PART IV SCHEDULES AND OTHER REPORTS
Item 13. SEC Form 17-C and Quarterly Report
11. PREPAYMENTS AND OTHER CURRENT ASSETS The breakdown of this account is as follows
12.5 Investment in an Associate
JMCI was established to provide management and technical advice, assistance and
services to commercial, manufacturing and other kinds of enterprises. As of May 31, 2018, management believed that the recoverable amount of its investment in JMCI is higher than the carrying value.
JMCI’s total assets, total liabilities, total equity and net results based on its most recent audited financial statements as of and for the year ended December 31, 2018 were P15.1 million, P2.1 million, P15.1 million and P0.2 million, respectively.
In 2019, the University divested from its interest in JMCI in favor of a certain third party for a total consideration of P147.0 million, which resulted in a gain amounting to
P139.1 million.
The gain on such transaction is presented by the University as part of Other Income (see Note 21 and 24.15).
As of May 31, 2018, management believed that the recoverable amount of its investment in JMCI is higher than the carrying value.
This account consists of the building being leased out to FECSI, and a parcel of land that is being leased out to FEUAI where its school building and campus is situated.
The gross carrying amounts and accumulated depreciation of investment properties at the beginning and end of the years ended May 31, 2020, 2019 and 2018 are shown below.
Building and
Land Improvements Total
May 31, 2020
Cost P 1,076,829,849 P 428,614,821 P 1,505,444,670 Accumulated depreciation - ( 167,988,793) ( 167,988,793 ) Net carrying amount P 1,076,829,849 P 260,626,028 P 1,337,455,877
May 31, 2019
Cost P 1,076,829,849 P 428,436,741 P 1,505,266,590 Accumulated depreciation - ( 146,564,887) ( 146,564,887 ) Net carrying amount P 1,076,829,849 P 281,871,854 P 1,358,701,703
May 31, 2018
Cost P 1,076,829,849 P 428,436,741 P 1,505,266,590 Accumulated depreciation - ( 125,143,950) ( 125,143,950 ) Net carrying amount P 1,076,829,849 P 303,292,791 P 1,380,122,640 A reconciliation of the carrying amounts of investment properties at the beginning and end of the years ended May 31, 2020, 2019 and 2018 is shown below.
Building and
Land Improvements Total
Balance at June 1, 2019, net of
accumulated depreciation P 1,076,829,849 P 281,871,854 P 1,358,701,703
Additions - 178,080 178,080
Depreciation charges for the year - ( 21,423,906) ( 21,423,906 )
Balance at May 31, 2020, net of
accumulated depreciation P 1,076,829,849 P 260,626,028 P 1,337,455,877
Balance at June 1, 2018, net of
accumulated depreciation P 1,076,829,849 P 303,292,791 P 1,380,122,640 Depreciation charges for the year - ( 21,420,937) ( 21,420,937 )
Balance at May 31, 2019, net of
accumulated depreciation P 1,076,829,849 P 281,871,854 P 1,358,701,703
Balance at June 1, 2017, net of
accumulated depreciation P 1,076,829,849 P 324,713,728 P 1,401,543,577 Depreciation charges for the year - ( 21,420,937) ( 21,420,937 ) Balance at May 31, 2018, net of
accumulated depreciation P 1,076,829,849 P 303,292,791 P 1,380,122,640
expenses, which include depreciation and amortization, insurance, and taxes and licenses incurred by the University relating to the investment properties, totaling P24.1 million, P24.4 million and P24.2 million for the year ended May 31, 2020, 2019 and 2018,
respectively, are presented as part of Depreciation and amortization, Insurance, and Taxes and licenses, respectively, under Operating Expenses in the statements of profit or loss (see Note 19).
Based on the latest appraisal report obtained from an independent appraiser, management determined that the total fair value of investment properties amounts to P3,410.5 million and P2,700.0 million as of May 31, 2020 and 2018, respectively. Management deemed that the 2018 fair value continue to exceed the carrying amount of investment property as of May 31, 2019. Information about the fair value measurement and disclosures related to investment properties are presented in Note 6.4.
The gross carrying amounts and accumulated depreciation and amortization at the beginning and end of years ended May 31, 2020, 2019 and 2018 are shown below.
