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Accounting, General, SEC Reporting

SEC Defers Implementation of New Accounting Standards (PFRS 9)

Source: Daily Tribune (5/31/2012)

IMPLEMENTATION of new rules covering corporate financial reporting has been deferred by the Securities and Exchange Commission (SEC).

The regulator, following an en banc meeting last May 24, released a memorandum stating that the effectivity date of Philippine Financial Reporting Standard 9 (PFRS 9) would be moved to Jan. 1, 2015 from the earlier-announced Jan. 1, 2013.

A reason was not provided and SEC officials were not immediately available for comment.

Adoption of PFRS 9 form part of the regulator’s bid to align its rules with global reporting standards. The initial rules covering its implementation were issued in May last year.

Required to adopt the accounting new rules are large companies with assets of over P350 million and total liabilities of P250 million, along with small and medium enterprises (SMEs) that have availed of exemptions from using the new reporting standard for start-ups.

In addition to the change to the PFRS 9 implementation date, the SEC also modified its guidelines requiring covered companies to submit an impact assessment of their early adoption of the reporting standard.

Under the revised rules, interim financial statements submitted beginning June 30 until June 30, 2014 — instead of beginning Sept. 30 last year — should indicate whether the firm had conducted an evaluation on the possible financial impact of the PFRS 9 adoption on operations, and issue an explanation if it had not done so.

If the company conducted an impact evaluation, the interim financial statement should also state if the firm will adopt PFRS 9 in its annual financial reporting for the current year.

If the company decides to pursue PFRS 9 adoption, a discussion on the quantitative and qualitative results of the company’s impact evaluation should be included in its financial reporting.

Penalties will be imposed on companies that fail to meet the new guidelines, the SEC said.

Please see SEC Memo Circular No. 3, Series of 2012 for the copy of the implementation guidance.

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About leecpa

Orlando Calundan is a Certified Public Accountant. He has exposures in audit of financial statements of entities in various industries such as real estate, food (quick service restaurants), manufacturing, service organizations and BPOs, automotive, holding/investment companies and more. He also has exposure on internal audit engagements. http://calundan.co

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