TABLE OF CONTENTS

APPRAISAL GUIDELINES...................................................................................................1
1.0 OBJECTIVES............................................................................................................1
2.0 SCOPE and LIMITATIONS.........................................................................................1
3.0 DEFINITION OF TERMS............................................................................................1
4.0 GENERAL GUIDELINES.............................................................................................3
4.1 Documentation.....................................................................................................................3
4.2 Conduct of Inspection..........................................................................................................4
4.3 Determination of Condition Rating of Property...................................................................6
4.4 Conduct of Appraisal............................................................................................................8
4.5 Determination of the Appraised Value.................................................................................9
5.0 REVISED FORMULAE ON APPRAISAL OF GOVERNMENT PROPERTIES EXCEPT REAL
ESTATE, ANTIQUE PROPERTY AND WORKS OF ART..................................................9
Illustrative Examples.......................................................................................................12
TABLES.................................................................................................................................................17
TABLE 1. COMPONENT RATING TABLES ………………………18
TABLE 2. TABLE OF ESTIMATED USEFUL LIFE OF PROPERTY, PLANT
AND EQUIPMENT 23
TABLE 3. TABLE OF PESO/DOLLAR EXCHANGE RATES...............................25
ANNEXES..............................................................................................................................................26
ANNEX A.................................................................................................................................27
ANNEX B.................................................................................................................................29
ANNEX C.................................................................................................................................30
ANNEX C1...............................................................................................................................32
ANNEX C2...............................................................................................................................35
ANNEX D.................................................................................................................................38
ANNEX E..................................................................................................................................39
ANNEX F..................................................................................................................................41

APPRAISAL GUIDELINES

1.0 OBJECTIVES

1.1 To achieve uniformity and consistency in the conduct of appraisal of

government property for disposal;

1.2 To promote facility in the computation of appraised values;

1.3 To attain more realistic valuations of property under disposal based

on the actual state or condition of properties being disposed of; and

1.4 To provide a reliable basis of ensuring that government recovers a fair

return from the disposal of its properties.

2.0 SCOPE and LIMITATIONS

These guidelines describe the general procedures in the appraisal of

government properties for disposal of National Government Agencies and
Instrumentalities, Local Government Units and Government-Owned and/or
Controlled Corporations and their subsidiaries, except works of art, antique property
and real estate. Antique property and works of art shall be appraised by the National
Museum, and real estate shall be appraised under a separate set of guidelines.
3.0 DEFINITION OF TERMS

Acquisition Cost (AC) – the price at which the property was acquired which
also includes related expenses incurred during the
acquisition/construction of the property such as taxes, license fees,
permit fees, clearance fees, etc.
Appraised Value (AV) – an opinion of an appraiser which is based upon an
interpretation of facts and beliefs into an estimate of value, as of a stated date.
Condition Factor (CF) – the adjustment factor used to consider the actual
condition of the property under appraisal thru an evaluation of the
state or condition of the major components of such property relative
to an ideally functioning model. The condition factor is usually
estimated based on the component and condition rating of the
property.
Currency Fluctuation Factor (CFF) – refers to the adjustment factor used
to take into account the devaluation or revaluation of the peso from
the year of acquisition to the year of appraisal.
Current Market Value (CMV) – is the price estimated which a property will
bring if exposed for sale in the open market, allowing a reasonable
time to find a buyer who buys with knowledge of the actual condition
and utility of the property.
Deterioration – reflecting the loss in value brought about by wear and tear,
disintegration, use in service and the action of the elements.
Economic Obsolescence – reflecting the loss in value brought about by
external economic forces, such as legislative enactments restricting or
impairing the use of subject equipment
Effective Remaining Useful Life (ERUL) – refers to the number of years
from the date of appraisal to the anticipated date that a property may
be utilized profitably.
Estimated Useful Life (EUL) – refers to the estimated period of time (years)
for which a property is anticipated to be useful assuming normal
utilization. See Table 2 for Table of Estimated Useful Life.
Functional Obsolescence – reflecting loss in value due to functional
inadequacy or over adequacy due to size, style or age brought about
by changes in art or poor planning.
Junk/Scrap Value – the price of scrap/junk metal or lumber prevailing in
the local market.
Locally Manufactured Properties – refers to the properties which are one
hundred percent (100%) sourced locally and no part of which is
imported from other countries.
Price Index Factor (PIF) – refers to the adjustment factor which reflects the
changes that occur in the prices of commodities, raw materials,
manufactured goods and the like from the year of manufacture to the
year of appraisal. (Source: National Statistics Office]
Replacement Cost New (RCN) – the cost of construction at current prices of
a property having a utility equivalent to the property being appraised
but built with modern materials and according to current standards,
design and layout. The use of the replacement cost concept
presumably eliminates all functional obsolescence, and the only
depreciation to be measured is physical deterioration and economic
obsolescence.
Salvage Value – the amount that could be realized from the sale of a
component/part of an asset to be removed for use, wholly or in part,
elsewhere.
Sound Value – a measure of value widely used by valuers and appraisers, is
derived from replacement cost new (RCN), adjusted to the observed
condition of the property for appraisal.

2
4.0 GENERAL GUIDELINES

4.1 Documentation
4.1.1 Before the appraiser commences the inspection of property to be
appraised, he has to check whether the corresponding form for
disposal has been properly accomplished. The forms used for
disposal are:

a) Inventory and Inspection Report of Unserviceable Property

(Annex A)

This form is used for the disposal of vehicles, office equipment,

furniture, and other properties, plant and equipment which can no
longer be repaired or reconditioned and whose maintenance cost of
repair outweighs or is more than the benefits and services that will be
derived from its continued use. When accomplished, this form
should contain the list of valuable parts of the article or equipment
which possesses intrinsic value or which may be useful in making
repairs to other articles or equipment. This form should also contain
the list of missing parts, if any, which should be accompanied by a
certification of the property officer or custodian as to whether the
missing parts were removed for future stock or have been utilized
already for repair purposes.

b) Waste Materials Report (Annex B )

This form shall be used to report all waste materials previously

taken up in the books as assets so that they may be properly
disposed of and dropped from the accounts.

