Yes. the name of the reporting entity and any change in the name, whether the financial statements are a group of entities or an individual entity. THE REVISED CHART OF ACCOUNTS AND THE PHILIPPINE PUBLIC SECTOR ACCOUNTING STANDARDS LOURDES M. CASTILLO Assistant Commissioner Government Accountancy Sector Lecture Delivered at the PAGBA Convention … Excerpts from the Notes to Financial Statements (ADA Corporation) Corporate/Company Information: The firm was incorporated under the laws of the Republic of the Philippines and registered with the Philippine Securities and Exchange Commission (SEC) on July 22, 1966. In such a case, the entity is required to depart from the IFRS requirement, with detailed disclosure of the nature, reasons, and impact of the departure. [IAS 1.76B], The line items to be included on the face of the statement of financial position are: [IAS 1.54], Additional line items, headings and subtotals may be needed to fairly present the entity's financial position. [IAS 1.55A]*, This site uses cookies to provide you with a more responsive and personalised service. * Clarified by Definition of Material (Amendments to IAS 1 and IAS 8), effective 1 January 2020. [IAS 1.45], Information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity. Also, IAS 1.57(b) states: "The descriptions used and the ordering of items or aggregation of similar items may be amended according to the nature of the entity and its transactions, to provide information that is relevant to an understanding of the entity's financial position.". Copyright 2007. lessonko.com. The IFRS include . Accounting Standards IFRS Standards adopted as Philippines Financial Reporting Standards (PFRS) are required both … * Disclosure Initiative (Amendments to IAS 1), effective 1 January 2016, clarifies this order just to be an example of how notes can be ordered and adds additional examples of possible ways of ordering the notes to clarify that understandability and comparability should be considered when determining the order of the notes. PAS 11. Presentation of Financial Statements. [IAS 1.7]. [IAS 1.18], IAS 1 acknowledges that, in extremely rare circumstances, management may conclude that compliance with an IFRS requirement would be so misleading that it would conflict with the objective of financial statements set out in the Framework. qualitative information about the entity's objectives, policies and processes for managing capital, including>, nature of external capital requirements, if any, quantitative data about what the entity regards as capital, whether the entity has complied with any external capital requirements and. PFRSs 2. When an entity presents subtotals, those subtotals shall be comprised of line items made up of amounts recognised and measured in accordance with IFRS; be presented and labelled in a clear and understandable manner; be consistent from period to period; not be displayed with more prominence than the required subtotals and totals; and reconciled with the subtotals or totals required in IFRS. The auditor must maintain independence in mental attitude in … (Supersedes IAS 1 (1975), IAS 5, and IAS 13 (1979)), When an entity presents subtotals, those subtotals shall be comprised of line items made up of amounts recognised and measured in accordance with IFRS; be presented and labelled in a clear and understandable manner; be consistent from period to period; and not be displayed with more prominence than the required subtotals and totals. The FRSC’s main function is to establish generally accepted accounting principles in the Philippines. Income and expenses, including gains and losses. IAS 1 was reissued in September 2007 and applies to annual periods beginning on or after 1 January 2009. statement of profit or loss and other comprehensive income, separate statements of profit or loss (where presented). IAS 1 was reissued in September 2007 and applies to annual periods beginning on or after 1 January 2009. Auditing references such as PSA, PSRE, PSRS, PSQC, PAPS and other standards issued by the Auditing and Assurance Standards Council (AASC) in the Philippines [IAS 1.99] If an entity categorises by function, then additional information on the nature of expenses – at a minimum depreciation, amortisation and employee benefits expense – must be disclosed. IAS 1.136A requires the following additional disclosures if an entity has a puttable instrument that is classified as an equity instrument: The following other note disclosures are required by IAS 1 if not disclosed elsewhere in information published with the financial statements: [IAS 1.138], The 2007 comprehensive revision to IAS 1 introduced some new terminology. Contact no. if it has not complied, the consequences of such non-compliance. [IAS 1.16], Inappropriate accounting policies are not rectified either by disclosure of the accounting policies used or by notes or explanatory material. These words serve as exceptions. Page 4 PFRS 15: An Overview §International Financial Reporting Standard (IFRS) 15, Revenue from contract with customers, was issued in May 2014 by the International Accounting Standards Board (IASB) §IFRS 15 was adopted by the FRSC in 2016 as PFRS 15 §PFRS 15 replaces PAS 18, Revenue, PAS 11, Construction Contracts, and related interpretations effective January 1, 2018 IFRS - standards that are promulgated by the International Accounting Standards Board (IASB) which is based in London, UK. Presentation of Financial Statements [superseded by PAS 1 (Revised)] 01/01/ 05. statement of comprehensive income (income statement is retained in case of a two-statement approach), recognised [directly] in equity (only for OCI components), recognised [directly] in equity (for recognition both in OCI and equity), recognised outside profit or loss (either in OCI or equity), removed from equity and recognised in profit or loss ('recycling'), reclassified from equity to profit or loss as a reclassification adjustment, owners (exception for 'ordinary equity holders'), income and expenses, including gains and losses, contributions by and distributions to owners (in their capacity as owners), a statement of financial position (balance sheet) at the end of the period, a statement of profit or loss and other comprehensive income for the period (presented as a single statement, or by presenting the profit or loss section in a separate statement of profit or loss, immediately followed by a statement presenting comprehensive income beginning with profit or loss), a statement of changes in equity for the period, notes, comprising a summary of significant accounting policies and other explanatory notes. Accounting Rules Tax Year The fiscal year begins on 1 January and ends on 31 December of the same year. Thus, it has approved two Statement of Financial Accounting International Accounting Standards (IASs) were issued by the antecedent International Accounting Standards Council (IASC), and endorsed and amended by the International Accounting Standards Board (IASB). Scope A complete set of financial statements includes: [IAS 1.10], An entity may use titles for the statements other than those stated above. The Philippine Financial Reporting Standards (PFRS)/Philippine Accounting Standards (PAS) are the new set of Generally Accepted Accounting Principles (GAAP) issued by the Accounting Standards Council (ASC) to govern the preparation of financial statements (Table 1). This Commission related notes for each of the above items. Income taxes. To meet that objective, financial statements provide information about an entity's: [IAS 1.9]. Consequential amendments were made at that time to all of the other existing IFRSs, and the new terminology has been used in subsequent IFRSs including amendments. Accounting Standards Update No. Bucket 1 (no significant increase in credit risk) Bucket 3 (impaired) Bucket 2 (with significant the amount of dividends proposed or declared before the financial statements were authorised for issue but which were not recognised as a distribution to owners during the period, and the related amount per share. Philippine Accounting Standards PAS Title Effective Date PAS 1 Presentation of Financial Statements [superseded by PAS 1 (Revised Further sub-classifications of line items presented are made in the statement or in the notes, for example: [IAS 1.77-78]: IAS 1 does not prescribe the format of the statement of financial position. Presentation of financial statements. A net asset presentation (assets minus liabilities) is allowed. Accounting Standards Board and the standards issued by the Board of the International Accounting Standards Committee, and each applicable Interpretation of the International Financial Reporting Interpretations ... $1 = P 51.20. Statement of cash flows. Philippine Accounting Standards. All items of income and expense recognised in a period must be included in profit or loss unless a Standard or an Interpretation requires otherwise. [IAS 1.2]General purpose financial statements are those intended to serve users who do not have the authority to demand financial reports tailored for their own needs. Philippine Accounting Standards Friday, March 30, 2007. 1 – from the Board of Accountancy [IAS 1.80-80A], Concepts of profit or loss and comprehensive income, Profit or loss is defined as "the total of income less expenses, excluding the components of other comprehensive income". IAS 1 Presentation of Financial Statements sets out the overall requirements for financial statements, including how they should be structured, the minimum requirements for their content and overriding concepts such as going concern, the accrual basis of accounting and the current/non-current distinction. An entity must disclose, in the summary of significant accounting policies or other notes, the judgements, apart from those involving estimations, that management has made in the process of applying the entity's accounting policies that have the most significant effect on the amounts recognised in the financial statements. Philippine