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    Philippine Public Sector Accounting Standard 12 Inventories

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    Ingrid Caobleclolal
    This document outlines Philippine Public Sector Accounting Standard 12 on inventories. It consists of the International Public Sector Accounting Standard 12 along with additional Philippine Application Guidance. The guidance provides supplementary guidance on properly implementing IPSAS 12 in the Philippine public sector context. It applies to all government entities except Government Business Enterprises and addresses the scope, cost formulas, and effective date of PPSAS 12.

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    Philippine Public Sector Accounting Standard 12 Inventories

    Uploaded by

    Ingrid Caobleclolal
    1K views3 pages
    This document outlines Philippine Public Sector Accounting Standard 12 on inventories. It consists of the International Public Sector Accounting Standard 12 along with additional Philippine Application Guidance. The guidance provides supplementary guidance on properly implementing IPSAS 12 in the Philippine public sector context. It applies to all government entities except Government Business Enterprises and addresses the scope, cost formulas, and effective date of PPSAS 12.

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    PPSAS 12-Inventories Oct- 18 2013

    Original Title

    PPSAS 12-Inventories Oct- 18 2013

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    This document outlines Philippine Public Sector Accounting Standard 12 on inventories. It consists of the International Public Sector Accounting Standard 12 along with additional Philippine Application Guidance. The guidance provides supplementary guidance on properly implementing IPSAS 12 in the Philippine public sector context. It applies to all government entities except Government Business Enterprises and addresses the scope, cost formulas, and effective date of PPSAS 12.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    1K views3 pages

    Philippine Public Sector Accounting Standard 12 Inventories

    Uploaded by

    Ingrid Caobleclolal
    This document outlines Philippine Public Sector Accounting Standard 12 on inventories. It consists of the International Public Sector Accounting Standard 12 along with additional Philippine Application Guidance. The guidance provides supplementary guidance on properly implementing IPSAS 12 in the Philippine public sector context. It applies to all government entities except Government Business Enterprises and addresses the scope, cost formulas, and effective date of PPSAS 12.

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    Philippine Public Sector Accounting Standard 12

    INVENTORIES

    Table of Contents
    PAG
    Number
    BACKGROUND
    INTRODUCTION TO THE IPSAS 12
    PHILIPPINE APPLICATION GUIDANCE TO IPSAS 12
    Scope

    Cost Formulas

    Effective Date

    PPSAS 12- Inventories


    January 2014
    Page 1

    Philippine Public Sector Accounting Standards 12


    INVENTORIES
    Background
    This Philippine Public Sector Accounting Standard (PPSAS) 12 consists of
    International Public Sector Accounting Standard (IPSAS) 12, Inventories,
    and the Philippine Application Guidance (PAG) prepared to suit the
    Philippine public sector situation.
    The IPSAS 12 was issued in July 2001 and revised in December 2006 by
    the International Public Sector Accounting Standards Board (IPSASB) of the
    International Federation of Accountants (IFAC). This includes amendments
    resulting from IPSASs issued up to January 15, 2012.
    The PAG (in italics) provides supplementary guidance on the proper
    implementation of IPSAS 12.
    Introduction to the IPSAS 12
    IPSAS 12 sets out the accounting treatment for inventories. A primary
    issue in accounting for inventories is the amount of cost to be recognized
    as an asset and carried forward until the related revenues are recognized.
    This Standard provides guidance on the determination of cost and its
    subsequent recognition as an expense, including any writedown to net
    realizable value. It also provides guidance on the cost formulas that are
    used to assign costs to inventories.
    Philippine Application Guidance to IPSAS 12
    Scope
    PAG1.Paragraph 4 deals with the applicability of this Standard to all public
    sector entities other than Government Business Enterprises (GBEs).
    GBE is an entity that has all the following characteristics: (a) Is an
    entity with the power to contract in its own name; (b) Has been
    assigned the financial and operational authority to carry on a
    business; (c) Sells goods and services, in the normal course of its
    business, to other entities at a profit or full cost recovery; (d) Is not
    reliant on continuing government funding to be a going concern
    (other than purchases of outputs at arms length); and (e) Is
    controlled by a public sector entity.
    This standard shall be applied to all National Government Agencies
    (NGAs), Local Government Units (LGUs) and Government-Owned
    and/or Controlled Corporations (GOCCs) not considered as GBEs.
    PPSAS 12- Inventories
    January 2014
    Page 2

    Cost Formulas
    PAG2.Paragraph 32 provides that the cost of inventories of items that are
    not ordinarily interchangeable, and goods and services produced
    and segregated for specific project, shall be assigned by using
    specific identification of their individual costs.
    Paragraph 35, on the other hand, deals with the assignment of cost
    of inventories using the First-in-first-out (FIFO) or weighted average
    cost formulas items that are not specifically identifiable.
    For consistency and uniformity in costing inventories, the weighted
    average shall be adopted for items that are not specifically
    identifiable.
    Effective Date
    PAG3.This PPSAS shall apply for annual financial statements covering
    periods beginning January 1, 2014.

    PPSAS 12- Inventories


    January 2014
    Page 3

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