June 24, 2010
BIR RULING [DA-(TAR-002) 108-10]
Section 41; BIR Ruling No. DA-191-07
Maynilad Water Services, Inc.
MWSS Compound, Katipunan Road
Balara, Quezon City
Attention: Mr. Arturo Celso D. Baranda
SAVP-Controller
Gentlemen :
This refers to your letter dated October 7, 2008 requesting for an authority to change your inventory costing method from First In First Out (FIFO) to Weighted Average Method for calendar year 2009 for the following reasons:
1. The nature of your business requires bulk purchases which are not easy to track in the present method (FIFO);
2. Since Systems Applications and Products in Data Processing or SAP, your accounting system, adopts the weighted average method, it will be costly to customize the system to retain FIFO method;
3. Materials do not expire over a long period of time (i.e., pipes, valves, etc.); and
4. No significant impact on taxation since prices do not usually fluctuate.
Verification report by the Large Taxpayers Audit and Investigation Division I disclosed that you are a domestic corporation duly organized and registered with the Securities and Exchange Commission. You were incorporated on January 22, 1997 primarily to bid...
