ANNUAL

PHILIPPINE INSTITUTE FOR DEVELOPMENT STUDIESNOTES TO FINANCIAL STATEMENTS1. GENERAL INFORMATIONThe Philippine Institute for Development Studies (PIDS), is a non-stock, non-profit government researchinstitution created under PD 1201 in September 1977. The Institute’s nature of operation/principal program/activities include, among others the following:- Provide analyses of socio-economic problems and issues to support the formulation of plans andpolicies for sustained social and economic development in the Philippines.- Establish a continuing channel of communication between policy makers and planners, on onehand, and researchers, on the other hand;- Establish a repository for economic research information and other related activities.The Institute’s principal place of business is at NEDA sa Makati Building, 106 Amorsolo Street, LegaspiVillage, Makati City.2. SIGNIFICANT ACCOUNTING POLICIESThe Institute’s financial statements have been prepared in accordance with the generally accepted stateaccounting principles in the Philippines.2.1 Errors of prior periods that are material in amount are corrected in accordance with paragraphs41 50 of Philippine Accounting Standards (PAS) no. 8, Accounting Policies, Changes in AccountingEstimates and Errors.2.2 Inventories are valued at cost using moving average method. This includes cost of unusedsupplies and materials, books, journals and working papers for various research projects for sale.2.3 Investments in bonds are measured at amortized cost using the straight- line method. Interestincome pertaining thereto and that of the investments in treasury bills are recognized on accrualbasis.2.4 Property, Plant and Equipment are carried at cost less accumulated depreciation. The straightlinemethod of depreciation is used based on the estimated useful life ranging from 5-10 years. Aresidual value computed at 10 percent ( 10%) of the cost of the asset is set and depreciationstarts on the second month after purchase. Property, Plant and Equipment acquired by externallyfundedprojects are recorded as Held in Trust. PPE not used in operations were reclassified toother assets.PIDS 2006 ANNUAL REPORT342.5 Liabilities are recognized at the time they are incurred. However, the amount of P 98,627.00pertaining to approved and served purchase orders which are part of budget utilization for theyear were not recorded as liabilities because goods/services ordered are not yet received.2.6 Income and expenses are recorded using the accrual method of accounting.2.7 Transactions in foreign currencies are recorded in Philippine Peso based on the BSP rate ofexchange at the date of transactions. At the end of the year these are revalued using the rate ofexchange at balance sheet date.