This form is used in the disposal of waste materials which result

from the consumption or utilization of expendable materials, and
covers damaged equipment parts, empty containers, and remnants
salvaged from destroyed or damaged property, plant and equipment.

4.1.2 The appraiser shall likewise accomplish the Checklist for

Unserviceable Equipment. This Checklist for Unserviceable
Equipment shall indicate the individual component/part of the
equipment with their condition, whether serviceable, unserviceable,
missing, etc. The agency could device their own form most
appropriate to the equipment for appraisal. (See Annex C and D for
the Checklist for Unserviceable Equipment)

4.1.3 If the property to be appraised is no longer available for

inspection, as in the case of lost or burned equipment for which
accountability is being assessed, the appraiser shall forego the ocular
inspection, and proceed to the next succeeding appraisal step.

4.2 Conduct of Inspection

In the conduct of the inspection of the property to be appraised, the

appraiser shall perform the following, where applicable:

4.2.1 Identify the property in accordance with its descriptions in the

inventory list or directive.

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4.2.2 Verify stated ratings, capacity, model, year of manufacture, serial
number, chassis number, motor number and other technical
specifications, and accessories, if any.
4.2.3 Determine the correct date when property has been acquired or its
present age/number of years property has been actually used or
operated.
4.2.4 Check the condition of the property; determine whether operational,
under repair, or irreparable.
4.2.5 Check for the damaged, worn-out or missing parts. Careful
determination of its present physical condition shall serve as
basis for its depreciation and correct evaluation/valuation.
4.2.6 Determine if property is economically repairable and the most
probable cost of its repairs, and current cost of spare parts.
4.2.7 Determine the extent of use, mileage, rate of depreciation, and
any excessive wear and tear.
4.2.8 Determine quality or degree of maintenance, repair, restoration
or upgrading made, check logbook, if available.
4.2.9 See if property is obsolete or is still being manufactured and if spare
parts are still procurable in the market. If property is found obsolete,
appraise the property as junk.
4.2.10 Determine whether property still has market demand; or the existence
of probable buyers in the locality.
4.2.11 See if property is sheltered or exposed to elements and theft.
4.2.12 Inspect the location of the properties and the available facilities for its
transportation.
4.2.13 If property is to be disposed of as junk, determine parts which could be
salvaged or profitably used such as engine, dynamo, wheels, tires,
axles, body/chassis, etc. of motor vehicles.

These salvaged parts could either be transferred to or used by other

equipment or shall serve as its spare or standby parts.

In cases where there are no equipment which could make use of

these salvaged parts, determine if there are available buyers of these
parts and if disposing them separately from the equipment would
bring the best returns to the agency.

The objective of the inspection is to supplement theoretical

computations of value with first hand observation of the condition of
the property. The depreciation mentioned here refers to observed
depreciation to distinguish the results of personal inspection from
those of theoretical estimates.

4.3 Determination of Condition Rating of Property

4.3.1 The condition rating of the property is obtained based on the

following:

4
Very Good (VG) – This term describes a property in excellent
(80-100%) condition capable of being used to its fully
specified utilization for its designed
purpose without being modified and not
requiring any repairs or abnormal
maintenance at the time of inspection or
within the foreseeable future

Good Condition (G) – This term describes a property which has

(55-75%) been modified or repaired and is being used
at or near its fully specified utilization, but
the effects of age and/or utilization indicate
that some minor repairs have to be made or
that the item may have to be used to some
slightly lesser degree than its fully specified
utilization in the foreseeable future.

Fair Condition (F) – This term describes a property which is

(35-50%) being used at some point below its fully
specified utilization because of the effects of
age and/or utilization and which require
general repairs and some replacement of
minor elements/components in the
foreseeable future to raise its level of
utilization to or near their original
specifications.

Poor Condition (P) – This term is used to describe a property

(15-30%) which can only be used at some point well
below its fully specified utilization and it is
not possible to realize full capability in its
current condition without extensive repairs
and/or replacement of major elements in
the very near future.

5
 Scrap Condition (S) – This term is used to describe a property
(0-10%) which is no longer serviceable and which
cannot be utilized to any practical degree
regardless of the extent of the repairs or
modifications to which they may be
subjected (beyond economical repair). This
condition is for properties which have used
up 100 percent of their useful life or which
are 100 percent technologically ,
functionally, economically or statutorily
obsolete

The above Guidelines in Observing Condition of Property were adopted from

the American Appraisal Company, Michigan, and U.S.A.
4.3.2 The gap in percentage allocation is aimed at delineating the factors
between condition categories. The 4% difference in each case clearly
sets the limits of percentage range.

4.3.3 The percentage range within each category allows the appraiser some
discretion in assigning a percentage based on his observation.

4.3.3 The condition rating is the weighted average of the individual

component rating.

- For furniture and non-mechanized implements which have no

major components but are treated as a whole unit, condition
factor shall be equal to the condition rating of the unit itself.

Example:

Condition Rating - Very Good

Condition Factor - 0.8 to 1.0

- With respect to vehicles, mechanized equipment, etc. which are

made up of several components, the condition factor is the sum
of condition rating x % weight for all components. See Table 1
for the component rating of vehicles, heavy equipment, window
type air-conditioning unit, manual typewriter and dental
equipment. These component ratings were derived from the
price of each component in relation to the total price of the
property expressed in percentages.

