- Philippines is included in the IFAD GAAP Convergence Studies
- National Professional Organisation Website: Philippine Institute of Certified Public Accountants
- Response to IFAC Member Body Survey on Standard Setting and Regulation
- World Bank ROSC Accounting and Auditing Report
- Participant in the Asian-Oceanian Standard-Setters Group (AOSSG)
Financial Reporting Framework in the Philippines
Accounting standards in the Philippines are adopted by the Philippines Financial Reporting Standards Council (PFRSC) and approved by the Securities and Exchange Commission (SEC). The PFRSC has formed the Philippine Interpretations Committee (PIC), which issues implementation guidance on PFRSs.
Publicly Accountable Entities
The PFRSC has adopted most IFRSs, in some cases with modifications, and in some cases the most recent amendments to IFRSs have not been adopted. These standards are known as Philippine Financial Reporting Standards (PFRSs) and Philippine Accounting Standards (PASs). Philippine standards apply to all entities with public accountability. That includes:
- entities whose securities are listed in a public market or are in process of listing;
- all financial institutions including banks, insurance companies, security brokers, pension funds, mutual funds, and investment banking entities;
- public utilities; and
- other economically significant entities, defined as total assets in 2004 of at least 250 million pesos (US$5 million) or liabilities of at least 150 million (US$3 million).
The modifications, which have been described as 'transition relief', include some in the following areas:
- Reduced segment reporting disclosures
- Exemption from applying tainting rule for a specific set of financial instruments
- Commodity derivative contracts of mining companies as of 1 January 2005 'grandfathered'
- Insurance companies allowed to use another comprehensive set of accounting principles (also described as Philippine Financial Reporting Standards)
- For banks, losses from sale of non-performing assets allowed to be amortised over a period of time
- Some additional changes to IASB's pension, foreign exchange, and leases Standards
The auditor's report refers to "conformity with Philippine Financial Reporting Standards".
Small and Medium-sized Entities
The IFRS for SMEs was adopted in the Philippines effective 1 January 2010. It is known as the Philippine Financial Reporting Standard for SMEs (PFRS for SMEs). The Philippine Securities and Exchange Commission, in its En Banc Resolution dated August 13, 2009, adopted a definition of 'small and medium-sized entities' that includes a size criterion. An entity is an SME if:
- The entity has total assets of between P3 million and P350 million or total liabilities of between P3 million and P250 million;
- It is not required to file financial statements under SRC Rule 68.1;
- It is not in the process of filing its financial statements for the purpose of issuing any class of instruments in a public market;
- It is not a holder of a secondary license issued by a regulatory agency, such as a bank (all types of banks), an investment house, a finance company, an insurance company, a securities broker/dealer, a mutual fund and a pre-need company; and
- It is not a public utility.