Institute of Certified Accountants. * Added by Disclosure Initiative (Amendments to IAS 1), effective 1 January 2016. PHILIPPINE ACCOUNTING STANDARDS 1 PRESENTATION OF FINANCIAL STATEMENTS Objective of PAS 1The objective of IAS 1 (revised 1997) is to prescribe the basis for presentation of general-purpose financial statements, to ensure comparability both with the entity's financial statements of previous periods and with the financial statements of other entities. [IAS 1.85], Items cannot be presented as 'extraordinary items' in the financial statements or in the notes. Philippine Accounting Standards Friday, March 30, 2007. ADA is The standard requires a complete set of financial statements to comprise a statement of financial position, a statement of profit or loss and other comprehensive income, a statement of changes in equity and a statement of cash flows. Assets can be presented current then non-current, or vice versa, and liabilities and equity can be presented current then non-current then equity, or vice versa. The FRSC was established under the Implementing Rules and Regulations of the Philippine Accountancy Act of 2004 to assist the BOA in carrying out its power and function to promulgate accounting standards in the Philippines. Philippine Financial Reporting Standards (PFRS)/ Philippine Accounting Standards (PAS) Title Effective Date Brief Description Disclosure requirements for accounting policies, except those for changes in accounting policies, are set out in PAS 1 Presentation of Financial Statements. [IAS 1.113], IAS 1.114 suggests that the notes should normally be presented in the following order:*. Thus, it has approved two Statement of Financial Accounting IFRS - standards that are promulgated by the International Accounting Standards Board (IASB) which is based in London, UK. [IAS 1.87], Certain items must be disclosed separately either in the statement of comprehensive income or in the notes, if material, including: [IAS 1.98]. Standards for recognising, measuring, and disclosing specific transactions are addressed in other Standards and Interpretations.ScopeApplies to all general purpose financial statements based on International Financial Reporting Standards. The PFRSC has formed the Philip­pine In­ter­pre­ta­tions Committee (PIC), which issues im­ple­men­ta­tion guidance on PFRSs. IAS 1.8 states: "Although this Standard uses the terms 'other comprehensive income', 'profit or loss' and 'total comprehensive income', an entity may use other terms to describe the totals as long as the meaning is clear. All financial statements are required to be presented with equal prominence. Other comprehensive income is defined as comprising "items of income and expense (including reclassification adjustments) that are not recognised in profit or loss as required or permitted by other IFRSs". Excerpts from the Notes to Financial Statements (ADA Corporation) Corporate/Company Information: The firm was incorporated under the laws of the Republic of the Philippines and registered with the Philippine Securities and Exchange Commission (SEC) on July 22, 1966. the level of rounding used (e.g. Changes in revaluation surplus where the revaluation method is used under, Remeasurements of a net defined benefit liability or asset recognised in accordance with, Exchange differences from translating functional currencies into presentation currency in accordance with, Gains and losses on remeasuring available-for-sale financial assets in accordance with, The effective portion of gains and losses on hedging instruments in a cash flow hedge under IAS 39 or, Gains and losses on remeasuring an investment in equity instruments where the entity has elected to present them in other comprehensive income in accordance with IFRS 9. When an entity applies an accounting policy retrospectively or makes a retrospective restatement of items in its financial statements, or when it reclassifies items in its financial statements, it must also present a statement of financial position (balance sheet) as at the beginning of the earliest comparative period. IAS 1 sets out the overall requirements for the presentation of financial statements, guidelines for their structure and minimum requirements for their content. a description of the nature and purpose of each reserve within equity. or by function (cost of sales, selling, administrative, etc). thousands, millions). view of Philippine Corporate Sector Accounting and Auditing Practices. Accounting standards in the Philip­pines are adopted by the Philip­pines Financial Reporting Standards Council (PFRSC) and approved by the Se­cu­ri­ties and Exchange Com­mis­sion (SEC). Standards for recognising, measuring, and disclosing specific transactions are addressed in other Standards and Interpretations. [IAS 1.74] However, the liability is classified as non-current if the lender agreed by the reporting date to provide a period of grace ending at least 12 months after the end of the reporting period, within which the