- In the case of property which is no longer available for

inspection, as in the case of lost or burned equipment for which
accountability is being assessed, the condition factor shall be
assumed to be 1.0.

4.4 Conduct of Appraisal

The Appraisal Process in general consists of:

4.4.1 conducting an ocular inspection of the property to be appraised to

assess its physical condition and to determine condition rating.

6
4.4.2 seeking reference price information such as:
- acquisition cost, or
- current market price of similar property, or
- replacement cost for a similar new property;
- prices from second hand rebuilders and reconditioners of
machinery, cars or equipment;
- currency exchange rates for acquisition year and current year.

4.4.3 computing the appraised value by following the revised formulae

on appraisal of government properties except real estate, antique
property and works of art contained in Section 5.0 hereof, which
will take into account the:
- property’s actual physical condition,
- the relevant reference price information,
- expected useful life of the property, and
- the changes in the value of the property caused by depreciation,
obsolescence, and those caused by changes in the value of the
exchange currency, the peso, and also appreciation in the value of
the property occasioned by the reconditioning, major repair or
upgrade of the property as well as favorable changes in the
exchange value of the Philippine peso.

4.5 Determination of the Appraised Value

4.5.1 Unserviceable property which can no longer be repaired or

reconditioned and waste materials shall be appraised at scrap or junk
value.

4.5.2 For unserviceable property which can still be repaired or reconditioned,

and property no longer needed which are still functional, shall be
appraised based on the following:

4.5.2.1 It shall be appraised on the Current Market Value

(CMV), if such is available.

4.5.2.2 If CMV is not available, it shall be appraised at its

Replacement Cost New (RCN).

4.5.2.3 If CMV and RCN are both not available, the property
shall be appraised at its Acquisition Cost (AC). If the
property at the time of acquisition is “brand new”,
adjust against observed condition at the time of
appraisal. If the property was acquired “second hand,”
condition at date of acquisition must be defined before
any adjustment is made.

4.5.3 The determination of Salvage Value of component/part of an asset

found to be serviceable shall be based on the hierarchy under 4.5.2
above.

4.5.4 For imported vehicles/mechanized equipment, each component that

has no available local replacement shall be treated as junk exclusive
of the other components which are available in the domestic market.

7
5.0 REVISED FORMULAE ON APPRAISAL OF GOVERNMENT PROPERTIES
EXCEPT REAL ESTATE, ANTIQUE PROPERTY AND WORKS OF ART

5.1 When property is still operational/functional or can be repaired:

5.1.1 When Current Market Value of a comparable property is

available

CF 1
AV = CMV x
CF 2

where:

AV – Appraised Value
CMV – Current Market Value
CF1 – Condition Factor of the Property being
appraised
CF2 – Condition Factor of the Advertised/ Canvassed
Property

When CMV, RCN and AC are all available, CMV shall be

adopted in the computation of the Appraised Value. The CMV
shall be taken from advertised prices of used equipment of the
same make and model or similar models from newspapers,
publications of associations, etc. of general circulation. There
should at least be two (2) advertised prices for similar properties,
the lowest of which shall be considered as CMV in the
computation of the AV.

5.1.2 When Replacement Cost-New is available - this formula shall

only apply if CMV is not available.
a. When the Estimated Useful Life (EUL) of the property is
available

ERUL
AV = RCN x

EUL
where:
RCN – Replacement Cost - New
ERUL – Effective Remaining Useful Life
EUL – Estimated useful Life (Table 2)

b. When the Estimated Useful Life (EUL) of the property is not

available
AV = RCN x CF
where:

RCN – Replacement Cost - New

CF – Condition Factor of the Property
being appraised
5.1.3 When Acquisition Cost (AC) is available, the cost indicated in
the Property Acknowledgement Receipt (PAR) shall be
recognized as AC if the Purchase Order/Invoice are no longer
available. However, if the PAR indicates, among others, that

8
 the property acquired is “second hand” (not brand new), the
appraiser shall consider the additional expenses incurred, if
any, for the reconditioning/rehabilitation of said property.
a. For Imported Properties

AV = (AC x CFF) x CF
where:
AC – Acquisition Cost

CFF – Currency Fluctuation Factor

P/dollar exchange rate on year of

appraisal
CFF =
P/dollar exchange rate on year of
acquisition

CF – Condition Factor of the Property

b. For locally Manufactured Properties - this formula shall

apply to properties which are one hundred percent 100%
sourced locally and no part of which is imported. (Ex.
Furniture, steel cabinets, etc.)

AV = (AC x PIF) CF
where:

PIF – Price Index Factor

Price Index on year of Appraisal

PIF =
Price Index on year of Acquisition

(Source of Price Indices : National Statistics Office, NSO)

5.2 For waste materials and property which are unserviceable and can no
longer be repaired/reconditioned - the end user shall determine the
unserviceability of the property and shall be supported with the
History Card/record and Checklist of Unserviceable Vehicles/Heavy
Equipment.
AV = Junk Value

where Junk Value is based on prevailing price of scrap

metal or lumber, whichever is appropriate.

Canvass for the current market price per unit weight and
multiply by the actual weight of the waste materials/property to get
the appraised value.
Computers and their peripherals shall be appraised based on
their junk value due to obsolescence brought about by the rapid
change and development in the industry.

