Summary of Significant Changes and Updates Financial Reporting Framework The term “Generally Acceptable Accounting Principles (or GAAP)” was deleted and replaced with Financial Reporting Framework which means a set of accounting principles, standards, interpretations and pronouncements that must be adopted in the preparation and submission of the annual financial statements of a particular class of entities, as defined in the Rule by the Commission. Under the amended Rule, the following are the prescribed financial reporting framework for a particular class or group of entities: Class of Entity/Criteria Financial Reporting Framework Large and/or publicly accountable entity Falling under any of the following criteria: Philippine Financial Reporting Standards total assets of more than P350 million or total liabilities (PFRS), or of more than P250 million; Financial Reporting required to file financial statements under Part II of the Framework applicable to Rule; Banks, Insurance in the process of filing their financial statements for the Companies or Pre-need, purpose of issuing any class of instruments in a public as allowed by the SEC or market; or, the appropriate regulatory holders of secondary licenses issued by regulatory agency agencies Small and medium-sized entities (SMEs) Meeting all of the following criteria: PFRS for SMEs total assets of between P3M to P350M or total liabilities of between P3M to P250M not required to file financial statements under Part II of the Rule; not in the process of filing their financial statements for the purpose of issuing any class of instruments in a public market; and, not holders of secondary licenses issued by regulatory agencies. Note: Refer to the Rule for the list of instances where an SME may be exempted from the mandatory adoption of PFRS for SMEs.
Summary of Significant Changes and Updates Financial Reporting Framework The term “Generally Acceptable Accounting Principles (or GAAP)” was deleted and replaced with Financial Reporting Framework which means a set of accounting principles, standards, interpretations and pronouncements that must be adopted in the preparation and submission of the annual financial statements of a particular class of entities, as defined in the Rule by the Commission. Under the amended Rule, the following are the prescribed financial reporting framework for a particular class or group of entities: Class of Entity/Criteria Financial Reporting Framework Large and/or publicly accountable entity Falling under any of the following criteria: total assets of more than P350 million or total liabilities of more than P250 million; required to file financial statements under Part II of the Rule; in the process of filing their financial statements for the purpose of issuing any class of instruments in a public market; or, holders of secondary licenses issued by regulatory agencies Philippine Financial Reporting Standards (PFRS), or Financial Reporting Framework applicable to Banks, Insurance Companies or Pre-need, as allowed by the SEC or the appropriate regulatory agency Small and medium-sized entities (SMEs) Meeting all of the following criteria: total assets of between P3M to P350M or total liabilities of between P3M to P250M not required to file financial statements under Part II of the Rule; not in the process of filing their financial statements for the purpose of issuing any class of instruments in a public market; and, not holders of secondary licenses issued by regulatory agencies. Note: Refer to the Rule for the list of instances where an SME may be exempted from the mandatory adoption of PFRS for SMEs. PFRS for SMEs
accounting-alert-sec-amended-src-rule-68.docx