What accounting requirements are there in the Philippines?
The accounting standards in the Philippines are adopted by the Philippines Financial Reporting Standards Council (PFRSC) and approved by the Securities and Exchange Commission (SEC). The PFRSC has formed the Philippines Interpretations Committee (PIC), which issues implementation guidance on the Philippines Financial Reporting Standards (PFRSs).
The Philippine Financial Reporting Standards (PFRSs) and Philippines Accounting Standards (PASs) are the accounting standards in the Philippines and are primarily composed of the International Financial Reporting Standards (IFRS). The PFRSC adopted most IFRS, in some cases with modifications, and in other cases, the latest update to the IFRS has not yet been implemented.
The PFRS apply to all societies with public accountability:
- Entities whose securities are listed in a public market or are in a process of listing
- All financial institutions including: banks, insurance companies, security brokers, pension funds, mutual funds, investment banking entities
- Public utilities
- Other economically significant entities defined as total assets in 2004 of at least 250 million pesos (USD 5mn.) or liabilities of at least 150 million (USD 3mn.)
The IFRS for SMEs was adopted in the Philippines as of January 1st 2010 and is called the Philippines Financial Reporting Standards for SMEs (PFRS for SMEs). In 2009, the Philippines SEC defined an SME as an entity if:
- The entity has total assets of between P3 million and P350 million or total liabilities of between P3 million and P250 million
- It is not required to file financial statements under SRC Rule 68.1
- It is not in the process of filing its financial statements for the purpose of issuing any class of instruments in a public market
- It is not a holder of a secondary license issued by a regulatory agency, such as a bank (all types of banks), an investment house, a finance company, an insurance company, a securities broker/dealer, a mutual fund and a pre-need company; and
- It is not a public utility
For more information on the situation of the Accounting Standards in the Philippines, click here.