Illustrative Examples
A. When Current Market Value (CMV) of a comparable property is available
Given: Based on the data contained under the Inventory and
Inspection Report of Unserviceable Property (Annex A1)

9
Property Description:

Mitsubishi L-200 D/Cab Pick-up, Diesel Fed Model 1995, Silver Gray,
Loaded, w/Stepboard & Bedliner
Plate No. UFC 963, Engine No. 4D56A-D5940
Chassis No. K14TJUNSL-010751
Acquisition Date: AD = December 16, 1995
Acquisition Cost: AC = P495,000.00
Date of Appraisal: June 26, 2000
Solution:
CF1
AV = CMV x
CF2
CMV = P209,000.00
Advertised Prices (similar brand and year model from Used
Car Dealers):
a) P209,000.00
b) P260,000.00
c) P285,000.00
CF1 = Condition Factor of subject property

CF2 = Condition Factor of comparable property

CF1 (see attached check list of subject property, Annex C1)
Component % Weight CF
Engine 23 0.80 = 0.1840
Transmission 7 0.90 = 0.0630
Differential 5 0.90 = 0.0450
Body/Chassis 35 0.75 = 0.2625
Others 30 0.75 = 0.2250
Total: 0.7795

CF2 (see attached check list of comparable property, Annex C2)

Component % Weight CF
Engine 23 0.60 = 0.1380
Transmission 7 0.85 = 0.0595
Differential 5 0.85 = 0.0425
Body/Chassis 35 0.70 = 0.2450
Others 30 0.40 = 0.1200
Total: 0.6050

Thus:
0.7795
AV = (P209,000.00) = P269,282.00
0.6050
B. When Replacement Cost New (RCN) is available
1) When the Estimated Useful Life (EUL) of the property is
available
Given: Same vehicle/property used in the above CMV method
Solution: To determine RCN of the vehicle under appraisal:
The cost of brand new engines for the vehicle available in the
market is P100,000.00/unit. Therefore:
Component %

10
 weight
0.23(P100,000.00)
Engine 23 = = P 100,000.00
0.23
0.07(P100,000.00)
Transmission 7 = = 30,435.00
0.23
0.05(P100,000.00)
Differential 5 = = 21,739.00
0.23
0.35(P100,000.00)
Body/Chassis 35 = = 152,174.00
0.23
0.30(P100,000.00)
Others 30 = = 130,435.00
0.23
434,783.00
say: 435,000.00
Add Cost of Assembly,OCM: 65,000.00
RCN = P 500,000.00
Note: If there are available price data in the market for the other components,
use the market data of said components rather than the ratio and
proportion applied above.

Component % weight ERUL EUL

Engine 23 6 7 = 0.1971
Transmission 7 6 7 = 0.0600
Differential 5 6 7 = 0.0430
Body/Chassis 35 5 7 = 0.2500
Others 30 5 7 = 0.2140
0.7641
AV = (P500,000.00) 0.7641
AV = P382,050.00
2) When the Estimated Useful Life (EUL) of the property is not available
Given: Same vehicle/property used in the above CMV Method
Solution:

AV = RCN x CF
where:

RCN = P500,000.00 (from B.1 above)

CF = 0.7795 (from CMV Method above)

AV = P500,000.00 x 0.7795

AV = P389,750.00
C. When Acquisition Cost (AC) is available

For imported properties: Acquisition Cost Method

AV = AC x CFF x CF

where:

CFF = Currency Fluctuation Factor

11
 = P/$ exchange rate on year of appraisal
P/$ exchange rate on year of acquisition

40
= = 1.56
25.7144

CF = 0.7795

AV = (P495,000.00) (1.56) (0.7795)

AV = P601,930.00

D. Other Cases:

1) When the property/subject vehicle is lost for which

accountability is being assessed

CF1
AV = CMV x
CF2
1
AV = P209,000.00 x
0.6050

where : CF1 = 1 (condition factor when subject property is lost

under sec. 4.1.3)
AV = P345,455.00
2) When the component, such as engine unit, of the above vehicle
under appraisal is missing/salvaged:

0.7795 – 0.1840
AV = (P209,000.00)
0.6050

0.5955
AV = (P209,000.00)
0.6050

AV = P205,719.00
where:

0.1840 = over-all CF of the engine unit of the subject

vehicle

3) When the engine unit is beyond economic repair and is

considered junk/scrap:

CF1 – 0.1840
AV = CMV x + junk value of the
CF2 engine unit

where:

junk value = Estimated weight scrap/junk value

engine unit of Engine of metal as canvassed

12
 = 500 kilos (P5.00)

junk value = P 2,500.00

engine unit

where:
P5.00 = prevailing market value of metal

0.5955
AV = (P209,000.00) + P2,500.00
0.6050

= P205,719.00 + P2,500.00

AV = P208,219.00

13
TABLES
TABLE 1. COMPONENT RATING TABLES

(Source: NIA; Bureau of Equipment; USIPHIL; Monark; Maxima)

Type %

A. VEHICLES
Engine 23
Body and Chassis 35
Transmission 7
Differential 5
Others 30

B. PASSENGER BUS
Body and Chassis 41
Engine 25
Transmission 7
Differential 5
Others 22

C. HEAVY EQUIPMENT
Grader
Body and Chassis 35
Engine 25
Transmission 20
Others 20

Bulldozer
Body and Chassis 35
Engine 25
Differential 11
Transmission 8
Others 21

Dump Truck 6 Wheeler 10 Wheeler

Body and Chassis 35 25
Engine 25 19
Differential 11 14
Transmission 8 9
Others 21 33

15
 Type %

Concrete Mixer
Engine 45
Mixing Drum 35
Body/Chassis/spring/tires/etc. 20

Crane Crawler
Engine 25
Upper Machinery 30
Track group 25
Body/chassis 10
Others, boom bucket, acc. 10

Crane Truck Mounted

Engine (2) 35
Upper Machinery 25
Track group 20
Body/chassis 10
Others, boom bucket, acc. 10

Loader with Backhoe

Engine 25
Transmission 20
Body Chassis 30
Bucket, backhoe, tires & hydraulic 25

Loader Wheel Crawler

Engine 25 30
Transmission 20 25
Body Chassis 35 15
Bucket, tires, hydraulic 20 30

Excavators/Backhoe
Engine 25
Hydraulic System 25
(cyl., valves, hose, pipings)
Track group 25
Body, frame, arms & boom 25
others, bucket, etc.

