ment and Non-Profit Organizations | 9» aA canon ACC 111 | Accounting for Gover einai | Name: Class number: Section: Schedule: Date Seated in the "Buildings" account in the period they arise, ¢. initially recorded as “Receivables! during the construction period 9. Entity A, a government entity, acquires an equipment for P1M on August 6, 20x1. The equipment’s SSsinoted Useful life is 5 years. How much is the carrying amount of the equipment on December 1, 20x17 a. P 920,833 b. P-936,667 ®.P 916,667 .P 979,167 B assets woulld most likely not be assigned @ residual value by a government entity? a. 2 major part of an equipment ». abbullding held as investment property :. a major tool @. Infrastructure asset 1) Activity 6: Thinking about Learning (5 mins) Work tracker. Congratulations! You have finished the module for today! Shade the number of th that you finished, fe module First Period ___ [Second Period [Third Period Vi2isi4lsfel7paloyt ti la 11.4 1/2 22 [2 [2 Ploy [2 Ia Ja |s siecle ae lista | |= How do you feel today? I feel tere excleny because What are your challenges in learning the concepts in this module? if you do not have challenges, what is your best learning for today? What are the questions/thoughts you want to share to your teacher today?Heritage Assets - those which have historical, cultural and environmental significance, and are intended to be preserved for future generations. infrastructure Assets - includes road networks, flood control, sewer, water ‘and power supply systems, communications networks, railways, seaports, airports. and the like. peforasation Projects -renewallafe forest cover by planting seeds or young trees Activity 3 meets the recognition criteria of PPE and within P75,000 threshold, 1, False. PPE i 2.True 3, Falke. /f below the P15:000 threshold, they are recognized as inventories example is the Expendable Property. 4.True 5. True 6. False. Cost models used for the subsequent measurement of PPE 7. Tree 8. True 9. True 10. True 11. True 12. True taifalee. There is neither gain nor loss. For exchange with commercial substance, first priori vale of Asset Given Up plus any cash paid. — 14. True | SASS hrs document is the property of PHINMA EDUCATION Semi:a Name: Section: Ba Schedile: Lesson Title: Property, Plant and Equipment Lesson Objectives: At the end of this module, you should be able to: 4. State the initial and subsequent measurements af items of PPE of government entities. 2, Describe the following and state their peculliar accounting requirements: Heritage Assets, Infrastructure Assets, and Reforestation Projects. 3, Account for Borrowing Costs by a government entity. ACC 111 | Accounting for Govern ment and Non-Pi Student Activity S Textbook References: Millan, Z. V. (2018). Government Accounting & Accounting far Non- Profit Organizations. Punzalan, A. & Cardona, M (2074), Government Accounting SS Productivity Tip: A. LESSON PREVIEW/REVIEW. 4) Introduction (2 mins) Good Bay! Hope you are all safe, As we continue our journey on knowing government acc = “its not that 'm so smart, its just that | stay with problems longer.” - Albert Einstein better, we will see how government entities account for Property, Plant and Equipment 2). Activity 1: What | Know Chart, part 1 (3 mins)_ Whati Know ~ Questions: \1 fine Merege | Infrastructure | Bb hue Assets Reforestation Assets. “2, How is Borrowing Cost accounted for by government entities? Assets, What | Learned (Activity 4) Bll pd aed, de ew ol rs Wd srtlpg anolQe ACC 111 | Accounting for Government and a student Activity Name: eee Section: _ Suhedie ce = Property Transfer Report — used to record transfers of property from one 4 another. Borrowing costs - are interest and other expenses incurred by an entity in of funds. (PPSAS 55) ion of Capitalization tof the cost of a qualifying asset shall (be): ‘curred, borrowing costs are being incurr ‘ed, and its intended use or sale are in progress. development is interrupted, and expensed. lete, If completed in parts, capitalization of jtalization continues for the uncompleted Commencement, Suspension and Cessati The capitalization of borrowing costs as pa ‘= Commence when outlays for the asset are being in: activities that are necessary to prepare the asset for = suspended during extended periods in which active «Cease when the qualifying asset is substantially compl borrowing costs ceases as each part Is completed; capl parts. 