The development of gaap in the philippines is formalized through the creation of picpa.
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THE EVOLUTION OF FINANCIAL ACCOUNTING STANDARDS IN THEPHILIPPINESNote: The contents of this handout ay more on dates, evolution ng accountingstandards and transitions sa pagpapalit nung mga standards plus yung mga counciland standard bodies mismo. Subukan ko i-highlight lang yung mahalaga pero muchbetter kung balikan niyo kahit saglit yung buong lecture at baka may ma-miss ako.Thanks!INTRODUCTIONAccounting Law of 1923-establishment of BOA-certificate distribution to CPA Passers-formal recognition to accountingprofession1929-establishment of the PhilippineInstitute of AccountantsNovember 18, 1981-creation of Accounting StandardsCouncil1997-shift from US GAAP to IAS and IFRSNovember 2004 and January 2005-revision and shift from IAS to PAS andIFRS to PFRS facilitated by ASCTHEORETICAL CONSTRUCTGenerally Accepted Accounting Principles (GAAP)- principles that have substantial authoritative support- vary from country to country due to differences and this can cause problems inmultinational companiesInternational Accounting Standards Committee (IASC)- established in 1973 to develop international accounting standards- objectives:1. develop a single set of high quality, understandable global accounting standards2. promote the use of these standards3. bring about convergence of national and international accounting standards- issued 41 accounting standards- also issued 8 accounting standards of its own calledInternational FinancialReporting Standards(compliance is voluntary)ACCOUNTING STANDARDS SETTLER IN THE PHILIPPINESAccounting Standards Council (ASC)- created in November 18, 1981 to establish and improve GAAP in the Philippines- funded by thePhilippine Institute of Certified Public Accountant (PICPA)-annual subsidy: 50,000 pesos- composed of the ff: Show
Objectives: Introduce the practice of accountancy in the Philippines Introduce the accounting standards and standard setters both in the Philippines and international List of Accounting Standards Conceptual Framework Types of Accounting Code of Ethics The Accounting ProfessionThe LawRepublic Act No. 9298 The practice of accountancy in the Philippines is regulated by the law, “Republic Act No. 9298”, more commonly known as the “Philippine Accountancy Act of 2004.” You may read the said law in this link, Republic Act 9298 , thanks to the PRC – BOA website. The Governing BodyProfessional Regulatory Commission – Board of Accountancy The Board of Accountancy is the body authorized by law to promulgate rules and regulations affecting the practice of accountancy profession in the Philippines. Website: Boa.com.ph The National OrganizationPhilippine Institute of Certified Public Accounts (PICPA) The accredited national professional organization of accountants in the Philippines; its international counterpart is the International Federation of Accountants of IFAC. Website: www.picpa.com.ph Generally Accepted Accounting Principles / Accounting standardsGenerally Accepted Accounting Principles
INTERNATIONAL International Financial Reporting Standards (IFRS) – published by IASB International Accounting Standards (IAS) – pronouncements made by the IASC PHILIPPINES Philippine Financial Reporting Standards (PFRS) – published by ASC, adopted by FRSC Philippine Accounting Standards (PAS) – published by ASC, adopted by FRSC Purpose of the Accounting Standards– To identify PROPER ACCOUNTING PRACTICES for the preparation and presentation of financial statements. – Financial statements shall therefore comply, with ALL APPLICABLE accounting standards. The Accounting Standard SettersINTERNATIONAL/WORLDWIDEIASB – International Accounting Standards Board – Formerly known/supersedes the International Accounting Standards Committee or IASC – the IASC private sector body with the objective of achieving uniformity in the accounting principles which are used by business and other organizations for financial reporting around the world