Farm Tractor
Engine 30
Transmission 25
Body Chassis 20
Others, tires & attachment 25

16
 Type %

Truck Tractor
Engine 30
Transmission 10
Differential (tandem) 10
Body Chassis 25
Others, tires, spring, elect., etc. 25

Trailer for Jeep

Body, chassis 80
Wheel, tires, axle 20

Trailer for Truck Tractor 25 tons Capacity

Body Chassis 60
Wheel, tires, axle 40

Road Roller 1 Drum 2 Drum Pneumatic Roller

Engine 50 40 40
Transmission 20 20 25
Drum 15 25 20 (Tire)
Body Chassis 15 15 15

Roller Vibratory
Engine 40
Transmission 20
Drum 25 (including hydraulic system)
Body Chassis 15

Tractor Crawler
Engine 30
Transmission Steering (Front Drive) 25
Track group 30
Body Chassis/dozer 15

Forklift
Engine 35
Transmission 10
Body/Chassis 25
Hydraulic, Tires & 30
Others

D. AIRCONDITIONING UNIT (WINDOW)

Compressor 41
Condenser 14
Evaporator 12
Fan Motor 20
Filter/Drier 3
Others 10

17
 Type %

E. TYPEWRITER (MANUAL)
Carriage Assembly 48
Type Basket Mechanism 35
Keyboards 11
Others 6

F. DENTAL EQUIPMENT
Dental Unit & Chair 62
Air Scaler 14
Air Motor 14
Compressor ¼ HP 5
High Speed 3
Dental Stool 2

G. MOTORCYCLE
Engine 23
Clutch, transmission, 35
sprocket & chain
Body/Chassis, shock 30
absorber & tank
Others, wheel tires, 12
electrical

H. OTHERS

Concrete Vibrator
Engine 85
Vibrator 15

Pump
Engine 65
Pump 35

Generating Set
Engine 60
Generator 40

Welding Machine
Engine 60
Generator 40

18
 Type %

Air Compressor
Engine 50
Compressor 30
Body & Others 20

Chainsaw
Engine 80
Saw, etc. 20

Computers, tools and devices, furniture and fixtures are

appraised based on their scrap value, thus, component rating is not
applicable.

19
TABLE 2. TABLE OF ESTIMATED USEFUL LIFE OF PROPERTY,
PLANT AND EQUIPMENT per COA Circular No. 2003-
007 dated December 11,2003

TABLE OF ESTIMATED USEFUL LIFE

OF PROPERTY, PLANT AND EQUIPMENT

Estimated
Useful
Property, Plant and Equipment
Life (in
years)
Land Improvements
· Land Improvements 10
· Runways/taxiways 20
· Railways 40
Electrification, Power and Energy
· Structures 10
Buildings - those that are predominantly
· Wood 10
· Mixed 20
· Concrete 30
Leasehold Improvements (Note I)
· Land 10
· Building
· Wood 10
· Mixed 20
· Concrete 30
Office, Equipment, Furniture and Fixtures
· Office Equipment 5
· Furniture and Fixtures 10
· IT Equipment-Hardware 5
· Library Books 5
Machineries and Equipment
· Machineries 10
· Agricultural, Fishery and Forestry 10
· Airport Equipment 10
· Communication Equipment 10
· Construction and Heavy Equipment 10
Firefighting Equipment and
· Accessories 7
· Hospital Equipment 10
· Medical, Dental and Laboratory Equipment 10
Military and Police
· Equipment 10
· Sports Equipment 10
· Technical and Scientific Equipment 10

20
 · Other Machineries and Equipment 10
Transportation Equipment
· Motor Vehicles 7
· Trains 10
Aircraft and Aircraft Ground
· Equipment 10
· Watercrafts 10
· Other Transportation Equipment 10
Other Property, Plant and
Equipment 5

Note
I- The estimated useful life shall depend on the length of the lease.
It shall be the period of the lease or the estimated useful life of
the assets, as given, whichever is shorter.

21
TABLE 3. TABLE OF PESO/DOLLAR EXCHANGE RATES

YEAR PESO/DOLLAR

1962 …………………………………………………… 3.8081

1963 …………………………………………………… 3.8997
1964 …………………………………………………… 3.8998
1965 …………………………………………………… 3.9009
1966 …………………………………………………… 3.8954
1967 …………………………………………………… 3.9152
1968 …………………………………………………… 3.9158
1969 …………………………………………………… 3.9191
1970 …………………………………………………… 3.0246
1971 …………………………………………………… 3.4317
1972 …………………………………………………… 3.6748
1973 …………………………………………………… 3.7562
1974 …………………………………………………… 3.7878
1975 …………………………………………………… 3.2478
1976 …………………………………………………… 3.4402
1977 …………………………………………………… 3.4432
1978 …………………………………………………… 3.3781
1979 …………………………………………………… 3.3776
1980 …………………………………………………… 3.5113
1981 …………………………………………………… 3.8995
1982 …………………………………………………… 3.5399
1983 …………………………………………………… 14.0010
1984 …………………………………………………… 18.0000
1985 …………………………………………………… 19.0000
1986 …………………………………………………… 20.4360
1987 …………………………………………………… 20.6000
1988 …………………………………………………… 21.0947
1989 …………………………………………………… 22.3351
1990 …………………………………………………… 28.0000
27.89, 27.4786
1991 …………………………………………………… 25.3451
1992 …………………………………………………… 27.0940
1993 …………………………………………………… 26.9514
1994 …………………………………………………… 25.7144
1995 …………………………………………………… 26.2157
1996 …………………………………………………… 34.2410
1997 …………………………………………………… 34.8081
1998 …………………………………………………… 40.8931
1999 …………………………………………………… 39.0890
2000 …………………………………………………… 44.1938
2001 …………………………………………………… 50.9927
2002 …………………………………………………… 51.6040
2003 ……………………………………………………

