Abstract

Author:
Nino Vergel C. Ibarra

Doi: 10.26480/mbmj.02.2023.85.89

This is an open access article distributed under the Creative Commons Attribution License CC BY 4.0, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited

This study primarily aims to look into the management practices of reporting noncash expenses in the Income Statement of selected MSMEs in Metro Manila. This is descriptive research. Specifically, the study examines MSMEs common noncash expenses, methods of computation and reporting, and whether these companies show lower or higher noncash expenses according to their needs. Sixteen diversified companies were interviewed. The survey results confirmed that MSMEs’ typical noncash expense is depreciation and is computed using the straight-line method. Most MSMEs record their calculated noncash expenses based on the actual value, regardless if it is for income tax or loan application. It shows that MSMEs follow the Bureau of Internal Revenue (BIR) requirements when reporting their noncash expenses in the Income Statement. Additionally, this study discovers that the accounting treatment for reporting noncash expenses provide a suitable basis for owners to review their businesses and determine how to utilize these expenses to their benefits.