entity can rectify the breach and during which the lender cannot demand immediate repayment. [IAS 1.88] Some IFRSs require or permit that some components to be excluded from profit or loss and instead to be included in other comprehensive income. [IAS 1.60] In either case, if an asset (liability) category combines amounts that will be received (settled) after 12 months with assets (liabilities) that will be received (settled) within 12 months, note disclosure is required that separates the longer-term amounts from the 12-month amounts. Preface to International Standards and Philippine Standards PSA 120 - Framework of Philippine Standards on Auditing PSA 200 (Revised and Redrafted) - Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with International Standards on Auditing Inventories. [IAS 1.3] The 14 members or representatives must come from the following agency or group. That information, along with other information in the notes, assists users of financial statements in predicting the entity's future cash flows and, in particular, their timing and certainty. If the annual reporting period changes and financial statements are prepared for a different period, the entity must disclose the reason for the change and state that amounts are not entirely comparable. The FRSC was established under the Implementing Rules and Regulations of the Philippine Accountancy Act of 2004 to assist the BOA in carrying out its power and function to promulgate accounting standards in the Philippines. General Standards 1. [IAS 1.73], If a liability has become payable on demand because an entity has breached an undertaking under a long-term loan agreement on or before the reporting date, the liability is current, even if the lender has agreed, after the reporting date and before the authorisation of the financial statements for issue, not to demand payment as a consequence of the breach. [IAS 1.82A]*. expected to be settled within the entity's normal operating cycle. There are 15 members that composed the Financial Reporting Standards Council. Each word should be on a separate line. Accounting policies, changes in accounting estimates and errors. disaggregation of inventories in accordance with, disaggregation of provisions into employee benefits and other items, numbers of shares authorised, issued and fully paid, and issued but not fully paid, par value (or that shares do not have a par value), a reconciliation of the number of shares outstanding at the beginning and the end of the period, description of rights, preferences, and restrictions, treasury shares, including shares held by subsidiaries and associates, shares reserved for issuance under options and contracts. A compilation of Philippine Accounting Standards (PAS) Philippine Financial Reporting Standards (PFRS) Philippine interpretations (PI) Philippine Standard on Auditing (PSA) Philippine Standards on Review Engagements (PSREs) Philippine Standards on Assurance Engagements (PSAEs) Philippine Standards on Related Services (PSRSs) Philippine Standards on Quality Control (PSQCs) Philippine … Contact Us. Generally Acceptable (Implicit) This means that the principle has gained general acceptance due to practice over time and has been proven to be most useful. To meet that objective, financial statements provide information about an entity's: [IAS 1.7], Powered by Blogger.com Accounting Standards (AS 1~32) are issued/ amended by the Accounting Standards Board of ICAI, to establish uniform standards for preparation of financial statements, in accordance with Indian GAAP (Generally Accepted Accounting Practices), for better understanding of the users. [IAS 1.25], IAS 1 requires that an entity prepare its financial statements, except for cash flow information, using the accrual basis of accounting. [IAS 1.82A], An entity's share of OCI of equity-accounted associates and joint ventures is presented in aggregate as single line items based on whether or not it will subsequently be reclassified to profit or loss. expected to be realised in the entity's normal operating cycle, held primarily for the purpose of trading, expected to be realised within 12 months after the reporting period. A compilation of Philippine Accounting Standards (PAS) Philippine Financial Reporting Standards (PFRS) Philippine interpretations (PI) Philippine Standard on Auditing (PSA) Philippine Standards on Review Engagements (PSREs) Philippine Standards on Assurance Engagements (PSAEs) Philippine Standards on Related Services (PSRSs) Philippine Standards on Quality Control (PSQCs) Philippine … [IAS 1.38], An entity is required to present at least two of each of the following primary financial statements: [IAS 1.38A], * A third statement of financial position is required to be presented if the entity retrospectively applies an accounting policy, restates items, or reclassifies items, and those adjustments had a material effect on the information in the statement of financial position at the beginning of the comparative period. Philippine