Ngas Manual

MANUAL ON THE NEW GOVERNMENT ACCOUNTING SYSTEM For National Government Agencies ACCOUNTING POLICIES Volume I Chapter 1. Presentation Objectives of the Manual. The New Government Accounting System (NGAS) Manual presents the fundamental strategies and techniques; the new coding framework; the bookkeeping frameworks, books, libraries, records, structures, reports, and fiscal reports; and illustrative bookkeeping passages to be embraced by all national government offices powerful January 1, 2002. The targets of the Manual are to endorse the accompanying: . Uniform rules and methodology in representing government assets and property; b. New coding structure and outline of records; c. Bookkeeping books, vaults, records, structures, reports and fiscal summaries; and d. Bookkeeping passages. Inclusion. This Manual will be utilized by all national government offices. Legitimate Basis. This Manual is recommended by the Commission on Audit compliant with Article IX-D, Section 2 standard. (2) of the 1987 Constitution of the Republic of the Philippines which gives that: The Commission on Audit will have elite position, subject to the restrictions in this Article, to characterize the extent of its review and assessment, set up the procedures and strategies required therefor, and declare bookkeeping and examining rules and guidelines, including those for the avoidance and forbiddance of sporadic, superfluous, over the top, extreme, or unconscionable consumptions, or employments of government reserves and properties†. (underscoring provided) Chapter 2. Fundamental Features and Policies Basic Features and Policies. The NGAS has the accompanying essential highlights and strategies, indeed: a.Accrual Accounting. An altered accumulation premise of bookkeeping will be utilized. Under this technique, all costs will be perceived when brought about and revealed in the budget reports in the period to which they relate. Pay will be on accumulation premise with the exception of exc hanges where collection premise is unreasonable or when different techniques are legally necessary. b. One Fund Concept. This framework embraces the one store idea. Separate reserve bookkeeping will be done just when explicitly legally necessary or by a contributor office or when in any case required by conditions subject to earlier endorsement of the Commission. . Outline of Accounts and Account Codes. Another graph of records and coding structure with a three-digit account numbering framework will be received. (See Volume III, The Chart of Accounts) d. Books of Accounts. Every single national office will keep up two arrangements of books, in particular: Regular Agency (RA) Books. These will be utilized to record the receipt and usage of Notice of Cash Allocation (NCA) and other salary/receipts which the offices are approved to utilize and to store with Authorized Government Depository Bank (AGDB) and the National Treasury.These will comprise of diaries and records, as follows: Jou rnals †¢ Cash Receipts Journal (CRJ) †¢ Cash Disbursements Journal (CDJ) †¢ Check Disbursements Journal (CkDJ) †¢ General Journal (GJ) Ledgers †¢ General Ledger (GL) †¢ Subsidiary Ledgers (SL) for: ? Money ? Receivables ? Inventories ? Ventures ? Property, Plant and Equipment ? Development in Progress ? Liabilities ? Pay ? Costs National Government (NG) Books. These will be utilized to record salary which the organizations are not approved to utilize and are required to be transmitted to the National Treasury.These will comprise of: †¢ Cash Journal (CJ) †¢ General Journal (GJ) †¢ General Ledger (GL) †¢ Subsidiary Ledger (SL) With the usage of the mechanized office bookkeeping framework, just the General Journal will be utilized along with the records by the two books. e. Fiscal reports. The accompanying explanations will be readied: †¢ Balance Sheet †¢ Statement of Government Equity †¢ Statement of Income and Expenses †¢ Statement of Cash Flows Notes to Financial Statements will go with the above tatements. f. Two-Money Column Trial Balance. The two †cash segment preliminary equalization indicating the record adjusts will be utilized. g. Designation and Obligation. Commitment bookkeeping is changed to disentangle methodology in the incurrence and liquidation of commitments and the chronicle of the budgetary records (distributions and commitments caused and sold). Separate vaults will be kept up to control the distributions and commitments for every one of the four classes of portions, to be specific: Registry of Allotments and Obligations †Capital Outlay (RAOCO) †¢ Registry of Allotments and Obligations †Maintenance and Other Operating Expenses (RAOMO) †¢ Registry of Allotments and Obligations †Personal Services (RAOPS) †¢ Registry of Allotments and Obligations-Financial Expenses (RAOFE). h. Notice of Cash Allocation (NCA). The receipt of NCA by the office will be recorded in the books as charge to account â€Å"Cash-National Treasury, Modified Disbursement