– The IASB’s objective is to raise the quality and consistency of financial reporting and to have a platform of high quality and improved standards – based on our research, IASB has no formal website but their issued accounting standards can be found in this website: IFRS, IFRIC and the IFRS Home Page IFRIC –International Financial Reporting Interpretations Committee – Formerly known/supersedes the Standing Interpretations Committee or SIC PHILIPPINESFRSC – Financial Reporting Standards Council – Formerly known/supersedes the Accounting Standards Council or ASC – The accounting standard setting body created by the Professional Regulation Commission (PRC) upon recommendation of the Board of Accountancy (BOA) to assist the BOA in carrying out its powers and functions provided under R.A Act No. 9298. Its main function is to establish and improve accounting standards that will be generally accepted in the Philippines. – Based on our research, FRSC has no formal website but their issued accounting standards can be found in the website of PICPA: FRSC and for PIC below PIC – Philippine Interpretations Council – Formerly known/supersedes the Interpretations Committee (IC) – Its role is to prepare interpretations of PFRS “to give authoritative guidance” for approval by FRSC and in the context of the Conceptual Framework. – provides timely guidance on financial reporting issues not specifically addressed in the current PFRS Conceptual Framework– Summary of terms and concepts that underlie the preparation and presentation of financial statements – The underlying theory for the development of accounting standards and revision of previously issued accounting standards – Foundation on which financial statements are constructed – Platform from which accounting standards are developed and revised. – Concerned with General Purpose Financial Statements, including consolidate financial statements. Special purpose financial statements are outside the scope of the Conceptual Framework Types of AccountingImages from: Account4itbooks.com, Platformproject.eu, livemint.com and sutisoft.com Financial Accounting – is primarily concerned with the recording of business transactions and the eventual preparation of financial statements, which is the general purpose financial statements intended for internal and external users Management Accounting –emphasizes developing accounting information for use within the entity, or for internal users only. This type of accounting is mainly concerned with decision-making of the entity. Government and Non-Profit Accounting – this is concerned with accounting for all the transactions and the preparation of financial statements for government and non-profit/charitable organizations. Public Accounting – an accountant in the public practice can perform the following services:
Accountant’s Code of EthicsVisit Link at: CPA Ethics from IFAC ResourcesBooks Theory of Accounts Volume 1 by Conrado and Christian Valix Websites Click to access IRR_cpa.pdf http://boa.com.ph http://www.picpa.com.ph/frsc.html?article=About%20FRSC%20and%20PIC&page=FRSC http://www.ifrs.orghttp://www.ifrs.org/issued-standards/list-of-standards/ http://www.ifrs.org/issued-standards/list-of-interpretations/ http://www.picpa.com.ph/frsc.html?article=Philippine%20Financial%20Reporting%20Standards&page=FRSC&main_menu=PFRSs http://www.picpa.com.ph/frsc.html?article=PIC%20Q%26As&page=FRSC&main_menu=PICQAs http://www.picpa.com.ph http://www.picpa.com.ph/content.html?article=Mission%20/%20Vision&page=About Click to access 630201615361700.pdf Click to access 21720171215650.pdf http://html5.epaperflip.com/?docid=9c3c49a0-9d06-49e1-b666-a5600137e9a9 Click to access ifac-code-of-ethics-for.pdf What are the GAAP in the Philippines?Regulations - Guidelines and Other Regulations
The Philippine Financial Reporting Standards (PFRS)/Philippine Accounting Standards (PAS) are the new set of Generally Accepted Accounting Principles (GAAP) issued by the Accounting Standards Council (ASC) to govern the preparation of financial statements.
How was GAAP established?Generally Accepted Accounting Principles were eventually established primarily as a response to the Stock Market Crash of 1929 and the subsequent Great Depression, which were believed to be at least partially caused by less than forthright financial reporting practices by some publicly-traded companies.
Who established GAAP Philippines?Philippines Financial Reporting Standards Council (FRSC), established by the Board of Accountancy (a government agency) in 2006, establishes generally accepted accounting principles in the Philippines.
When was the PICPA established in the Philippines?The PICPA was founded in 1929 and is the accredited professional accountancy organization by the Philippines Professional Regulation Commission (PRC).
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