Non-Capitalization of Major Repairs and Improvements
Department of Public Works and Highways · 2024
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What Happened?
Category: Financial ManagementIssue: Non-complianceThe DPWH expensed major repairs and improvements that should have been added to the value of the assets, so expenses were too high and asset values were too low.
Why It Matters
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Original Audit Finding Excerpt
"Review of transactions showed that the following costs of major repairs, maintenance and improvements of buildings, equipment and other PPE totaling P104,835,016.04 were recognized as outright expenses instead of capitalizing them, contrary to the above-cited accounting guideline:"