equipment
Less: Accumulated (3,712,444.84) (3,571,579.04)
Depreciation
Net Property, Plant and 838,693.13 578,069.93
Equipment

NOTE 6 – OTHER NON-CURRENT ASSETS

This account consists of:
2018 2017
Revolving Fund Other Funds and 3,327,654.76 3,327,654.76
Deposits
Computerization Costs 308,762.17 308,762.17
Total 3,636,416.93 3,636,416.93

NOTE 7 – TRADE, NON-TRADE AND OTHER PAYABLES

This account consists of:

2018 2017
Accounts Payable - Suppliers 963,386.31 1,134,002.20
Accounts Payable - Ateneo 1,030,881.52 1,607,346.31
Withholding Tax Payable SSS, (79,784.76) (7,715.59)
Philhealth, ECC, Pag-ibig 84,601.62 (9,578.88)
Contributions Payable
SSS and Pag-ibig Loans Payable 50,823.38 2,319.14
Total Payables 2,049,908.07 2,726,373.18

NOTE 8 – OTHER CURRENT LIABILITITES

This account consists of:

2018 2017
Subcon Deposits Payable 380,000.00 340,000.00
Accrued Expenses 302,304.20 300,805.65
Other Current Liabilities 8,046.92 8,618.17
Total 690,351.12 649,423.82

NOTE 9 – STATUTORY FUNDS

This account consists of the following:

2018 2017
Reserve Fund 2,365,609.67 2,163,147.00
Education and Training Fund 1,336,797.07 1,397,237.62
Optional Fund 1,579,351.99 1,437,628.11
Community Development & Social (153,925.55) 4,171.93
Fund
5,127,833.18 5,002,184.66
Total Statutory Funds
NOTE 10 – GROSS INCOME ON SALES
This account consists of:

2018 2017
REVENUES: 259,364.08
SALES:
Counter Sales 14,399,357.21 15,879,135.33
Retail Sales 11,322,124.93 13,821,993.54
Catering Sales 6,794,663.03 6,170,583.43
Employees Charge Sales 262,670.29 283,177.70
Total Sales 32,778,815.46 36,154,890.00
LESS: COST OF SALES:
Merchandise Inventory, 871,696.25 964,114.14
Beginning
Add: Purchases 21,104,792.90 23,548,287.88
Total Merchandise Available
for Sale 21,976,489.15 24,512,402.02
Less: Merchandise Inventory,
Ending 997,246.18 871,696.25
Cost of Sales 20,979,242.97 23,640,705.77
GROSS INCOME ON SALES 11,799,572.49 12,514,184.23

NOTE 11 – EXPENSES

2018 2017
Financing Costs:
Interest Expense on Deposits 636,852.69 521,116.50
Total Financing Costs 636,852.69 521,116.50
Selling Costs:
Salaries and Wages 7,808,017.89 8,684,756.97
SSS, ECC, Philhealth, Pag-ibig 405,644.70 475,970.30
Contributions
Employees' Benefits 1,589,352.38 1,387,742.14
Retirement Benefit Expense 443,124.07 462,807.66
Kitchen and Canteen Wares 186,775.00 533,679.00
Laundry 61,300.00 62,500.00
Fuel 818,884.13 689,091.60
Ice and Refrigeration 244,309.40 295,731.50
Spoilage Breakage and Losses 599,642.28 545,185.03
Canteen Supplies 855,248.35 1,205,333.25
Concession Fees 2,320,756.34 2,459,479.43
Rentals 132,718.30 109,440.39
Repairs and Maintenance 204,793.05 262,346.65
Depreciation 63,858.28 114,534.24
Travel and Transportation 138,475.00 -
Representation 107,166.32 -
Advertising and Promotion 2,981.39 -
Miscellaneous Expenses 18,872.00 3,807.78
Total Selling Costs 16,001,918.88 17,292,405.94
Administrative Costs:
Salaries and Wages 861,065.10 970,442.46
SSS, ECC, Philhealth, Pag-ibig 53,831.80 83,229.60
Contributions
Employees' Benefits 65,458.93 102,864.37
Retirement Benefit Expense 52,023.60 106,122.25
Officers' Honorarium and 575,232.20 693,200.00
Allowances
Representation 86,006.87 233,405.13
Meetings and Conferences 72,108.37 111,424.48
Office Supplies 183,667.50 263,808.00
Travel and Transportation 66,809.00 247,976.90
Power, Light and Water 2,199,179.20 1,818,479.71
Professional Fees 29,822.22 61,111.17
Taxes, Fees and Charges 5,740.00 13,796.18
Communication 115,532.54 100,825.58
 Advertising and Promotion 7,281.99 16,536.90
Insurance 10,513.96 20,856.51
Litigation Expense - 48,400.00
Depreciation 77,007.52 100,199.00
Garbage Fees 68,640.00 68,640.00
General Assembly Expense 224,370.41 600,154.35
Social and Community Service 3,000.00 -
Expense
Miscellaneous Expenses 3,578.00 15,006.00
Total Administrative Costs 4,760,869.21 5,676,478.59
Total Expenses 21,399,640.78 23,490,001.03

NOTE 12 – STATEMENT PRESENTATION

Certain accounts have been reclassified to conform with the standard chart of accounts for all
types of Cooperatives and financial statement presentation as prescribed by the Cooperative
Development Authority (CDA) and the Philippine Financial Reporting Standards (PFRS).