ACCCOB 2 PORTFOLIO

Reflection paper presented

to the Accountancy Department

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In partial fulfilment

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of the course requirement

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in ACCCOB2 2019-2020
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Del Rosario, Anne Lorraine L.

Divina, Dana Monica S.
K40
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 Del Rosario, Anne L.
Divina, Dana S.
ACCCOB2- K40
Nowadays, many businesses in our country are open to investors and potential clients.
Ensuring transparency among their financial records shows the mentioned audience a
variety of useful information that they may use to make their decisions and manage their
cash efficiently. The company that we were tasked to analyze is Ayala Land Incorporated,
which is a subsidiary of Ayala Corporation that focuses on property development and real
estate. They became a cooperation in the year of 1988, and they have publicly listed their
stocks since 1991. As a large company, having financial records that follow principles and
exhibit good accounting practices is important to them and strengthens their structure.

Ayala Land Corporation’s financial statements aim to inform its primary and other users

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which includes shareholders, customers, investors and the like, regarding the results of

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their operations for a certain period of time. It is one method to determine which decisions

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should be undertaken in order to allocate the available resources of the company. The said

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financial statements were arranged in compliance with Philippine Financial Reporting
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(PFRSs), hence makes the financial statements transparent and consistent. Based on the
data gathered from the company, it is revealed that there is full disclosure and relevance
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considering it has the capability to change and possibly impact the decision of its users or
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readers. For instance, seeing that the company has P302,829,898 total assets and
P240,784,527 total liabilities for the year 2018, which is greater than the amount from the
previous year respectively, P240,852,281 and P573,992,334. It could signify the company
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can pay its debts with cash to spare and there’s protection if ever there are business slow-
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downs in the future like this pandemic.

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Furthermore, the financial statement provided is easily understandable for those with basic
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knowledge in accounting, considering the data is done in a clear and precise manner. It is
also comparable considering it speaks the same language as other financial statements,
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thus making it convenient to observe similarities and differences with other entities .
Historical data was used in the consolidated financial statements of the company, except for

financial assets at fair value through profit or loss (FVPL), financial assets at fair value

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 Del Rosario, Anne L.
Divina, Dana S.
ACCCOB2- K40
through other comprehensive income (FVOCI) and available-for-sale financial assets were
measured at fair value. Additionally, the currency used in the consolidated financial
statements were in Philippine Pesos, similar to the Parent Company’s functional currency
and were rounded to the nearest thousand, unless otherwise stated. Lastly, the timeliness
of the report is present since it was produced once a year and issued in the first few
months of the following year in time for the users to rely on the information and form
valuable decisions.

As for the cash and cash equivalents, multiple principles may be discussed for them, the
first one being the cost principle. It’s important to note that it is the use of the

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actual/historical value of assets at all times and this is what they have followed for the

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cash/cash equivalents. Although the use of fair value for other parts is mentioned in their

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financial report, this does not apply to the mentioned, as the value of cash doesn’t change in

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the records, therefore there is no need to adjust it to “fair value”. In relation to this, we
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know that relevance is all about values that are capable of making a difference in the
decisions made by the company, clients and future clients, and therefore the use of the cost
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principle supports this due to the probable cause of them wanting to show the importance
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of the original purchase prices which would best show value. Doing so would show
significant amounts of how much they have earned/lost for their own usage and for that of
their future investors’. The principle of full disclosure is also evident when we look at the
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cash/cash equivalents, as there are multiple guides that viewers of the records may check
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for their own reference, such as the notes which allow them to see the computations for the
total cash and the definitions of the mentioned that create an impact onto their
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understanding of the terms are extremely useful especially for those with brief accounting
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knowledge.
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The trade and other receivables of the company are classified under 6 different categories,
which are corporate business, shopping centers, residential/office development,

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 Del Rosario, Anne L.
Divina, Dana S.
ACCCOB2- K40
management fees, construction and others (receivables from their hotels and extended
services). One of the evident principles in the receivables is conservatism, which is when
anticipated losses are to be provided and anticipated gains are not accounted for unless
recognized. If we take a look at their allowance for impairment losses, we can see that 10%
of their outstanding receivables were acknowledged as uncollectible and provisions of Php
872,268.00 have been allocated. The corporation gets its receivables at least once a year
considering its receivables turnover is at 1.10. Taking into account that the company’s
nature revolves around property development buy and sell, it is plausible they have a low
receivable turnover.

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With this information on hand, Ayala Land Corporation is observing the rules and

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regulations of Philippine Financial Reporting Standards regarding the disclosure and

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reports of financial statements. Furthermore, the aforementioned is properly done and

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consistent, which means that it can be issued for primary and other users to aid them in
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making the right decisions. It is important that the users of the financial statements are
aware of the company’s strengths and weaknesses for the purpose of knowing where to
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allocate resources to maximize profit or whether to invest in this company. Overall, Ayala’s
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growth is steadily increasing over the years and it is expected to further have a higher rate
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of property investments since it is their main way of generating income.

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 Del Rosario, Anne L.
Divina, Dana S.
ACCCOB2- K40

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This study source was downloaded by 100000829014880 from [Link] on 07-10-2021 [Link] GMT -05:00

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 Del Rosario, Anne L.
Divina, Dana S.
ACCCOB2- K40

m
er as
co
eH w
o.
rs e
ou urc
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aC s
vi y re
ed d
ar stu
is
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sh

This study source was downloaded by 100000829014880 from [Link] on 07-10-2021 [Link] GMT -05:00

[Link]
 Del Rosario, Anne L.
Divina, Dana S.
ACCCOB2- K40

m
er as
co
eH w
o.
rs e
ou urc
o
aC s
vi y re
ed d
ar stu
is
Th
sh

This study source was downloaded by 100000829014880 from [Link] on 07-10-2021 [Link] GMT -05:00

[Link]
 Del Rosario, Anne L.
Divina, Dana S.
ACCCOB2- K40

m
er as
co
eH w
o.
rs e
ou urc
o
aC s
vi y re
ed d
ar stu
is
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sh

This study source was downloaded by 100000829014880 from [Link] on 07-10-2021 [Link] GMT -05:00

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