22
ANNEXES
ANNEX A

24
 INVENTORY AND INSPECTION REPORT OF UNSERVICEABLE PROPERTY
(IIRUP)

INSTRUCTIONS

A. This report shall be accomplished as follows: B. The "INVENTORY" portion shall be accomplished by the Property
1. As of - period covered by the report Unit. While the "INSPECTION" portion shall be accomplished by a
2. Letter Head and logo of the agency Technical Inspector where technical knowledge is needed for the
3. Fund - fund name/code
determination of the true condition or appraised value of the property
4. INVENTORY:
a. Date Acquired - date of acquisition and to be witnessed by member of a committee created for that
b. Particulars - a brief description of the Property, Plant and Equipment purpose.
(PPE) C. The assets shall remain in the books until these are sold/disposed.
c. Property No. - assigned property number by the Property Custodian D. When the property is sold, this report, together with the sales report
d. Quantity - quantity of PPE
e. Unit Cost - unit cost of the PPE
and other supporting documents shall serve as basis in preparing the
f. Total Cost - quantity multiplied by the unit cost of the PPE JEV to drop the assets from the books.
g. Accumulated Depreciation - total amount of depreciation charged to the E. All Property Acknowledgement Receipt (PAR) covering the PPE
PPE
shall be cancelled so that the end user shall be relieved from his/her
h. Net Book Value - the difference between the total cost of the PPE less
the accumulated depreciation accountability over the property.
i. Remarks - brief information on the condition of the property F. The report shall be prepared in two (2) copies by the Property
j. Certified Correct by/Date - name and signature of the Property Officer/
Custodian who prepared the report/date of the report
Officer/Custodian and serves as a basis for preparing a JEV to adjust
k. Verified by/Date - name and signature of the Head of the Accounting Unit the accounts affected. This shall be distributed as follows:
who verified the propriety of the Unit Cost, Total Cost, Accumulated
depreciation and Net Book Value/date when verified Original - Accounting Unit
5. INSPECTION:
a. Appraised Value - appraised value of the PPE 2nd copy - Property Officer's/Custodian's file
b. Disposition - different modes of disposing the PPE such as sale, donation
destruction, etc.
c. Remarks - additional information on the condition of the property
inspected
d. Inspected by/Date - name and signature of the inspector and the date of
inspection
e. Witnessed by/Date - name and signature of the witness/date when
witnessed
page 2/2
25
ANNEX B

WASTE MATERIALS REPORT

_______________________________________
Agency
Place of Storage: Date:
ITEMS FOR DISPOSAL
ITEMS RECORD OF SALES
FOR QTY. UNIT DESCRIPTION
DISPOSAL O.R. No. Amount
1
2
3
4
5
6
7
8
9
10
TOTAL
Certified Correct: Disposal Approved:
_________________________________ ____________________________________
Property Officer
CERTIFICATE OF INSPECTION
I hereby certify that the property enumerated above was disposed of as follows:

Destroye
Item d
Item Sold at private sale
Item Sold at public auction
Item Transferred without cost to _________

Property Inspector: (Name and Signature) Witness to disposition:

26
ANNEX C
CHECKLIST FOR UNSERVICEABLE EQUIPMENT:
VEHICLES/HEAVY EQUIPMENT
Equipment Description/Type____________________Prop.No.__________
Unit Serial No._________________________Engine Serial No. __________
Acquisition Cost_____________________________Date__________________
Date Reported as Unserviceable ____________________________________

LEGEND:
S = Serviceable X = Unserviceable
M = Missing NA = Not Applicable
ENGINE: SUSPENSIONS:
Operating Condition FrontSpringAssembly
Injection Pump Assembly RearSpringAssembly
Injection/Nozzle Assy.
Fuel Pump Assembly WHEELS:
Cylinder Head Assembly
Water Pump Assembly Tires Front
Radiator Assembly Tires Rear
Air Cleaner Assembly Spare Tire
Carburetor Assembly
Governor Assembly PROPELLER SHAFT ASSY.:
Turbo Charger
Oil Cooler Assembly Front
No. of Cylinders Rear
ELECTRICAL DIFFERENTIAL ASSY.:
Generator/Alterator Front
Assembly Rear
Starter Assembly
Voltage Regulator Assy. FINAL DRIVE
Solenoid Assembly
Ignition Coil Assy. Sprocket Assembly
Magneto Drive Chain
Distributor Assembly
2/cap , rotor UNDERCARRIAGES:
Wiper Assembly
Headlight Assembly Track Link Assembly
Stop & Tail Light Assy. Idler Assembly
Directional Light Assy. Track Adjuster Assy.
(front & rear) Track Roller Assy.
Battery Carrier Roller Assy.
CLUTCH ASSEMBLY TORQUE CONVERTER
CUSHIONS: BODY/CAB/FENDERS

