Accounting Alerts

PIC Financial Reporting Guidance (June 2021 Edition)

This Accounting Alert is issued to circulate Philippine Interpretations Committee (PIC) June 2021 edition of the Financial Reporting Guidance (FRG).

Overview

The Financial Reporting Standards Council (FRSC) and PIC have recently approved the issuance of the June 2021 edition of the FRG. The FRG publication contains guidance on recurring financial reporting issues which is, in large part, based on the final decisions and rejection notices of the International Financial Reporting Standards Interpretations Committee (IFRIC), the interpretations body supporting the International Accounting Standards Board.

Content of the Publication

When it comes to accounting for their transactions and disclosing the required information in their financial statements, companies in the Philippines have been consistently applying Philippine Financial Reporting Standards (PFRS) since the adoption of these standards in 2005. However, preparers of financial statements oftentimes encounter instances where there is no explicit guidance in the PFRS applicable to specific transactions. Thus, there is a need to supplement PFRS through the issuance of PIC Q&As which are approved and adopted by the FRSC. The FRG aims to (1) provide continuous and up-to-date guidance on emerging issues elevated to the IASB or the IFRIC, (2) to provide additional guidance to both the preparers and the users of the financial statements about complex financial reporting issues, and (3) provide guidance, with a simplified discussion of the basis for the final decisions reached by the IASB and IFRIC, for ease of reference and understanding.

The FRG is updated from time to time to keep readers up-to-date on any future changes in the financial reporting framework.

The following list contains additional financial reporting issues in this edition for which implementation guidelines have been approved the PIC from August 1, 2019 to June 1, 2021, grouped according to the related standards:

1. PFRS 15, Revenue from Contracts with Customers

a. Training Cost to Fulfil a Contract

2. PFRS 16, Leases

a. Definition of a Lease - Decision-making Rights

b. Sale and Leaseback with Variable Payments

 

See attached Financial Reporting Guidance for further details.