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Philippines adopts new and revised IASs/IFRSs

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19 Dec 2004

The Philippines Securities and Exchange Commission (SEC) has approved the adoption of all of the revised IASs issued by the IASB in 2003 and 2004 as well as IFRSs 1-5, effective for financial reports submitted by companies for annual reporting periods beginning 1 January 2005 and for quarterly periods beginning 1 January 2006. -->"The adoption of IAS will harmonise the country's financial reporting requirements with international standards, consequently the understandability and reliability of financial statements in the country," --> the SEC said.

The standards had earlier been endorsed by the Philippines Accounting Standards Council. Formal adoption is set out in SEC Memorandum Circular 19 on the Philippine Financial Reporting Standards. The circular covers 26 accounting standards, including 17 revised IASs, five IFRSs, and four interpretations. The SEC said companies required to submit quarterly reports in 2005 need not present certain comparative figures for IAS 39. However, quarterly reports must discuss the status of conversion plans. The banking industry (led by the Bankers Association of the Philippines), along with mutual funds and insurance companies, had sought to defer IAS 39. A key bankers' concern was that IAS 39 requires that loan loss provisions reflect only incurred losses while the current provisioning practice is to base the allowance on a percentage of outstanding balances (that is, expected losses). In Asia, Philippines joins Australia, Bangladesh, Hong Kong, New Zealand, and Singapore in adopting the entire suite of IFRSs as national GAAP. Australia and New Zealand have made some changes to recognition and measurement principles by eliminating some accounting policy choices permitted by IFRSs, and Singapore has modified some of the recognition and measurement principles in IFRSs. Click for Philippines SEC Announcement (PDF 102k).

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