a.

Accrual basis - a basis of accounting assets/equity, other than those relating to

under which transactions and other events distributions to owners.
are recognized when they occur (and not
g. Government Accounting- encompasses
only when cash or its equivalent is received
the processes of analyzing, recording,
or paid). Therefore, the transactions and
classifying, summarizing and
events are recognized in the accounting
communicating all transactions involving
records and recognized in the financial
the receipt and disposition of government
statements of the periods to which they
funds and property, and interpreting the
relate. The elements recognized under
results thereof.
accrual accounting are assets, liabilities,
net assets/equity, revenue, and expenses. h. Government Budget- is the financial plan
of a government for a given period, usually
b. Assets - are resources controlled by an
for a fiscal year, which shows what its
entity as a result of past events, and from
resources are, and how they will be
which future economic benefits or service
generated and used over the fiscal period.
potential are expected to flow to the
The government budget also refers to the
entity.
income, expenditures and sources of
c. Contributions from owners- means borrowings of the National Government
future economic benefits or service (NG) that are used to achieve national
potential that have been contributed to the objectives, strategies and programs.
entity by parties external to the entity, other
i. Liabilities - are firm obligations of the
than those that result in liabilities of the
entity arising from past events, the
entity,
settlement of which is expected to result in
d. Distributions to owners -means future an outflow from the entity of resources
economic benefits or service potential embodying economic benefits or service
distributed by the entity to all or some of its potential.
owners, either as a return on investment or
j. Net assets/equity -is the residual interest
as a return of investment.
in the assets of the entity after deducting all
e. Entity - refers to a government agency, its liabilities. ( Assets - Liabilities )
department or operating/field unit. It may
k. Revenue - is the gross inflow of economic
be referred to in this GAM as an agency.
benefits or service potential during the
f. Expenses - are decreases in economic reporting period when those inflows result
benefits or service potential during the in an increase in net assets/equity, other
reporting period in the form of outflows or than increases relating to contributions
consumption of assets or incurrence of from owners.
liabilities that result in decreases in net
l. Revenue funds - comprise all funds year construction projects which require
derived from the income of any agency of the incurrence of obligations even beyond
the government and available for the budget year.
appropriation or expenditure in accordance
d. Disbursements- are the actual amounts
with law.
spent or paid out of the budgeted amounts.

a. Allotment- is an authorization issued by

e. Final Budget- is the original budget
the DBM to NGAs to incur obligations for
adjusted for all reserves, carry-over
specified amounts contained in a legislative
amounts, transfers, allocations,
appropriation in the form of budget release
supplemental appropriations, and other
documents. It is also referred to as
authorized legislative or similar authority
Obligational Authority.
changes applicable to the budget period.
b. Appropriations - is the authorization
f. New General Appropriations- are annual
made by a legislative body to allocate funds
authorizations for incurring obligations
for purposes specified by the legislative or
during a specified budget year, as listed in
similar authority.
the GAA.
c. Approved Budget - is the expenditure
g. Obligation- is an act of a duly authorized
authority derived from appropriation laws,
official which binds the government to the
government ordinances, and other
immediate or eventual payment of a sum of
decisions related to the anticipated revenue
money. Obligation maybe referred to as a
or receipts for the budgetary period
commitment that encompasses possible
a. Automatic Appropriations- are the future liabilities based on current
authorizations programmed annually or for contractual agreement.
some other period prescribed by law, by
h. Original Budget - is the initial approved
virtue of outstanding legislation which does
budget for the budget period usually the
not require periodic action by Congress.
General Appropriations Act (GAA). The
b. Budget Information- the budgetary original budget may include residual
information consists of, among others, data appropriated amounts automatically carried
on appropriations or the approved budget, over from prior years by law. For agencies
allotments, obligations, revenues and other with authority to retain and use income, the
receipts, and disbursements. original budget also includes the budget
approved by the board of trustees/regents
c. Continuing Appropriations - are the
or any authorized body.
authorizations to support obligations for a
specific purpose or project, such as multi-
j.Supplemental Appropriations -are 3. Advice to Debit Account (ADA) - refers
additional appropriations authorized by law to an authorization issued by the the
to augment the original appropriations NGA/OU appearing in the lower portion of
which proved to be insufficient for their the List of Due and Demandable Accounts
intended purpose due to economic, political Payable - Advice to Debit Account
or social conditions supported by a (LDDAP/ADA). It serves as instruction to the
Certification of Availability of Funds (CAF) Modified Disbursement System,
from the BTr. Government Servicing Banks (MDS-GSBs) to
debit a specified amount from its available
NCA balance under regular MDS sub-
account for payment of creditors/payees
through the Expanded Modified
1. Disbursements - constitute all cash paid Disbursement Payment Scheme (EXMDPS).
out during a given period in currency (cash)
or by checks/Advice to Debit Account (ADA). 4. Expanded Modified Disbursement
It may also mean the settlement of Payment Scheme - refers to the payment
government payable/obligations by cash or procedures whereby the MDS-GSB shall pay
ADA. The disbursements are recorded by the creditors/payees not later than 48 hours
means of journal entries. but not earlier than 24 hours upon receipt
of the said document from the NGA/OU:
2. Accounts Payable - refers to valid and
legal obligations of NGAs/OUs, for which 5. Implementing Agency - refers to the
goods/services/projects have been agency to which the funds are transferred
delivered/rendered/completed and for the purpose of
accepted, regardless of the year when these prosecuting/implernenting the project.
obligations were incurred.
6. Source Agency - refers to the agency to
which the allotment has been originally
released and in whose behalf or benefit the
project will be prosecuted/implemented.

