[ACYFAR1] Standard-Setting Bodies

• The accounting standard-setting bodies are: (1) the International Accounting Standards Board, (2) the International Financial Reporting Standards Interpretations Committee, (3) the Financial Reporting Standards Committee, (4) and the Philippine Interpretations Committee.
• The International Accounting Standards Board is an independent, private sector body that issues accounting standards called International Financial Reporting Standards.
• The IASB was formed in 2001 to replace the International Accounting Standards Committee.
• Accounting standards issues by the IASC are called International Accounting Standards, which are now adopted by the IASB.
• The IFRSs are developed through the IASB due process, wich involves various interested individuals around the world.
• The IASB due process involves the following stages: (1) setting and planning the project agenda, (2) development and publication of the discussion paper, (3) development and publication of the exposure draft, (4) development and publication of a finalized accounting standard, (5) and post-standard publishing procedures.
• The International Financial Reporting Standards Interpretations Committee develops authoritative interpretations of existing IAS and IFRS (called IFRIC Interpretations) and provides guidance on financial reporting issues not specifically addressed by IAS and IFRS.
• An IFRIC interpretation becomes part of the IFRS once they are approved by the IASB.
• Before 2001, the IASB's interpretative body is called the Standards Interpretations Committee. It was reconstituted to the IFRSIC.
• The Financial Reporting Standards Council is the accounting standards-setting body in the Philippines established by the Professional Regulation Commission (PRC) under the Implementing Rules and Regulations of the Republic Act No. 9298, to assist the Board of Accountancy (BOA) in carrying out its power and function in promulgating accounting standards in the Philippines.
• The FRSC replaces the Accounting Standards Council, which was created by the Philippine Institute of Certified Public Accountants (PICPA).
• The FRSC's primary function is to establish generally accepted accounting principles in the Philippines.
• The accounting standards issued by the FRSC are called Philippine Accounting Standards and Philippine Financial Reporting Standards. These constitute the highest hierarchy of GAAP in the Philippines.
• The IFRS Foundation created another standard-setting board, the International Sustainability Standards Board that sets IFRS Sustainability Disclosure Standards on how a company discloses information in the financial statements about sustainability-related factors.
• The Philippine Interpretations Committee was established by the FRSC in 2006 to develop authoritative interpretations of existing PAS and PFRS and provide guidance on financial reporting issues not specifically addressed in PAS and PFRS.
• A PIC interpretation becomes part of the PFRS once they are approved by the FRSC.
• PIC replaces the Interpretations Committee established by the ASC in 2000.
• The due process of the IASB has 4 characteristics: (1) it is an independent standard-setting board, (2) standards are made through a systematic process, (3) it engages with investors, regulators, business leaders, and the global accountancy profession at every stage of the process, and (4) it has collaborative efforts with world-wide standard setting communities.
• The 3 types of pronouncements made by the IASB are (1) the Conceptual Framework for Financial Reporting (CFAS), (2) the International Financial Reporting Standards (IFRS), and (3) the IFRS Interpretations.
• The hierarchy of what companies must first look into is as follows: (1) The IFRS, (2) the CFAS, and (3) the pronouncements of other standard-setting bodies that use similar conceptual framework.
• The Accounting Standards or the GAAP is a network of rules or procedures that represent generally accepted accounting rules at a particular time.
• Establishing GAAP is a social process.
• The US GAAP consists of the Financial Accounting Standards Board and the Statement of Financial Accounting.
• The IFRS Foundation's 3-tier structure includes the (1) Monitoring Board, (2) Governance, (3) Board and Interpretations Committee
• The PFRS is for profit-oriented organizations.
• Accounting concepts are derived from experience, inductive reasoning, and pragmatism.
• Generally accepted accounting principles derive their credibility and authority from general recognition and acceptance by the accounting profession.
• To qualify as generally accepted, accounting principles must receive substantial authoritative support.
• Accounting concepts are human-made and are components of accounting theory.
• Accounting theory can be described as a coherent set of hypothetical, conceptual, and pragmatic principles that form a general frame of reference for a field of inquiry.
• The FASB publishes standards called the Statement of Financial Accounting Standards.
• The Norwalk Agreement is a memorandum of agreement made between IASB and FASB (US) with the goal of achieving comparability in financial reporting standards by eliminating or minimizing differences between IFRS and US GAAP.
• The IFRS Advisory Council is the formal advisory body to the International Accounting Standards Board (Board) and the Trustees of the IFRS Foundation.
• IFRIC Interpretations are made to evaluate, improve and support the current standards.
• The FSRSC due process is the following: (1) consideration of pronouncement of IASB, (2) formation of a task force, when deemed necessary, to give advice to the FSRSC, (3) issuing for comment an exposure draft approved by a majority of the FSRSC members;

  (comment period 30 – 60 days), (4) consideration of all comments received within the comment period and, when appropriate,

  preparing a comment letter to the IASB, and (5) approval of a standard or an interpretation by a majority of the FSRSC members.
• The primary purpose of the Securities and Exchange Commission is to ensure that investors have adequate information.