Non-capitalization of major repairs and improvements of PPE amounting to P42.55 million
Department of Public Works and Highways · 2023
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What Happened?
Category: Financial ManagementIssue: Financial ReportingMajor repairs that improve an asset beyond its original condition or extend its useful life should be recorded as an asset rather than as routine expense. DPWH initially did not capitalize P42.55 million of such work, making its asset balances understated. Many offices have since corrected the accounting entries.
Why It Matters
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Original Audit Finding Excerpt
"Non-capitalization of major repairs and improvements of infrastructure assets, buildings and other PPE – P42,551,478.06"