BUREAU OF FISHERIES AND AQUATIC RESOURCES

NOTES TO FINANCIAL STATEMENTS

December 31, 2002

1. General/Agency Profile
The Bureau of Fisheries and Aquatic Resources, created through RA 8550 - The
Philippine Fisheries Code of 1998, as line bureau of Department of Agriculture, the
main function of which is to promote the development, conservation, management,
protection and utilization of fisheries and aquatic resources is tasked to provide
economical, efficient and effective fisheries services to fishpond operators, fishermen
and other members of the community, implements fishery laws and policies, plans
and programs, and inspect fishery demonstrations farms, nurseries, fishery projects
and fishery stations.
2. Basis of Financial Statements Presentation
The Bureau of Fisheries and Aquatic Resources Consolidated Financial
Statements have been prepared in accordance with the generally accepted state
accounting policies. The Consolidated Financial Statements also include transactions
of fourteen (14) Regional Offices and seven (7) Regional Fisheries Training Center.
3. Significant Accounting Policies
3.1 A modified accrual basis of accounting is used. All expenses shall be recognized
when incurred and reported in the financial statements in the period to which they
relate. Income is on accrual basis except for transactions where accrual basis is
impractical or when other methods are required by law.
3.2 Notice of Cash Allocation (NCA) is recorded in the Regular Agency (RA) books
as well as those income/receipts which the agency is authorized to use.
3.3 Income/receipts which the agency are not authorized to use and are required to
be remitted to the National Treasury are recorded in the National Government
(NG) Books.
3.4 The Modified Obligation System is used to record allotments received and
obligations incurred. Separate registries are maintained to control allotments and
obligations for each class of allotment.

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3.5 Supplies and Materials purchased for inventory purposes are recorded using the
Perpetual Inventory System.
3.6

Petty Cash Fund (PCF) accounts is maintained under the Imprest System. All
replenishments are directly charged to the expense account. The PCF is not
used to purchase regular inventory items for stock.

3.7

For assets under construction, all related expenses incurred during the
construction of the project are capitalized and those incurred after the
construction are charged against the operating cost.

3.8

The Straight Line Method of depreciation is used in depreciating the Property,

Plant and Equipment with estimated useful lives ranging from five to fifty years.
A residual value, computed at ten percent of the cost of asset is set and
depreciation starts on the second month after purchase.

3.9

Payable accounts are recognized and recorded in the books of accounts only
upon acceptance of the goods/inventory/other assets and rendition of services to
the agency.

3.10

Accounts were reclassified to conform with the new Chart of Accounts

prescribed under the New Government Accounting System.

4. Correction of Fundamental Errors

Fundamental errors of prior years are corrected by using the Prior Years'
Adjustment account. Errors affecting current year's operation are charged to the
current year's accounts.
5. Cash
The Cash in Bank-Local Currency Account includes the fund transfers of
P159,577,219.56 from various National Government Agencies, P38,133,333.33 of
which is already due and demandable while the balance of P122,443,886.23 will be
deposited to the Bureau of Treasury.
6. Due from National Treasury
The amount of P390,424.02 from Central Office of Cash-National Treasury,
MDS account is closed to Due from National Treasury account. The said amount
pertains to the NCA received for the deposited performance/bidders bonds which is
not yet refunded to the contractors.

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7. Property, Plant and Equipment

Property, Plant and Equipment are carried at cost less accumulated depreciation.
The Construction Period Theory is used for costing the assets.
Regular maintenance, repair and minor replacements are charged against
Maintenance and Other Operating Expenses (MOOE) as these were incurred.
8. Reversion of unused NCA
The reversion of unused Notice of Allocation (NCA) of P45,916,425.83
comprises of P32,047,599.41 from Central Office, (Fund 101 & 102). The remainder
of P13,868,826.42 pertains to Regional Offices' unused NCA.
9. Reciprocal Accounts
Subsidy to Regional Offices
Subsidy to Operating Units

P 558,135,774.51
46,849,621.00

Total
Subsidy from Central Office

604,985,395.51
607,534.082.76

Difference

2,548,687.25

The difference is a result of entries made by the Regional Offices and Regional
Fisheries Training Center (Operating Units) which are not yet recorded in Central
Office Books. The difference comprises of the amount P928,697.45 which pertains to
fixed asset transferred by the Central Office and an amount of P1,619,989.80 which
pertains to the unobligated balance of allotment covered by the funding check.

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