2) Activity 3: Skil-building Activities (with answer key) (18 mins + 2 mins checking) True or False. Sed 1. The capitalization threshold for items of PPE by government entities 's which is equal to the petty cash disbursement limit. duu + imalvidual items of PPE with values below the capitalization threshold but work together asa group are recognized as ifthe ‘otal cost of the group meets the capitalization threshold F tems below the capitalization threshold of PPE are recognized as Semi-Expendable Property -@ separate class of PPE. 4, According to the GAM for N . measurement of items of PPE but cash discounts. 5, The provision for decommissioning and measured at amortized cost. CNM 6, According to the GAM for NGAs, government entities may choose either the cost model or the revaluation model to subsequently measure their PPE. 7. Government entities record depreciation on a monthly basis, _ his document is the property of PHINMA EDUCATION GAs, trade discounts are excluded from the initial restoration costs of item of PPE is subsequently.eb infrastructure assets are generally assigned a residual value of zero. ctv 4: What Know Chart, part 2 (2 mins) > answer the questions in the “What | Know Chart” in Activity 2. Write your answers in the “Whar | column. Let's see your improvement! 4) Activity 5: Check for Under rstanding (5 mins) Gircle the letter of the best answer 3B; Sotlty acquires an equipment for P 1M. The equipment is acquired not for active use in the Production of goods but rather asa standby equipment that will nly be uses ithe sang equipment Reeds to be repaired, Does this equipment qualify for recognition as property ipment? aves all of the recognition criteria for a PPE are met b. No. The equipment does not satisfy all the recognition criterio _, _ © No. Although, the equipment satisfies some of the recognitio call. plan a for a PPE criteria for a PPE. it The equipment shall be classified as “Other Assets,” d. Yes and No. During the periods the equipment is idle, it shall be classified During the periods the equipment is in active use, it shall be classified ase 2. For government entities, the capitalization threshold for PPE i: @.P 15,000 or more b. more than P 15,000 not less than P 25,000 d. at least P 5,000 3. According to the GAM for NGAs, cash discounts not taken on purchases of items of P' @ included in the cost of PPE EE This docurnb. recognized as “Other Losses” ignored 4d. debited to Purchase Discount Lost account i . According to the GAM for NGAs, estimates of decommissioning and restoration PPE are (choose the incorrect statement) a. included in the initial cost of the item of PPE at the present value of the statements: b. credited to the “Other Provisions” account at their present value 6 included in the initial cost of an item of PPE but not subject to subsequent depreciation, although subject to amortization using the effective interest method 4d. are recognized as provisions, at present value, and subsequently measured similar to a financial liability 5. Which of the following costs is not added to ‘the cost of an item of PPE? a. cost of site preparation b. Initial delivery and handling costs c. Net disposal proceeds of samples generated during testing @ Employee benefits arising directly fram the acquisition of PPE 6. Entity A acquires 5 motor vehicles for a package price of P 10M. the supplier provides Entity A 2 promotional item of 1 motor vehicle which is not c as these acquired. The fair value to motor vehicle is P 2M. Which of the following = correct? 6. For individual costing purposes, the cost of each of the 5 motor vet b For individual costing purposes, the'cost of each of the 5 motor vehicles is P ¢ The promotional item is recognized as gain equal to fair value d.aandc 7. Entity A acquires a building through self-construction (construction by a cost of the building will most likely be based on which of the following a. The contract price @ The cost of direct materials, direct labor, and construction averh caorb 4. Fair value at acquisition date. & Entity A acquires 2 building through self-construction (construction by adr construction costs incurred are 4. initially recorded in the Registries and recorded in the books of acco of the construction 2 (p. initially recorded in the "Construction in Progress” accoun In conjunction with the pure