Financial Reporting Standards (PFRSs) are currently fully converged with International Financial Reporting Standards (IFRSs) except for the deferral of IFRIC 15 Agreements for the Construction of Real Estate. The Philippine Financial Reporting Standards (PFRS)/Philippine Accounting Standards (PAS) are the new set of Generally Accepted Accounting Principles (GAAP) issued by the Accounting Standards Council (ASC) to govern the preparation of financial statements (Table 1). PHILIPPINE ACCOUNTING STANDARDS 1 PRESENTATION OF FINANCIAL STATEMENTS Objective of PAS 1 The objective of IAS 1 (revised 1997) is to prescribe the basis for presentation of general purpose financial statements, to ensure comparability both with the entity's financial statements of Examples cited in IAS 1.123 include management's judgements in determining: An entity must also disclose, in the notes, information about the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. 01/01/ 09 To enable the Internal Auditors to fully understand the major standards adopted under the Philippine Public Sector Accounting Standards (PPSAS) required to be adopted by government agencies and instrumentalities classified as non-government business entities 1 – from the Board of Accountancy Please read, International Financial Reporting Standards, IAS 1 — Presentation of Financial Statements, IAS 8 — Accounting Policies, Changes in Accounting Estimates and Errors, IAS 10 — Events After the Reporting Period, IAS 15 — Information Reflecting the Effects of Changing Prices (Withdrawn), IAS 19 — Employee Benefits (1998) (superseded), IAS 20 — Accounting for Government Grants and Disclosure of Government Assistance, IAS 21 — The Effects of Changes in Foreign Exchange Rates, IAS 22 — Business Combinations (Superseded), IAS 26 — Accounting and Reporting by Retirement Benefit Plans, IAS 27 — Separate Financial Statements (2011), IAS 27 — Consolidated and Separate Financial Statements (2008), IAS 28 — Investments in Associates and Joint Ventures (2011), IAS 28 — Investments in Associates (2003), IAS 29 — Financial Reporting in Hyperinflationary Economies, IAS 30 — Disclosures in the Financial Statements of Banks and Similar Financial Institutions, IAS 32 — Financial Instruments: Presentation, IAS 35 — Discontinuing Operations (Superseded), IAS 37 — Provisions, Contingent Liabilities and Contingent Assets, IAS 39 — Financial Instruments: Recognition and Measurement, Disclosure initiative — Accounting policies, Classification of liabilities — Effective date, Disclosure initiative — Principles of disclosure, Model financial statements and checklists, Educational material on applying IFRSs to climate-related matters, ESMA announces enforcement priorities for 2020 financial statements, We comment on the IASB’s exposure draft on general presentation and disclosures, IASB defers effective date of IAS 1 amendments, EFRAG endorsement status report 6 November 2020, Deloitte comment letter on general presentation and disclosures, EFRAG endorsement status report 28 August 2020, Effective date of IAS 1 amendments on classification, IFRS Practice Statement 'Making Materiality Judgements', SIC-8 — First-time Application of IASs as the Primary Basis of Accounting, SIC-18 — Consistency – Alternative Methods, SIC-27 — Evaluating the Substance of Transactions in the Legal Form of a Lease, SIC-29 — Service Concession Arrangements: Disclosures, Operative for periods beginning on or after 1 January 1975, Operative for periods beginning on or after 1 January 1981, Operative for periods beginning on or after 1 July 1998, Effective for annual periods beginning on or after 1 January 2005, Effective for annual periods beginning on or after 1 January 2007, Effective for annual periods beginning on or after 1 January 2009, Effective for annual reporting periods beginning on or after 1 January 2009, Effective for annual periods beginning on or after 1 January 2010, Effective for annual periods beginning on or after 1 January 2011, Effective for annual periods beginning on or after 1 July 2012, Effective for annual periods beginning on or after 1 January 2013, Effective for annual periods beginning on or after 1 January 2016, Effective for annual periods beginning on or after 1 January 2020, Effective for annual periods beginning on or after 1 January 2022, The new effective ate of the January 2020 amendments is now 1 January 2023, financial assets (excluding amounts shown under (e), (h), and (i)), investments accounted for using the equity method, financial liabilities (excluding amounts shown under (k) and (l)), current tax liabilities and current tax assets, as defined in, deferred tax liabilities and deferred tax assets, as defined in, non-controlling interests, presented within equity. This board superseded Accounting Standards Council (ASC), the board who created International Accounting Standards (IAS) originally, in 1970's with the hope to achieving greater consitency and comparability among accounting standards in the world.