7. Project - refers to the undertaking

whether construction work, research or
training program, computer engagement or
other authorized activities which an agency
shall prosecute or implement in favor or in
behalf of another agency

8. Inter-Agency Transferred Fund - refers to

cash or money transferred to an
Implementing Agency (IA) for the Documents (BEDs), subject to compliance of
undertaking of a project by a Source Agency required documents/clearances.Releases of
(SA) in which the allotment was released. allotments for Special Purpose Funds (SPFs)
(e.g., Calamity Fund, Contingent Fund, E-
9. Modified Disbursement System (MDS)
Government Fund, Feasibility Studies Fund,
Check - refers to a check issued by
International Commitments Fund,
government agencies chargeable against
Miscellaneous Personnel Benefits Fund and
the account of the Treasurer of the
Pension and Gratuity Fund) are also covered
Philippines, which is maintained with
by SAROs.
different MDS AGDBs. MDS Checks are
coverd by NCA. 14. General Allotment Release Order
(GARO) - is a comprehensive authority
10.Modified Disbursement System,
issued to all national government agencies,
Government Servicing Banks - refers to the
in general, to incur obligations not
authorized government servicing banks,
exceeding an authorized amount during a
such as Land Bank of the Philippines (LBP),
specified period for the purpose indicated
Development Bank of the Philippines (DBP),
therein. It covers automatically
and Philippine Veterans Bank (PVB), to
appropriated expenditures common to
which DBM issues the NCAs for crediting to
most, if not all, agencies without need of
the MDS sub-accounts of NGAs.
special clearance or approval from
11. Tax Remittance Advice (TRA) - refers to competent authority, i.e. Retirement and
a serially-numbered document prescribed by Life Insurance Premium.
the DBM that should be used by the NGAs in
15. Notice of Cash Allocation (NCA) -
the remittance of withheld taxes on funds
authority issued by the DBM to central,
coming from DBM. These forms are being
regional and provincial offices and
distributed by the BIR to be accomplished
operating units to cover the cash
by the NGAs.
requirements of the agencies;
12. General Appropriations Act Release
16. Non-Cash Availment Authority (NCAA)-
Document (GAARD) - serves as the
authority issued by the DBM to agencies to
obligational authority for the
cover the liquidation of their actual
comprehensive release of budgetary items
obligations incurred against available
appropriated in the GAA, categorized as For
allotments for availment of proceeds from
Comprehensive Release (FCR).
loans/grants through supplier's
13. Special Allotment Release credit/constructive cash;
Order(SARO)- covers budgetary items under
17. Cash Disbursement Ceiling(CDC)-
For Later Release (FLR) (negative list) in the
authority issued by DBM to theDepartment
entity submitted Budget Execution
of Foreign Affairs (DFA) and Department of
Labor and Employment (DOLE) to utilize e. Entity-specific Value - is the present
their income collected/retained by value (PV) of the cash flows an entity
theirForeign Service Posts (FSPs) to cover expects to arise from the continuing use of
their operating requirements, but not to an asset and from its disposal at the end of
exceed the released allotment to the said its useful life or expects to incur when
post. settling a liability.

18. Notice of Transfer of Allocation - f. Exchange Transactions - are transactions

authority issued by the Central Office to its in which one entity receives assets or
regional and operating units to cover the services, or has liabilities extinguished, and
latter's cash requirements. directly gives approximately equal value
(primarily in the form of cash, goods,
Property, Plant and Equipment (PPE) -
services, or use of assets) to another entity
includes land; land improvements; buildings
in exchange.
and other structures; machinery and
equipment; transportation equipment; g. Fair Value - is the amount for which an
furniture, fixtures and books; leasehold asset could be exchanged or a liability
improvements; and other PPE. settled, between knowledgeable, willing
parties in an arm's length transaction.
a. Carrying Amount - is the amount at
which an asset is recognized after deducting h. Impairment Loss of a Cash-generating
any accumulated depreciation and Asset - is the amount by which the carrying
accumulated impairment losses. amount of an asset exceeds its recoverable
amount.
b. Cost - is the amount of cash or cash
equivalents paid and the fair value (FV) of i. Impairment Loss of a Non Cash-
the other consideration given to acquire an generating Asset - is the amount by which
asset at the time of its acquisition or the carrying amount of an asset exceeds its
construction. recoverable service amount.

j.Non-exchange Transactions -are

transaction where an entity either receives
c. Depreciation - is the systematic allocation
value from another entity without directly
of the depreciable amount of an asset over
giving approximately equal value in
its useful life.
exchange, or gives value to another entity
d. Depreciable Amount - is the cost of an without directly receiving approximately
asset, or other amount substituted for cost, equal value in exchange.
less its residual value.
k. Residual Value - is the equivalent to at
least five percent (5%) of the cost of an
asset that the entity would currently obtain
from disposal of the asset, after deducting cash flows expected to be derived from the
the estimated costs of disposal, if the asset continuing use of an asset and from its
were already of the age and in the disposal at the end of its useful life.
condition expected at the end of its useful
o. Value in use of a non-cash generating
life, unless a more appropriate percentage
asset the present value of the asset's
is determined by an entity based on their
remaining service potential.
operation.
p. Modes of Acquisition of PPE -
l. Recoverable Service Amount - is the
Acquisition is the process through which
higher of a non cash-generating asset's fair
one entity gains possession or takes over
value less costs to sell and its value in use.
the ownership of a particular PPE. The
m. Useful Life- is the period over which an different modes of acquiring PPE includes
asset is expected to be available for use by purchase, construction, exchange
an entity; or the number of production or transaction, non-exchange transaction,
similar units expected to be obtained from transfer and finance lease.
the asset by an entity.

n. Value in use of a cash generating asset -

the present value of the estimated future