CFAS

• Financial accounting


  The process that culminates in the preparation of financial reports on the enterprise for use by both internal and external parties
• Financial statements


  The principal means through which a company communicates its financial information to those outside it
• Financial Statements


  • Statement of financial position
  • Income statement or statement of comprehensive income
  • Statement of cash flows
  • Statement of changes in equity
• Objective of financial reporting

  To provide financial information about the reporting entity that is useful to present and potential equity investors, lenders, and other creditors in making decisions about providing resources to the entity
• Financial statements provide at the least cost the most useful information possible to a wide variety of users
• Financial statements are the output where users can use to enhance their decisions
• Primary user groups of financial statements

  • Equity investors
  • Creditors
• Entity perspective


  The company is viewed as being separate and distinct from its investors (both shareholders and creditors)
• Decision-usefulness


  Information contained in the financial statements should help investors assess the amounts, timing, and uncertainty of prospective cash inflows from dividends or interest, and the proceeds from the sale, redemption, or maturity of securities or loans
• Accounting


  Information about business
• Business transactions


  Economic effect that is recognized in books
• Financial Accounting


  Focused on the recording of business transactions and the periodic preparation of reports on financial position and results of operations
• Management Accounting


  A profession that involves partnering in management decision making, devising planning and performance management systems, and providing expertise in financial reporting and control to assist management in the formulation and implementation of organization's strategy
• Areas of Accounting


  • Public - Auditing firms
  • Private - companies
  • Government - BIA, COA, or within government sector
  • Academe - professors or intructors
• Services of Accounting


  • Accounting - financial statements
  • Auditing - independent practitioners who checks financial statements. They provide confidence to clients about their decisions
  • Taxation - tax related
  • Management Advisory Services - provide consultancy
• R.A. 9298 or Philippine Accountancy Act of 2004 outlines regulations of accountancy and gives designation to CPA
• IASB


  International Accounting Standards Board - the main international standard setting organization that issued IFRS
• IASB replaced IASC in 2001
• IASB holds no authority to require compliance with its accounting standards
• IASB


  It is appointed by trustees that have 14 members where 3 members may be part-time members. They have a term of five years that is renewable once.
• IASC


  International Accounting Standards Committee - formed in 1973 and issued 41 IAS
• IFRS


  International Financial Reporting Standards - are used by most foreign exchanges
• IFRS Foundation


  It appoints members, reviews effectiveness, and helps in fundraising efforts for these organizations. It has 22 trustees with a term of three years that is renewable once.
• IFRS Foundation is the new name of the IASC Foundation which has been approved in January 2010 and the change formally took effect on July 1, 2010
• IFRSIC


  IFRS Interpretations Committee - formerly known as IFRIC. It assists the IASB through the timely identification, discussion, and resolution of financial reporting issues within the framework of IFRS. It has 14 members and the term is renewable every 3 years. It shall meet as and when required and 10 voting members shall constitute a quorum.
• IFRS Advisory Council


  Formerly called the Standards Advisory Council. They provide advice and council to the IASB on major policies and technical issues. It has 30 or more members that are appointed by the trustees and has renewable terms of three years. They meet at least two times a year.
• ASC


  Accounting Standard Council - the original accounting standard setting body in the Philippines. It was created by PICPA on November 19, 1981 and was composed of 8 members, 4 from PICPA including the chairman, and 1 each from SEC, BSP, CB, PRC, and FINEX.
• PAS


  Philippine Accounting Standards - adopted from IAS
• PFRS


  Philippine Financial Reporting Standards - adopted from IFRS
• In 1997, the ASC decided to move to IAS. The Philippine transition to IAS was effective from 2001.
• FSRSC


  Financial Sustainability Reporting Standards Council - the new accounting standard setting body in the year of 2004 because of R.A. 9298. It has 15 members including the chairman.
• PIC


  Philippine Interpretation Committee - formed by FSRSC in August 2006. It adopted interpretations from IASB.