27
Front Seat CHASSIS/FRAME
Rear Seat WINDSHIELD
Operator’s Seat FUEL TANK ASSEMBLY
GAUGES: HYDRAULIC SYSTEM:
Hour/Service Meter Hydraulic Pump Assembly
Speedometer Hydraulic Motor Assembly
Tachometer Hydraulic Hoses
Temperature Gauges Control Valve Assembly
(water) Hydraulic Cylinders
Oil Pressure Gauges
Converter oil Temperature TRANSMISSION ASSEMBLY
Gauges TRANSFERCASE ASSEMBLY
BRAKE SYSTEM: WINDSHIELD
Master Cylinder Assembly FUEL TANK ASSEMBLY
STEERING SYSTEM:
Power Steering System
Steering Clutch Assembly with Disc Plate & Brake Lining
ACCESSORIES:
Dozer/Blade Assembly Riper Assembly
Cutting Edges End Bits
Dragline Bucket Clamshell Bucket
Backhoe Bucket Ditching Bucket
Fairlead assembly Tagline Assembly
(for crane) (for crane)
Compressor Cables
Boom Assembly Boom Pulley
Lifting Block Others
REMARKS:

Inspected by:

(NAME)

(DESIGNATION)

28
ANNEX C1

CHECKLIST FOR UNSERVICEABLE EQUIPMENT:

VEHICLES/HEAVY EQUIPMENT
Equipment Description/Type Mitsubishi L-200 Prop.No. Plate No. UFC - 963
Unit Serial No. K14TJUNSL-010751 Engine Serial No. 4D56-D5940
Acquisition Cost P 495,000.00 Date December 16, 1995
Date Reported as Unserviceable _____________________________________

LEGEND:
S= Serviceable X = Unserviceable
M= Missing NA = Not Applicable

ENGINE: SUSPENSIONS:

Operating Condition S FrontSpringAssembly S

Injection Pump
Assembly S RearSpringAssembly S
Injection/Nozzle Assy. S
Fuel Pump Assembly S WHEELS:
Cylinder Head Assembly S
Water Pump Assembly S Tires Front S
Radiator Assembly S Tires Rear S
Air Cleaner Assembly S Spare Tire S
Carburetor Assembly NA
Governor Assembly NA PROPELLER SHAFT ASSY.:
Turbo Charger NA
Oil Cooler Assembly NA Front NA
No. of Cylinders 4 Rear S

ELECTRICAL DIFFERENTIAL ASSY.:

Generator/Alterator Front NA
Assembly S Rear S
Starter Assembly S
Voltage Regulator Assy. S FINAL DRIVE
Solenoid Assembly NA
Ignition Coil Assy. NA Sprocket Assembly NA
Magneto NA Drive Chain NA
Distributor Assembly
2/cap , rotor NA UNDERCARRIAGES:
Wiper Assembly S
Headlight Assembly S Track Link Assembly NA
Stop & Tail Light Assy. S Idler Assembly NA

29
Directional Light Assy. Track Adjuster Assy. NA
(front & rear) S Track Roller Assy. NA
Battery S Carrier Roller Assy. NA
CLUTCH ASSEMBLY S TORQUE CONVERTER NA
CUSHIONS: BODY/CAB/FENDERS S
Front Seat S
Rear Seat S WINDSHIELD (Front) S
Operator’s Seat S FUEL TANK ASSEMBLY NA
GAUGES: HYDRAULIC SYSTEM:
Hour/Service Meter NA Hydraulic Pump Assembly NA
Speedometer S Hydraulic Motor Assembly NA
Tachometer NA Hydraulic Hoses NA
Temperature Gauges Control Valve Assembly NA
(water) S Hydraulic Cylinders NA
Oil Pressure Gauges S
Converter oil Temperature TRANSMISSION ASSEMBLY S
Gauges NA
TRANSFERCASE ASSEMBLY
NA
BRAKE SYSTEM: WINDSHIELD (rear) S
Master Cylinder
Assembly S FUEL TANK ASSEMBLY S

STEERING SYSTEM:
Power Steering System S
Steering Clutch Assembly with Disc Plate & Brake Lining S

ACCESSORIES:
Dozer/Blade Assembly NA Riper Assembly NA
Cutting Edges NA End Bits NA
Dragline Bucket NA Clamshell Bucket NA
Backhoe Bucket NA Ditching Bucket NA
Fairlead assembly Tagline Assembly
(for crane) NA (for crane) NA
Compressor NA Cables NA
Boom Assembly NA Boom Pulley NA
Lifting Block NA Others NA

30
REMARKS:
Fuel Injection Assy - for minor overhaul
Left Rear Side & Rear Bumper - with dents and scratches
Body of unit needs paint wash-over
Odometer Reading = 69,000 kms
Inspected
by:

JUAN DELA CRUZ

(NAME)

Sr. TAS
(DESIGNATION)

31
ANNEX C2

CHECKLIST FOR UNSERVICEABLE EQUIPMENT:

VEHICLES/HEAVY EQUIPMENT
Equipment Description/Type L-200 1995 Model Prop.No. Plate No. UDR - 680
Unit Serial No. K14TYPSDE-839716 Engine Serial No.4D56-D6785
Acquisition Cost P 495,000.00 Date October 19, 1995
Date Reported as Unserviceable __Comparable Property_____

LEGEND:
S= Serviceable X = Unserviceable
M= Missing NA = Not Applicable

ENGINE: SUSPENSIONS:

Operating Condition S FrontSpringAssembly S

Injection Pump
Assembly S RearSpringAssembly S
Injection/Nozzle Assy. S
Fuel Pump Assembly S WHEELS:
Cylinder Head Assembly S
Water Pump Assembly S Tires Front S
Radiator Assembly S Tires Rear S
Air Cleaner Assembly S Spare Tire S
Carburetor Assembly NA
Governor Assembly NA PROPELLER SHAFT ASSY.:
Turbo Charger NA
Oil Cooler Assembly NA Front NA
No. of Cylinders 4 Rear S

ELECTRICAL DIFFERENTIAL ASSY.:

