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Memo To ECs 2020-055

The National Electrification Administration issued Memorandum No. 2020-055 to all Electric Cooperatives, revising the guidelines for writing off worthless consumer accounts receivables. The updated guidelines aim to improve financial reporting, enforce disconnection policies, and establish clear procedures for identifying and managing uncollectible accounts. Key criteria include a requirement for accounts to be disconnected for over five years and proof of collection efforts by EC management.

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20 views6 pages

Memo To ECs 2020-055

The National Electrification Administration issued Memorandum No. 2020-055 to all Electric Cooperatives, revising the guidelines for writing off worthless consumer accounts receivables. The updated guidelines aim to improve financial reporting, enforce disconnection policies, and establish clear procedures for identifying and managing uncollectible accounts. Key criteria include a requirement for accounts to be disconnected for over five years and proof of collection efforts by EC management.

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SHEENA
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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A

--� Management

NATIONAL ELECTRIFICATION ADMINISTRATION


System
ISO 9001 :2015

"The 1st Performance Governance System-Institutionalized National Government Agency" T0VRheinlond


57 NIA Road, Government Center, Diliman, Quezon City 1100 www1uv.com
10 91050820:)()

October 27, 2020

Memorandum No. 2020 - 055

TO All Electric Cooperatives

SUBJECT Revised Guidelines for Writing-Off Worthless Consumer


Accounts Receivables as Amended

I. Rationale

On June 10, 2016, NEA Memorandum No.-2016-009 or the Revised Guidelines


for Writing-Off Worthless Consumer Accounts Receivable was issued giving all
Electric Cooperatives (ECs) the opportunity to write-off all qualified uncollectible
Consumers' Accounts Receivable that have accumulated unrealistically for
years.

The said guideline was revisited and evaluated to determine its applicability in
the present environment. After review of the guidelines, it was considered that
some provisions necessitate amendments and improvement to make the rules
and procedures more stringent.

11. Objectives

1. To have an accurate and fair presentation of the financial viability of the


ECs.

2. To encourage each EC to strictly implement its disconnection policy.

3. To set clear-cut guidelines on the requirements and procedures for the


writing-off of ECs' worthless Consumer Accounts Receivable.

4. To specifically identify worthless accounts that have a negative impact on


the collection efficiency and to provide an adequate allowance for
uncollectible accounts. This will provide ECs with the proper information to
employ better collection strategy.

Ill. General Guidelines

A. Criteria

1. Accounts must be disconnected for more than five (5) years.

2. EC management must present proof that all efforts were exhausted to


collect from concerned consumers.

(02) 929-1909
www.nea.gov.ph

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