Nature and Purpose of Accounting

The process of recognizing or not recognizing business activities or transactions as accountable events. Only those with financial character are accounted for.

The process of assigning amounts to accountable economic events and transactions. This involves measuring the financial impact of these events.

The process of summarizing information into accounting reports and distributing them to users. This makes accounting information useful and accessible.

The primary function of accounting to supply financial information that helps people make economic decisions.

The practice of recording financial transactions chronologically and systematically in appropriate books. This is considered the foundation of accounting.

The process of organizing and categorizing recorded transactions into meaningful groups. It helps make sense of information and analyze it.

The process of aggregating and summarizing classified information into concise reports. It helps make information easier to understand and compare.

The analysis and interpretation of summarized accounting information to draw conclusions and understand the financial situation of a business. It helps make informed decisions.

An independent, private sector body that issues accounting standards called International Financial Reporting Standards (IFRSs).

Authoritative interpretations of existing IAS and IFRS (called the IFRIC Interpretations) and provides guidance on financial reporting issues not specifically addressed by IAS and IFRS.

The process by which the IASB develops and publishes accounting standards.

A process that involves various interested individuals and organizations from around the world.

Accounting standards issued by the IASC, later adopted by the IASB.

The Financial Reporting Standards Council (FRSC) is the primary accounting standard-setting body in the Philippines, established by the Professional Regulation Commission (PRC). Its purpose is to provide guidance and ensure consistent financial reporting practices within the country.

The Philippine Sustainability Reporting Committee (PSRC) was created by the Financial and Sustainability Reporting Standards Council (FSRSC) to assist in the adoption and issuance of sustainability reporting standards in the Philippines. It includes representatives from various organizations, like the Bangko Sentral ng Pilipinas (BSP) and the Securities and Exchange Commission (SEC).

The Philippine Interpretations Committee (PIC) was established to issue interpretations of existing Philippine Accounting Standards (PAS) and Philippine Financial Reporting Standards (PFRS). They provide guidance on financial reporting matters not explicitly covered by existing standards.

The FRSC, also known as the Financial and Sustainability Reporting Standards Council, sets accounting standards that align with international best practices. They're responsible for guidance on financial and sustainability-related reporting in the Philippines.

The ISSB's Sustainability Disclosure Standards are designed to provide investors with crucial information on how companies manage sustainability-related factors that can impact their long-term value. This aims to create transparency and understanding for investors interested in ESG performance.

The PSRC's key function is to provide technical support to the FSRSC in developing and implementing sustainability reporting standards in the Philippines. This ensures that sustainability reporting aligns with international best practices and contributes to the overall reporting framework in the country.

The PIC's interpretations serve as authoritative guidance for businesses applying PAS and PFRS in the Philippines. They aim to reduce inconsistencies and ensure consistency in the application of accounting standards, leading to more reliable financial reporting.

The Philippine Accountancy Act of 2004, regulating the practice of accountancy in the Philippines.

The body responsible for creating and enforcing rules for accountants in the Philippines. It operates under the Professional Regulation Commission (PRC).

The accredited professional organization (APO) for Certified Public Accountants (CPAs) in the Philippines, founded in 1929.

The range of services and work that accountants are legally allowed to perform.

A requirement for accountants to stay up-to-date with their knowledge and skills through continuing education and training.

They create accounting standards that are used internationally.

They provide interpretations of existing accounting standards, helping clarify specific issues.

They create Philippine accounting standards (PAS and PFRS) that are used by businesses in the Philippines.

The branch of accountancy that involves providing independent services to the public, including auditing financial statements, preparing tax returns and offering consultancy services.

Accountants working in this area assist management by planning, controlling and making decisions for a private organization. They are employed by the company itself.

Involves teaching accounting, auditing, and related subjects within educational institutions.

Accountants working for local, national, or international government agencies, such as the Bureau of Internal Revenue (BIR) and Commission on Audit (COA).

A continuous learning requirement for certified public accountants (CPAs) to maintain their skills and competence in accounting.

The minimum required units for a CPA to retain their license and accreditation to practice accountancy.

The process of obtaining a CPA license and practicing public accountancy.

The period of time for which a CPA license and accreditation is valid.