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    PFRS For SEs

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    Risalyn Biong
    The PFRS for SEs financial reporting framework provides a simpler set of accounting requirements for small entities compared to PFRS for SMEs and full PFRS. Key differences include: 1) PFRS for SEs does not require a statement of comprehensive income or changes to equity from sources other than profit/loss; 2) accounting policy changes under PFRS for SEs are recognized through an adjustment to retained earnings rather than restating comparatives; 3) PFRS for SEs uses a lower of cost or selling price approach for inventories versus PFRS for SMEs/full PFRS approach of lower of cost or net realizable value. PFR

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    PFRS For SEs

    Uploaded by

    Risalyn Biong
    153 views2 pages
    The PFRS for SEs financial reporting framework provides a simpler set of accounting requirements for small entities compared to PFRS for SMEs and full PFRS. Key differences include: 1) PFRS for SEs does not require a statement of comprehensive income or changes to equity from sources other than profit/loss; 2) accounting policy changes under PFRS for SEs are recognized through an adjustment to retained earnings rather than restating comparatives; 3) PFRS for SEs uses a lower of cost or selling price approach for inventories versus PFRS for SMEs/full PFRS approach of lower of cost or net realizable value. PFR

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    PFRS for SEs

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    The PFRS for SEs financial reporting framework provides a simpler set of accounting requirements for small entities compared to PFRS for SMEs and full PFRS. Key differences include: 1) PFRS for SEs does not require a statement of comprehensive income or changes to equity from sources other than profit/loss; 2) accounting policy changes under PFRS for SEs are recognized through an adjustment to retained earnings rather than restating comparatives; 3) PFRS for SEs uses a lower of cost or selling price approach for inventories versus PFRS for SMEs/full PFRS approach of lower of cost or net realizable value. PFR

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    153 views2 pages

    PFRS For SEs

    Uploaded by

    Risalyn Biong
    The PFRS for SEs financial reporting framework provides a simpler set of accounting requirements for small entities compared to PFRS for SMEs and full PFRS. Key differences include: 1) PFRS for SEs does not require a statement of comprehensive income or changes to equity from sources other than profit/loss; 2) accounting policy changes under PFRS for SEs are recognized through an adjustment to retained earnings rather than restating comparatives; 3) PFRS for SEs uses a lower of cost or selling price approach for inventories versus PFRS for SMEs/full PFRS approach of lower of cost or net realizable value. PFR

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    © All Rights Reserved
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    of 2

    BIONG, RISALYN L.

    BSA-5A

    1. What is the difference between PFRS for SEs and the already existing PFRS for SMEs and full
    PFRS?
    a. Financial Statement Presentation

    Complete set includes: PFRS for SEs PFRS for SMEs Full PFRS
    Statement of Financial / / /
    Position
    Statement of Income / / /
    Statement of X / /
    Comprehensive Income
    Statement of Changes / / /
    in Equity
    Statement of Cash / / /
    Flows
    Notes, with summary / / /
    of accounting policies
    and explanatory
    information
    If changes to equity / / X
    during period arise
    from:

    - Profit/loss
    - Payment of
    dividends
    - Correction of
    prior year
    errors
    - Changes in
    accounting
    policy

    b. Accounting Policies, Estimates and Errors

    PFRS for SEs PFRS for SMEs Full PFRS


    How recognized? Adjust the opening Restate the earliest period presented and each
    balance of current year comparative period as if the policy had always
    retained earnings applied, to the extent practicable
    Is restatement of No Yes Yes
    comparative
    information needed?
    Is third balance sheet N/A No Yes
    needed?
    c. Inventories

    PFRS for SEs PFRS for SMEs and full PFRS


    Lower of Cost or Market value Lower of Cost or estimated
    (Probable selling price) selling price less cost to
    complete and sell

    2. What is the quantitative threshold to qualify for PFRS for SEs?

    A. Total assets must be P3 million – P100 million, or


    Total liabilities is P3 million – P100 million
    B. If the entity is a parent company, the said amounts shall be based on the consolidated figures.

    3. What are the instances when a business qualified to apply the PFRS for SEs may opt to use PFRS
    for SMEs or full PFRS instead?

    a. A small entity with group affiliations reporting under or moving towards:


    - Full PFRS or PFRS for SMEs, or
    - Full IFRS or IFRS for SMEs.
    b. Has short term projection that show that it will breach the quantitative thresholds and
    the breach is expected to be significant and continuing due to its long-term effect on the
    company’s asset size;
    c. Has been preparing financial statements using full PFRS or PFRS for SMEs and has
    decided to liquidate;
    d. Such other cases that the Commission may consider as valid exceptions from the
    mandatory adoption of PFRS for Small Entities.

    4. How do you think this new financial reporting framework will help small businesses?
    By reducing choices for accounting treatment, eliminating topics that are not generally
    relevant to small entities, simplifying methods for recognition and measurement, and reducing
    disclosure requirements, the PFRS for Small Entities allows small entities to comply with the financial
    reporting requirements without undue cost or burden.

    Sources:
    https://www.acpaci.com.ph/images/materials/Session_4_Genalin_Arevallo_PFRS_for_SE_SME_Full.pdf
    http://www.sec.gov.ph/wp-
    content/uploads/2018/04/2018PressRelease_SimplifiesFinancialReportingForSmallCompanies.pdf

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