System (MDS)† and credit to account â€Å"Subsidy Income from National Government†. I. Monetary Expenses.Financial costs, for example, bank charges, premium costs, responsibility charges and other related costs will be independently arranged from Maintenance and Other Operating Expenses (MOOE). j. Unending Inventory of Supplies and Materials. Supplies and materials bought for stock reason will be recorded utilizing the unending stock framework. Normal buys will be flowed through the stock record and issuances thereof will be recorded as they happen with the exception of those bought out of Petty Cash Fund which will be charged straightforwardly to the proper business ledgers. k. Valuation of Inventory.Cost of closure stock of provisions and materials will be registered utilizing the moving normal technique. l. Support of Supplies and Property, Plant and Equipment Ledg er Cards. For suitable check and equalization, the Accounting Units of organizations, just as the Property Offices, will keep up Supplies Ledger Cards/Stock Cards by stock number and Property, Plant and Equipment Ledger Cards/Property Cards by class of property, plant and hardware, separately. m. Development of Assets. For resources under development, the Construction Period Theory will be applied for costing purposes.Bonus paid to the temporary worker for finishing the work early will be added to the absolute expense of the task. Exchanged harms charged and paid for by the contractual worker will be deducted from the absolute expense of the task. Any related costs brought about during the development of the task, for example, charges, intrigue, permit expenses, license expenses, leeway charge, and so forth will be promoted, and those caused after the development will frame some portion of working expense. n. Vault of Public Infrastructures/Registry of Reforestation Projects.For org anizations that develop open frameworks, for example, streets, spans, conduits, railroads, court, landmarks, and so forth , and contribute on reforestation extends, a Registry of Public Infrastructures (RPI)/Registry of Reforestation Projects (RRP) will be kept up for every classification of foundations/reforestation ventures. Models are: †¢ Registry of Public Infrastructures †Bridges (RPIB) †¢ Registry of Public Infrastructures †Roads (RPIR) †¢ Registry of Public Infrastructures †Parks (RPIP) †¢ Registry of Reforestation Projects (RRP)A Summary of Public Infrastructures/Reforestation Projects will be arranged and remembered for the Notes to Financial Statements. o. Deterioration. The straight-line strategy for devaluation will be utilized. Devaluation will begin the second month after acquisition of the property, plant and gear, and a leftover worth identical to 10% of the buy cost will be set-up. Open frameworks/reforestation extends just as work able resources that are done being utilized will not be charged any deterioration. . Renaming of Assets. Functional resources done being utilized will be renamed to â€Å"Other Assets† account and will not be dependent upon deterioration. q. Stipend for Doubtful Accounts. An Allowance for Doubtful Accounts will be set up for evaluated uncollectible exchange receivables to take into account their reasonable valuation. r. Disposal of Contingent Accounts. Unforeseen records will never again be utilized. Every money related exchange will be recorded utilizing the fitting accounts.Cash deficiencies and refused installments, which become last and executory, will be recorded under receivable records â€Å"Due From Officers and Employees† or â€Å"Receivables-Disallowances/Charges†, by and large. s. Acknowledgment of Liability. Obligation will be perceived at the time products and ventures are acknowledged or rendered and provider/bank bills are gotten. t. Intrigue Accr ual. At whatever point commonsense and fitting, intrigue salary and additionally cost will be collected and perceived in the books of records. u. Representing Borrowings and Loans. All borrowings and advances caused will be recorded to the proper obligation accounts. . Disposal of end product and negative diary sections. The utilization of culmination and negative diary passages will be halted. Obtaining/Disposition of advantages will be charged/credited to the suitable resource accounts. On the off chance that a blunder is submitted, a remedying passage to modify the first section will be readied. w. Insignificant Cash Fund. The Petty Cash Fund will be kept up under the imprest framework. In that capacity, all recharges will be legitimately charged to the business ledger and consistently, the Petty Cash Fund will be equivalent to the absolute money close by and the unreplenished expenses.The Petty Cash Fund will not be utilized to buy standard stock/things for stock. x. Outside Cur rency Adjustment. Money stores in outside cash and exceptional remote credits will be processed at the swapping scale endorsed by the Bangko Sentral ng Pilipinas at monetary record dat