Module-c community Based Financial Management

 Operation and Maintenance Management Manual 
Training Module - D 
Community Based Financial 
Management 
 
DEMEWOZ CONSULTANCY 
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Long-term Liabilities 
Merchandise Inventory 
Net Income 
Net Operating Income 
Operating Expenses 
Operating Revenues 
Other Current Assets 
Other Current Liabilities 
account. 
Long-term Liabilities represent obligations that are payable beyond 
one year. 
If a loan needs to be paid over 5 years, the portion of the loan that is 
due in future financial years is a ‘long-term liability.’ 
Merchandise Inventory represents items that will be sold to 
customers within a year, like water meters, gate valves, pipes and 
fittings. This is a Current Asset account. 
Net Income is the bottom line in an Income Statement. It represents 
the difference between all the revenues generated and all the 
expenses incurred over a specified period. It may also be defined as 
Net Operating Income after deducting Depreciation, Interest 
Expense and non-operating income/expenses. 
Net Operating Income is the difference between Operating 
Revenues and Operating Expenses. 
Operating Expenses are the day-to-day expenses of running the 
water utility. In the Income Statement, this is the sum of Salaries, 
Rent, Electricity, Fuel, Chemicals and Filter, Repairs and 
Maintenance, 
General 
Administrative 
Expenses 
and 
Other 
Expenses. 
Operating Revenues represents all income generated by the water 
utility from its water operations. Th is includes Water Revenues, 
Meter Rental Fees or Meter Maintenance Fees, Administration Fees 
and New Connection Fees. 
Other Current Asset account holds all other assets that may be 
converted to cash or whose benefits can be realized within one year 
that cannot be classified in the specific c Current Asset accounts 
defined above. 
Other Current Liabilities account represents all other obligations due 
to be paid within one year that cannot be properly classified in the 
specific Current Liabilities accounts shown in the Balance Sheet. 
Other Expenses 
Other 
Operating 
Revenues 
Other Expenses account may be used for all other operating 
expenses that cannot be classified in the specific Operating Expense 
accounts in the Income Statement. 
Other Operating Revenues account represents all other revenue 
accounts not specifically identified in the Operating Revenues 

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Ministry of Water, Irrigation and Electricity