The Cooperative Development Authority issues the memorandum circular enclosed in this material to lay down the fundamental concepts and elements of financial reports. To ensure that cooperative business financial statements are against CDA's legal rules and policies, several accounting concepts, account titles accompanied with definitions are presented. These concepts are introduced in order to familiarize cooperatives and create a unified financial language within the organization and among coop formations. This material also exists not only to help coop leaders in establishing transparency and creating internal audit protocols, but also to enhance the process of monitoring overall business performance.

Differences between and among types of financial statements, like the balance sheets, income statements, statement of equity change, and cash floe statement, are also briefly discussed. CDA's sanctions on non-compliance to any of these mandated standards are also stated. Penalties issued to the coop are measured depending on the degree or frequency of offenses committed by the organization.