BARIA, ANNE MARIE D. CBET-01-602P REFLECTION ON THE GAM VOL. I, CH. 7, 8, 9 1. What needs to be remembered for each chapter and Why? The Chapters seven up to nine of the Government Accounting Manual Volume I consists of the Financial Instruments, the Inventories, and the Investment Property wherein it encompasses various things to remember. Chapter seven is focused on the shows the information about the appropriate principles to be applied regarding the presentation, recognition, measurement, and disclosures needed for financial instruments such as liabilities, net assets or equity, and the level of risks resulting from financial instruments to which the entity is exposed during the reporting period and at the end of the reporting period, and how the entity handles those risks. It is significant to remember the specified characteristics of financial instruments before accounting for them. This chapter clearly stated that there are three main characteristics to distinguish financial instruments among others such as there must be a contract, at least two parties involved in the contract, and the contract shall give rise to both financial assets of one party and financial liability of another party. Furthermore, derivatives and hedging should also be remembered because it involves the price from fluctuations in commodity prices, foreign exchange rate and interest rate of the underlying asset or financial instrument as well as the process of reducing the possible financial loss or structuring of a deal to minimize the risk of financial instruments. Chapter eight is focused on the detailed systems and regulations for the purchase, issue, removal and impairment of inventories and establishes a standard for those tangible products not necessary to be considered as Land, Plant and Equipment. It also consists of the description, identification, estimation, cost methods to be used and related disclosure criteria in compliance with PPSAS 12 on inventories. The use of weighted average method and perpetual inventory method are important to be remembered because these methods have very different recognition and measurement that affects the totality of inventories as well as the computation for the past and future releases of products which might result in conflict in both production and company itself. The inventory accounting system and its sub-system must also be put into mind when accounting for inventories for these encompasses the system of monitoring, controlling and recording of acquisition and disposal of inventory so that all transactions will run smooth and with less errors. Chapter nine is focused includes recommendations, policy decisions, rules and regulations for the financial reporting of investment property under PPSAS 16. Moreover, corporations shall apply these same policies to the IP, along with the assessment in the lessee's financial statements of the IP interest held together under lease accounted for as a financial lease and the measurement in the lessee's IP financial statements provided under an operating lease. The items to consider and not consider are the most important things to remember in this chapter because these items are confusing to identify but greatly affects the recording of investment property. Another topic to remember in this chapter is the transfers to and from investment property because it is shall only be made when any of four criterias are met namely the commencement of owner-occupation, for a transfer from IP to owner-occupied property, commencement of development with a view to sale, for a transfer from IP to inventories, end of owner-occupation, for a transfer from owner-occupied property to IP, or commencement of an operating lease (on a commercial basis) to another party, for a transfer from inventories to IP. Meeting any of these will result in a transfer to or from an IP which will affect inventories also and many other accounting records. 2. What is your take away from each of these chapters? Why? These chapters emphasized various significant topics to remember that are very similar about the intermediate accounting topics. It made me realize that what we have already learned from the past lessons are still applicable in the higher accounting subjects and that they are really the foundation that will lead us into deeper but easier understanding of harder topics in other types of accounting. I was reminded about the proper use of amortization tables and the accounting entries for inventories which might be confusing when journalizing investment property. I have learned that accounting for the financial transactions of the people’s fund will not always be new and unfamiliar but there are still topics that even a freshman may account for. These chapters reminded me that more and more transactions may be computed efficiently by using formulas and not just computing them one by one using a traditional method of adding, subtracting, multiplying, and dividing. I have also realized that we must always remind ourselves of the various account titles and entries even though these are not usually asked in quizzes and exams, due to the fact that these are simple and yet significant items to remember for any accounting area of responsibility. Reference: Coa.gov.ph. (2015). Retrieved from https://www.coa.gov.ph/phocadownload/userupload/Issuances/Circulars/Circ2015/G AM_for_NGAs_Volume_I.pdf.
