Revised Estimated Useful Life in Computing Depreciation for Government Property, Plant and Equipment

December 11, 2003

COA CIRCULAR NO. 007-03

 

1.0 This Circular is issued to provide policies and guidelines on the computation of depreciation of government property, plant and equipment for allocating the same over their useful life and fair presentation of the financial statements.

2.0 The straight-line method of computing the depreciation for government property, plant and equipment shall be adopted.

3.0 For uniformity in the application of useful life and simplification in its computation, the Estimated Useful Life of PPE by classification are presented as Annex A of this Circular.

4.0 A residual value equivalent to ten percent (10%) of the acquisition cost/appraised value shall be deducted before dividing the same by the Estimated Useful Life.

5.0 Any adjustments arising from this revision of useful life shall be charged against "Prior Years' Adjustments" account (Code 684).

6.0 This circular shall take effect January 1, 2004. SETAcC

(SGD.) GUILLERMO N. CARAGUEChairman

ANNEX A

TABLE OF ESTIMATED USEFUL LIFE OF

				Estimated
Property, Plant and Equipment	Useful Life
				(in years)
•	Land Improvements
	•	Land Improvements	10
	•	Runways/taxiways	20
	•	Railways	40
		Electrification, Power and Energy Structures	10
•	Buildings — those that are predominantly
	•	Wood		10
	•	Mixed		20
		Concrete	30
•	Leasehold Improvements (Note 1)
	•	Land		10
	•	Building
		•	Wood	10
		•	Mixed	20
		•	Concrete	30
•	Office, Equipment, Furniture and Fixtures
	•	Office Equipment	5
	•	Furniture and Fixtures	10
	•	IT Equipment — Hardware	5
	•	Library Books	5
•	Machineries and Equipment
	•	Machineries	10
	•	Agricultural, Fishery and Forestry	10
	•	Airport Equipment	10
	•	Communication Equipment	10
	•	Construction and Heavy Equipment	10
	•	Firefighting Equipment and Accessories	7
	•	Hospital Equipment	10
	•	Medical, Dental and Laboratory Equipment	10
	•	Military and Police Equipment	10
	•	Sports Equipment	10
	•	Technical and Scientific Equipment	10
	•	Other Machineries and Equipment	10
•	Transportation Equipment
	•	Motor Vehicles	7
	•	Trains		10
	•	Aircraft and Aircraft Ground Equipment	10
	•	Watercrafts	10
	•	Other Transportation Equipment	10
•	Other Property, Plant and Equipment	5

Note 1 The estimated useful life shall depend on the length of the lease. It shall be the period of the lease or the estimated useful life of the assets, as given, whichever is shorter.