Generator/Alterator Front NA
Assembly S Rear S
Starter Assembly S
Voltage Regulator Assy. S FINAL DRIVE
Solenoid Assembly NA
Ignition Coil Assy. NA Sprocket Assembly NA
Magneto NA Drive Chain NA
Distributor Assembly
2/cap , rotor NA UNDERCARRIAGES:
Wiper Assembly S
Headlight Assembly S Track Link Assembly NA
Stop & Tail Light Assy. S Idler Assembly NA

32
Directional Light Assy. Track Adjuster Assy. NA
(front & rear) S Track Roller Assy. NA
Battery S Carrier Roller Assy. NA
CLUTCH ASSEMBLY S TORQUE CONVERTER NA
CUSHIONS: BODY/CAB/FENDERS S
Front Seat S
Rear Seat S WINDSHIELD (Front) S
Operator’s Seat S FUEL TANK ASSEMBLY NA
GAUGES: HYDRAULIC SYSTEM:
Hour/Service Meter NA Hydraulic Pump Assembly NA
Speedometer S Hydraulic Motor Assembly NA
Tachometer NA Hydraulic Hoses NA
Temperature Gauges Control Valve Assembly NA
(water) S Hydraulic Cylinders NA
Oil Pressure Gauges S
TRANSMISSION ASSEMBLY
Converter oil Temperature S
Gauges NA
TRANSFERCASE ASSEMBLY
S
BRAKE SYSTEM: WINDSHIELD (rear) S
Master Cylinder
Assembly S FUEL TANK ASSEMBLY S

STEERING SYSTEM:
Power Steering System S
Steering Clutch Assembly with Disc Plate & Brake Lining S

ACCESSORIES:
Dozer/Blade Assembly NA Riper Assembly NA
Cutting Edges NA End Bits NA
Dragline Bucket NA Clamshell Bucket NA
Backhoe Bucket NA Ditching Bucket NA
Fairlead assembly Tagline Assembly
(for crane) NA (for crane) NA
Compressor NA Cables NA
Boom Assembly NA Boom Pulley NA
Lifting Block NA Others NA

33
REMARKS:
Engine needs top-overhauling
Signal lights and Headlight Assy. - not original/Taiwan
Needs underchassis repair - brake system & Suspension Assy.
Odometer Reading = 97,500 kms.
Inspected by:

JUAN DELA CRUZ

(NAME)

Sr. TAS
(DESIGNATION)

34
ANNEX D
CHECKLIST OF PROPERTIES FOR DISPOSAL
AIRCON/REFRIGERATOR/FREEZER
Equipment Description/Type____________________________________
Unit Serial No.________________________Prop.No._________________
Acquisition Cost_______________________Date____________________
Date Reported as Unserviceable ________________________________

LEGEND:
S = Serviceable X = Unserviceable
M= Missing NA = Not Applicable

MECHANICAL
ELECTRICAL: :

Motor Compressor Compressor

Running Capacitor Thermostat
Starting Capacitor Condenser
Selector Switch Evaporator
Magnetic Contactor Filter Drier
Relay Capillary Tube
Overload Protector H/L Pressure Switch
Condensed Fan Motor Expansion Valve
Fan Motor Strainer
Time Relay Switch Surge Tank
Wiring Heat Exchanger
Solenoid Sight Glass

OTHERS:

Body
Casing
Front Cover
Air Filter Element

Inspected by:

______________________________
(NAME)
______________________________
(DESIGNATION)

35
ANNEX E

Republic of the Philippines

XYZ Corporation
DISPOSAL COMMITTEE
Manila

APPRAISAL REPORT
Date:_____________

Subject: Appraisal of various properties intended for disposal as listed

under attached _______ page/s Inventory and Inspection Report
of Unserviceable Property (I & I Report) dated
______________.

Findings/Observations:

1. The subject properties were all kept inside a guarded bodega

and systematically arranged in accordance with the listings
indicated under I & I Report.
2.

3.

Note: With individual Checklist and pictures hereto attached.

Valuation Procedures/Consideration:

1. The condition of the above-subject properties has been

assessed thru ocular inspection.

2. The vehicle was appraised on the basis of the available Current

Market Value (CMV) taken from advertised price of used vehicle
of the same make and model from “ABC” magazine, May 2,
2000 issue.

3.

4.

5. Determination of the appraised value is based on the COA

Revised Guidelines on Appraisal of Property other than Real
Estate, Antique Property and Works of Art.

36
6. The total appraised value of the above subject properties arrived
at is P_____________, broken down as follows:

Item Description Appraised Value

a. ______________
b. ______________
c. ______________

Total Appraised Value P ____________

Prepared by:

JUAN DELA CRUZ

Member
Disposal Committee

37
ANNEX F

ADJUSTMENT OF APPRAISED VALUE WHEN AUCTION BIDS

ARE LOW

In Sec. VII of COA Memorandum No. 88-569, the

hereunder activities were performed by the Auditor. However,
with the lifting of pre-audit, these functions became the
responsibility of the Agency.

If after exposure of the property to public auction, as

required under Sec. 79 of P.D. 1445, the highest bid falls below
the government floor price the agency shall:

1. Determine whether the difference is excessive. The

amount of deviation of the highest bid from
the floor /reference value is considered excessive
when it is greater than 10% of the
floor/reference value plus the cost of calling
another public auction.

2. If the difference is found not excessive, the agency

shall continue with the sale of the unserviceable
properties. If the difference is found to be
excessive, the agency shall call for another public
auction with the floor/reference value reduced by
10%.

If the second auction still fails, i.e., the highest bid is still
excessively lower than the reduced floor/reference value, then
the sale may be negotiated with the highest offeror.

38