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Part 6

The document discusses the Revised Chart of Accounts and elements of financial statements. It outlines the account code structure used in the Revised Chart of Accounts which consists of eight mandatory digits representing the account group, major account group, sub-major account group, and general ledger accounts.

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24 views

Part 6

The document discusses the Revised Chart of Accounts and elements of financial statements. It outlines the account code structure used in the Revised Chart of Accounts which consists of eight mandatory digits representing the account group, major account group, sub-major account group, and general ledger accounts.

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Lala Bub
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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The Revised Chart of Accounts

As per Government Accounting Manual Volume III, The Chart of Accounts as Object Code in the Unified
Accounts Code Structure (UACS) is based, primarily, on the following:

a. COA Circular No. 2013 – 002 dated January 30, 2013 prescribing the adoption of the Revised
Chart of Accounts (RCA) for National Government Agencies (NGAs) effective January 1, 2014;
b. COA Resolution No. 2014 – 003 dated January 24, 2014 prescribing the adoption of the
Philippine Public Sector Accounting Standards (PPSAS);
c. COA Circular No. 2014 – 003 dated April 15, 2014 providing the implementing rules and
guidelines on the Conversion from the Philippine Government Chart of Accounts under the
New Government Accounting System per COA Circular No. 2004 – 08 dated September 20,
2004, as amended, to the Revised Chart of Accounts for NGAs;
d. COA-DBM-DOF Joint Circular No. 2013 – 1 dated August 6, 2013 prescribing the UACS, and
e. COA-DBM-DOF Joint Circular No. 2014 -1 dated November 7, 2014 providing the
enhancement of UACS prescribed under COA-DBM-DOF Joint Circular No. 2013 – 1.

During the initial implementation of the PPSAS and the UACS, and during the finalization of the
Government Accounting Manual (GAM) for NGAs, the need to provide additional accounts for some
financial transactions and to modify some existing account codes and description came about. These
revisions will enable the agencies to properly recognize and present their financial transactions. This Chart
of Accounts as Object Code in the UACS, Volume III of the GAM for NGAs, includes additional and modified
accounts.

Elements of Financial Statements

The basis for coding the object classification in the COA Revised Chart of Accounts is accrual accounting,
which requires transactions to be recorded in the period when they occur (and not when cash or its
equivalent is received or paid). Thus, the transactions and events are recorded in the accounting records
and recognized in the financial statements of the periods to which they relate.

Code Asset Groups

1 Assets – economic resources of an agency that are recognized and measured in


the conformity with generally accepted accounting principles.
2 Liabilities – economic obligations of an agency that are recognized and measured
in conformity with accounting principles.
3 Equity – residual interest of the government in an agency which is the excess of
the agency’s assets over its liabilities.
4 Income – the gross inflow of economic benefits or service potential during the
reporting period, when whose inflows results in an increase in assets/equity,
other than increases relating to contributions from owners.
5 Expenses – refer to decrease in economic benefits or service potential during the
reporting period on the form of outflows consumption of assets or incurrence of
liabilities that result in decrease in assets/equity, other than those relating to
contributions to owners.
COA Cir. No. 2013 – 002 further provides that the account code structure consists of eight (8) mandatory
digits as follows:

0 00 00 00 0

Account Group

Major Account Group

Sub- Major Account Group

General Ledger Accounts

General Ledger Contra-Accounts

The Account Group represents the accounts classification as to Assets, Liabilities, Equity, Income and
Expenses.

The Major Accounts group represents classification within the account group; e.g. for asset major
accounts: Cash and Cash Equivalents, Investments, Receivables, Inventories, Investment Property, etc.

The Sub- Major account group represents classification within the major account, e.g. for Cash and Cash
Equivalent: Cash on Hand, Cash in Bank-Local Currency, Cash in Bank – Foreign Currency, etc.

The general ledger accounts represent the accounts to be presented in the detailed financial statements,
e.g. Cash- Collecting Officer, Petty Cash, etc. This is composed of two segments. The first two digits from
the left is the general ledger code, and the last digit is reserved for contra accounts lie, Allowance for
impairment, Accumulated Depreciation, etc.

To distinguish the coding assets with and without contra accounts, the following shall be observed:

Assets with Contra Account (Ex: Accounts Receivables)

1 03 01 010

Asset

Receivables

Loans and Receivable Accounts

Accounts Receivable

General Ledger – Contra Account


Asset with Contra Account (Ex: Allowance for Impairment – AR)

1 03 01 011

Asset

Receivables

Loans and Receivable Accounts

Accounts Receivable

Allowance for Impairment-


Accounts Receivable

Assets without Contra Account (Ex: Cash Collecting Officer)

1 01 01 010

Asset

Cash and Cash Equivalent

Cash on Hand

Cash Collecting Officer

General Ledger Contra-Accounts

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