Revised Estimated Useful Life in Computing Depreciation for Government Property, Plant and Equipment ( COA Circular No. 007-03 )
December 11, 2003
December 11, 2003
COA CIRCULAR NO. 007-03
| TO | : | All Heads of National, Local and Corporate Government Agencies, Heads of Finance/Comptrollership/Financial Management Services, Chief Accountants/Heads of Accounting Units; COA Directors, Auditors; and All Others Concerned |
| SUBJECT | : | Revised Estimated Useful Life in Computing Depreciation for Government Property, Plant and Equipment |
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.