CFAS

• The term financial reporting framework is a set of criteria used to determine measurement, recognition, presentation and disclosure of all material items appearing in the financial statements
• Components of the Financial Reporting Framework

  • The objective of general purpose financial reporting
  • Qualitative characteristics of useful financial information
  • Financial statements and the reporting entity
• The objective of financial statements


  To provide information about the entity's assets, liabilities, equity, income and expenses for users in assessing the prospects for future net cash inflows to the entity and management's stewardship of the entity's resources
• Elements of financial statements

  • Elements directly related to financial position
  • Elements directly related to performance
• Recognition and derecognition


  The process of incorporating in the balance sheet or income statement an item that meets the definition of an element
• Measurement


  Involves assigning monetary amounts at which the elements of the financial statements are to be recognized and reported
• The overall purpose of accounting standards is to identify proper accounting practices for the preparation and presentation of financial statements, thus creating a common understanding between preparers and users of financial statements particularly the measurement of assets and liabilities and likewise to ensure comparability and uniformity in financial statements based on the same financial information
• Financial Reporting Standards Council (FRSC)

  Replaces the ASC and to establish and improve accounting standards that will generally be accepted in the Philippines
• The Philippine Interpretation Committee (PIC)


  Formed by the FRSC and replaced the IC formed by the ASC in May 2006. Its role is to prepare interpretations of PFRS for approval by the FRSC
• International Accounting Standards Committee (IASC)

  An independent private sector body whose objective is to formulate and publish in the public interest accounting standards to work generally for the improvement and harmonization of regulations, accounting standards and procedures to the presentation of financial statements
• International Accounting Standards Board (IASB)


  Replaces the IASC and publishes standards in a series of pronouncement called International Financial Reporting Standards (IFRS)
• The law regulating the practice of accountancy in the Philippines is Republic Act No. 9298 known as the "Philippine Accountancy Act of 2004"
• The Board of Accountancy (BOA)

  The body authorized by law to promulgate rules and regulations affecting the practice of the accountancy profession in the Philippines. It is also responsible for preparing and grading the Philippine CPA examination
• Single practitioners and partnerships for the practice of public accountancy shall be registered certified public accountants in the Philippines. The SEC shall not register any corporation organized for the practice of public accountancy
• Areas where CPAs generally practice their profession

  • Public Accounting
  • Private Accounting
  • Government Accounting
• Continuing Professional Development (CPD)


  Republic Act No. 10912 is the law mandating the strengthening the continuing professional program for all regulated professions, including the accountancy profession in order to raise and enhance the technical skill and competence of the CPA
• The required credit hours for renewal of the CPA license and accreditation of a CPA to practice the accountancy profession every three years is 120 credit units in a compliance period of three year
• Upon reaching the age of 65 years, a CPA shall be permanently be exempted from CPD only to the renewal of CPA license and not for the purpose of accreditation to practice the accountancy profession