Hi guys, sorry, I wasn’t able to tackle this in class due to lack of time last meeting.

Kindly consider these

as you make your revisions. Thanks.

1. On notes to FS
a. You may not include items such as company info and significant acct policies in the
notes as those are not really needed for PFS purposes. They are required for external
reporting, but not for pfs purposes. Exclude these. Your notes shall start with the
breakdowns. Also, if you have not included the useful lives of your assets in the
assumptions section, you may include them here.
2. If your business is taxable, please make sure that
a. VAT payable or % tax payable in the balance sheet is for one month only as the first 11
months have already been paid.
b. IT payable is for Q4 only as Q1-3 have already been paid.
3. If you are renting your space, please verify if you need to report prepaid rent in the CA or NCA
section(s)- for advance and deposits.
4. In relation to 3, there is expanded withholding on rental payments made by the company.
Please check the rates. But you decide na lang if you will have to incorporate it in your pfs or dili
na lang kung ma hassle na mu. Anyway, if you will not withhold rent, it will have no effect on
your reported rent expense. It will have effect however on your current liabilities- your amount
of rent withheld in December and remittable to BIR. The amount is not that material naman so it
will have no material impact on your financials. So you decide na lang.
5. Please check you cash and cash equivalents. Assess if the amount is excessive. If you think so,
consider the ff options:
a. Payment of liabilities.
b. Distribution to owners.
c. Invest elsewhere.
However, if you can justify such, then it’s ok.
6. For those businesses which have all purchases made in cash, consider the possibility of availing
trade credit-especially those with relatively large purchases and therefore, have negotiating
power with suppliers, consider trade credit.
7. Your current liabilities shall include SSS, Philhealth and pag-ibig remittable- both employees and
employers’ share. Good for one month eto dapat. If you made a table of your payroll na gross
amount, deductions, etc, naa ni sila didtu.
8. In cap budgeting analysis, use operating cash flow.
9. For those companies financed purely with equity, make sure you will be able to justify why you
did not take advantage of positive financial leverage to maximize your ROE.