Building and Furniture and Leasehold Miscellaneous Construction Right-of-use
Land Improvements Equipment Improvements Equipment in Progress Assets Total
May 31, 2020
Cost P 389,229,440 P 1,665,648,698 P 617,654,252 P 894,078,489 P 223,924,350 P 611,515,107 P 1,121,187,406 P 5,523,237,742 Accumulated
depreciation and
amortization - ( 850,739,046) ( 511,884,331 ) ( 269,822,808 ) ( 170,166,691 ) - ( 68,465,588 ) ( 1,871,078,464 ) Net carrying amount P 389,229,440 P 814,909,652 P 105,769,921 P 624,255,681 P 53,757,659 P 611,515,107 P 1,052,721,818 P 3,652,159,278
May 31, 2019
Cost P 389,229,440 P 1,608,401,168 P 560,182,007 P 888,683,959 P 187,594,083 P 350,499,280 P - P 3,984,589,937 Accumulated
depreciation and
amortization - ( 770,571,469) ( 461,844,857 ) ( 226,351,773 ) ( 156,947,144 ) - - ( 1,615,715,243 ) Net carrying amount P 389,229,440 P 837,829,699 P 98,337,150 P 662,332,186 P 30,646,939 P 350,499,280 P - P 2,368,874,694
May 31, 2018
Cost P 389,229,440 P 1,588,350,527 P 503,710,712 P 854,298,895 P 176,913,118 P 38,735,488 P - P 3,551,238,180 Accumulated
depreciation and
amortization - ( 692,549,957) ( 410,863,785 ) ( 183,949,503 ) ( 147,033,646 ) - - ( 1,434,396,891 ) Net carrying amount P 389,229,440 P 895,800,570 P 92,846,927 P 670,349,392 P 29,879,472 P 38,735,488 P - P 2,116,841,289
A reconciliation of the carrying amounts of property and equipment at the beginning and end of periods ended May 31, 2020, 2019 and 2018 is shown below.
Building and Furniture and Leasehold Miscellaneous Construction Right-of-use
Land Improvements Equipment Improvements Equipment in Progress Assets Total
Balance at June 1, 2019, net of accumulated depreciation and amortization
As previously reported P 389,229,440 P 837,829,699 P 98,337,150 P 662,332,186 P 30,646,939 P 350,499,280 P - P 2,368,874,694 Effect of PFRS 16
[see Note 2.2(a)(iv)] - - - - - - 1,121,187,406 1,121,187,406
As restated 389,229,440 837,829,699 98,337,150 662,332,186 30,646,939 350,499,280 1,121,187,406 3,490,062,100
Additions - 57,247,530 57,472,245 5,394,530 36,330,267 261,015,827 - 417,460,399
Depreciation and amortization charges
for the year - ( 80,167,577) ( 50,039,474 ) ( 43,471,035 ) ( 13,219,547 ) - ( 68,465,588 ) ( 255,363,221 )
Balance at May 31, 2020, net of accumulated depreciation and
amortization P 389,229,440 P 814,909,652 P 105,769,921 P 624,255,681 P 53,757,659 P 611,515,107 P 1,052,721,818 P 3,652,159,278
Balance at June 1, 2018, net of accumulated depreciation and
amortization P 389,229,440 P 895,800,570 P 92,846,927 P 670,349,392 P 29,879,472 P 38,735,488 P - P 2,116,841,289
Additions - 20,050,641 56,471,295 34,385,064 10,680,965 311,763,792 - 433,351,757
Depreciation and amortization charges
for the year - ( 78,021,512) ( 50,981,072 ) ( 42,402,270 ) ( 9,913,498 ) - - ( 181,318,352 )
Balance at May 31, 2019, net of accumulated depreciation and
amortization P 389,229,440 P 837,829,699 P 98,337,150 P 662,332,186 P 30,646,939 P 350,499,280 P - P 2,368,874,694
Building and Furniture and Leasehold Miscellaneous Construction Right-of-use
Land Improvements Equipment Improvements Equipment in Progress Assets Total
Balance at June 1, 2017, net of accumulated depreciation and
amortization P 312,398,552 P 966,195,855 P 96,307,735 P 625,766,119 P 30,918,162 P 12,046,536 P - P 2,043,632,959
Additions 76,830,888 7,198,083 52,809,387 72,430,242 9,377,232 38,735,488 - 257,381,320
Reclassification - - - 12,046,536 ( 12,046,536 ) - -
Depreciation and amortization charges
for the year - ( 77,593,368) ( 56,270,195 ) ( 39,893,505 ) ( 10,415,922 ) - - ( 184,172,990 )
Balance at May 31, 2018, net of accumulated depreciation and
amortization P 389,229,440 P 895,800,570 P 92,846,927 P 670,349,392 P 29,879,472 P 38,735,488 P - P 2,116,841,289
construction of its new building located in Lerma St., Sampaloc, Manila. No similar transaction occurred in 2020 and 2018 (see Notes 17 and 20.2).
As of May 31, 2020, 2019 and 2018, certain fully depreciated and amortized assets with acquisition cost of P365.2 million, P547.6 million and P450.4 million, respectively, are still being used in the University’s operations.
The table below describes the nature of the University’s leasing activities by type of ROUA recognized in the 2020 statement of financial position.
Number of Number of
Number of Average leases with leases with
right-of-use Range of remaining extension termination
assets leased remaining term lease term options options
University buildings 5 10 – 26 years 10 years 5 5
As at May 31, 2020, none of the University’s Property and Equipment are used as collateral for any of the University’s interest-bearing loans and borrowings.
Total rental income earned from the sublease of one of the University buildings amounted to P43.9 million, P41.8 million and 39.8 million, for the years ended May 31, 2020, 2019 and 2018, respectively, and is part of Other Operating Income in the statements of profit or loss.
The amount of depreciation is presented as part of Depreciation and amortization which is presented under Operating Expenses account (see Note 19).