Module # 1 of a business within the organization.
It
Conceptual Framework - Provides the provides financial information to internal
underlying foundation for financial users.
reporting. It outlines the objectives of the
general purpose of financial reporting. Government accounting
Cost accounting
Accounting standards - Refer to the Tax accounting
specific rules and guidelines issued by Estate accounting
standard setting bodies that govern financial Auditing
transactions and events that are recorded and Fiduciary accounting
reported in the financial statements. Social accounting
Institutional accounting
Financial statements - structured Accounting research
representation of the financial performance, Accounting systems
position, and cash flow of an entity.
Three Important Activities
Identifying - Analyzing events and Module # 5
transactions to determine whether to Conceptual Framework - Fundamental
recognize or not. document that underpins financial reporting.
Measuring - Involves assigning monetary Conceptual Framework does not have the
value to economic transactions and events. same authority as the PFRS (PHILIPPINE
FINANCIAL REPORTING STANDARDS)
Communicating - Process of transforming
economic data into useful accounting ROLES:
information. (preparation of financial ● Guides the development of new
statement, income statement, statements to accounting Policies
changes in equity, cash flow statement, and ● Provides the underlying
notes to financial statement) general-purpose financial reporting
● Provides the objectives of financial
COMMON BRANCHES OF reporting
ACCOUNTING ● Provides the qualitative
characteristics of useful financial
Financial statement - Branch of accounting statements
that handles the provided financial ● The definitions and recognition
information to external users. criteria for the element of financial
statements
Management accounting - The branch of ● Serves as a valuable reference
accounting that handles the decision making
Concept of capital maintenance -
SCOPE OF CONCEPTUAL Framework discusses different concepts of
FRAMEWORK capital(financial and physical) and how
capital maintenance can be achieved,
essential in determining the sustainability of
Objectives of Financial Reporting - primary the entity.
goal is to provide financial information
about reporting entity
KEY REGULATIONS
Qualitative Characteristics of useful
financial information - FUNDAMENTAL: 1. Philippine financial reporting
RELEVANCE AND FAITHFUL standard standard
REPRESENTATION 2. Philippine accounting standard
3. Conceptual framework of financial
Enhancing qualitative characteristics reporting
(VCUT) 4. Hierarchy of financial standards
● VERIFIABILITY
● COMOPARABILITY SELECTING ACCOUNTING POLICY
● UNDERSTANDABILITY I. PFRS Accounting standard
● TIMELESNESS II. In the absence of financial PFRS
that specifically applies to a
Elements of financial reporting - The transaction, management shall use
framework outlines the definitions of Assets, its judgement in developing and
Liability, equity, income, and expense applying an accounting policy that
● Assets, Liability, Equity - statement results information that is relevant
of financial position and reliable
● Income and expense - statement of
financial performance Judgement making
A.
Recognition and derecognition - Criteria I. The requirements in PFRS dealing
are established for determining when an with similar and related issues
item should be included in or removed from II. Conceptual Frameworks
financial statements B.
I. Pronouncements of other setting
Measurement - processes and bases used to bodies
determine the monetary amount II. Accounting literature and
accepted industry practices
Presentation and disclosure - guidelines of
how information are should presented Regulatory Bodies
Financial and sustainability reporting on how accounting standards should
standard council - standard setting body in be implemented
the Philippines tasked in establishing and 3. Board and accountancy - regulates
improving financial reporting standards. the
Operating under the oversight of Board of
Accountancy (BOA) and the Professional
Regulation Commission. Adopts the
International financial reporting standard to
the Philippine financial reporting standard.
Objectives of FSRSC
1. Adopting and establishing
financial reporting standard in the
philippines
2. Ensuring the alignment of PFRS
and IFRS
3. Continuously reviewing, revising
and improving existing standards
4. Providing guidance and
application and interpretation of
financial reporting
Philippine Interpretation Committee -
Assist in maintaining consistent application
of the Philippine financial reporting
standards.
Philippine Accountancy Act of 2004
Board of accountancy
OTHER RELEVANT ORGANIZATION
1. Financial and sustainability
reporting standard council - the
main setting bodies in the
Philippines responsible for adopting .
2. Philippine interpretation
committee - assist the FSRSC by
issuing guidance or interpretations