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ACC 203 CONCEPTUAL FRAMEWORK AND ACCOUNTING STANDARDS Module 1: Conceptual Framework...

ACC 203 CONCEPTUAL FRAMEWORK AND ACCOUNTING STANDARDS Module 1: Conceptual Framework Financial and Accounting Standards Financial Reporting Sustainability Reporting Council (ASC) Standards Council (FRSC) Standards Council (FSRSC) - It was renamed as FSRSC due to the adoption of IFRS Sustainability Disclosure Standards issued by the International Sustainability Standards Boards (ISSB). - FSRSC: now the accounting standard-setting body created by the Professional Regulation Commission upon recommendation by the Board of Accountancy to assist them in carrying out its powers and functions provided under the R.A. Act No. 9298. - Approved Statements of FSRSC: Philippine Accounting Standards (PAS) / Philippine Financial Reporting Standards (PFRS); constitutes the highest hierarchy of GAAP 1.7.1.1 Composition of FSRSC Chairman 1 Financial Executives Institute of the 1 Philippines – FINEX (Major Organization of preparers and users of financial statements) Board of Accountancy 1 Accredited National Professional Organization of CPAs: Bangko Sentral ng Pilipinas 1 Public Practice 2 Bureau of Internal Revenue 1 Commerce and Industry 2 Commission on Audit 1 Academe / Education 2 Insurance Commission 1 Government 2 Securities and Exchange Commission 1 Total 16 o The Chairman and members of the FSRSC shall have a term of 3 years renewable for another term. 1.7.2 Philippine Interpretations Committee (PIC) - Formed by FSRSC in August 2006 and has replaced the Interpretations Committee or IC formed by the Accounting Standards Council in May 2000 - Role: to prepare interpretations of PFRS for approval by the FSRSC and to provide timely guidance on financial reporting issues not specifically addressed in the current PFRS - Give authoritative guidance on issues that are likely to receive divergent or unacceptable treatment because the standards do not provide specific and clear-cut rules and guidelines. - International Counterpart: International Financial Reporting Interpretations Committee or IFRIC 1.7.3 International Accounting Standards Committee (IASC) - Independent private sector body, with the objective of achieving uniformity in the accounting principles which are used by businesses and other organizations for financial reporting around the world - Formed in June 1973 through an agreement made by professional accountancy bodies from Australia, Canada, France, Germany, Japan, Mexico, the Netherlands, the United Kingdom and Ireland, and the United States of America - Headquartered in London, United Kingdom - Objectives: a. Formulate and publish in the public interest accounting standards to be observed in the presentation of FS and to promote their worldwide acceptance and observance b. Work generally for the improvement and harmonization of regulations, accounting standards and procedures relating to the presentation of financial statements 1.7.4 International Accounting Standards Board - Replaces the IASC above - Publishes standards series of pronouncements called International Financial Reporting Standards or IFRS - Adopted the body of standards issued by the IASC designated as International Accounting Standards or IAS - IASB standard-setting process: Research Discussion Paper Exposure Draft Accounting Standard - A due process system is employed to enable the interested parties to express their views on issues under consideration  ACC 203 CONCEPTUAL FRAMEWORK AND ACCOUNTING STANDARDS Module 1: Conceptual Framework 1.7.5 Philippine Financial Reporting Standards - Most of the Philippine Standards are based on American accounting standards - The PFRS collectively includes all of the following: a. Philippine Financial Reporting Standards (PFRS) which correspond to International Financial Reporting Standards (IFRS). The PFRS are numbered the same as their counterpart in IFRS. b. Philippine Accounting Standards (PAS) which correspond to International Accounting Standards (IAS). The PAS are numbered the same as their counterpart in IAS. c. Philippine Interpretations which correspond to Interpretations of the IFRIC and Interpretations developed by the Philippine Interpretations Committee (PIC). – END OF CHAPTER 1 –