Unit 1 Financial Reporting

The process of determining if a business event is quantifiable and has a financial impact on the company's assets, liabilities, or equity.

Deals with identifying relevant financial transactions and events for accounting purposes.

The process of assigning monetary values to identified transactions and events.

Involves communicating financial information in a meaningful way to relevant users.

Information that can be expressed in numbers.

Information related to financial aspects of a business, such as revenue, expenses, and assets.

Accounting information should be useful for making informed decisions about a business.

The core function of accounting is to provide useful financial information for decision making.

The FRSC is the body responsible for setting accounting standards in the Philippines. It consists of 15 members, including a chairman and representatives from various institutions like the Board of Accountancy, SEC, BSP, BIR, and professional organizations.

The FRSC evaluates and deliberates on proposed IFRSs (International Financial Reporting Standards) from the IASB. It provides recommendations to the Board of Accountancy for adoption of these IFRSs in the Philippines.

Once approved by the Board of Accountancy, IFRSs become known as Philippine Financial Reporting Standards (PFRSs).

The PIC is responsible for interpreting PFRSs and providing guidance on financial reporting issues not explicitly covered by existing standards.

Generally Accepted Accounting Standards (GAAP) in the Philippines are comprised of PFRSs, PASs (Philippine Accounting Standards), and PIs (Philippine Interpretations).

The set of rules, procedures, standards, and practices followed when preparing and presenting financial statements.

GAAP adapts to changes in society and financial transactions, ensuring they remain relevant and adaptable.

The organization in the Philippines responsible for developing generally accepted accounting principles.

The set of accounting standards issued by the FRSC in the Philippines.

The previous accounting standards body in the Philippines, which was replaced by the FRSC.

The set of accounting standards issued by the ASC in the Philippines.

The FRSC derives its authority from the Philippine Accountancy Act of 2004 (RA 9298) and is recognized by the Professional Regulation Commission (PRC).

The FRSC is created by the Professional Regulation Commission (PRC) and is assisted by the Board of Accountancy (BOA) to ensure consistency and quality in financial reporting.

The FRSC's primary responsibility is to assist the Board of Accountancy (BOA) in ensuring that the functions outlined in the Philippine Accountancy Act of 2004 (RA 9298) are properly implemented.

The FRSC promotes transparency and accountability in financial reporting to ensure that financial information is reliable and useful for decision-making.

The discounted value of future net cash inflows an asset is expected to generate in normal business operations. It reflects the asset's worth based on its future earning potential.

The amount an asset could be sold for in the current market. It represents the asset's worth in an immediate transaction.

The systematic recording of all economic transactions in chronological order.

The process of grouping similar transactions into their respective categories, such as assets, liabilities, equity, revenue, and expenses.

A collection of accounts that categorize a company's financial information. These accounts can be classified into assets, liabilities, equity, revenue, and expenses.

The preparation of financial statements to be presented to stakeholders, including the statement of financial position, income statement, statement of comprehensive income, statement of changes in equity, and statement of cash flows.

The process of choosing a measurement basis for assets and liabilities. This involves selecting between techniques like historical cost and current value measures (fair value, value in use, fulfillment value, and current cost).

The relevance and faithful representation of information are key factors considered when selecting a measurement basis for assets.

This refers to the concept of recognizing the value of a future receivable in the present. Even though the money won't be received for a long time, it still has a present value.