Philippine Public Sector Accounting Standard 3

ACCOUNTING POLICIES, CHANGES IN ACCOUNTING ESTIMATES AND

ERRORS

Table of Contents

PAG
Number
BACKGROUND

INTRODUCTION TO THE IPSAS 3

PHILIPPINE APPLICATION GUIDANCE TO IPSAS 3

Scope 1

Effective Date 2

PPSAS 3- Accounting Policies, Changes in Accounting Estimates and Errors

January 2014 Page 2
 Philippine Public Sector Accounting Standard 3
Accounting Policies, Changes in Accounting Estimates and Errors

Background

This Philippine Public Sector Accounting Standard (PPSAS) 3 consists of International Public
Sector Accounting Standard (IPSAS) 3, “Accounting Policies, Changes in Accounting Estimates
and Errors,” and the Philippine Application Guidance (PAG) prepared to suit the Philippine
public sector situation.

The IPSAS 3 was issued in May 2000 and revised in December 2006 by the International
Public Sector Accounting Standards Board (IPSASB) of the International Federation of
Accountants (IFAC). This includes amendments resulting from IPSASs issued up to January
15, 2012.

The PAG (in italics) provides supplementary guidance on the proper implementation of
IPSAS 3.

Introduction to the IPSAS 3

IPSAS 3 prescribes the criteria for selecting and changing accounting policies, together with
the accounting treatment and disclosure of changes in accounting policies, changes in
accounting estimates, and the corrections of errors.

This Standard is intended to enhance the relevance and reliability of an entity’s financial
statements and the comparability of those financial statements over time and with the
financial statements of other entities.

Philippine Application Guidance to IPSAS 3

Scope

PAG1. Paragraph 5 deals with the applicability of this Standard to all public sector entities
other than Government Business Enterprises (GBEs).

GBE is an entity that has all the following characteristics: (a) Is an entity with the
power to contract in its own name; (b) Has been assigned the financial and
operational authority to carry on a business; (c) Sells goods and services, in the
normal course of its business, to other entities at a profit or full cost recovery; (d) Is
not reliant on continuing government funding to be a going concern (other than
purchases of outputs at arm’s length); and (e) Is controlled by a public sector entity.

This standard shall be applied to all National Government Agencies (NGAs), Local
Government Units (LGUs) and Government-Owned and/or Controlled Corporations
(GOCCs) not considered as GBEs.

PPSAS 3- Accounting Policies, Changes in Accounting Estimates and Errors

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Effective Date

PAG2. This PPSAS shall apply for annual financial statements covering periods beginning
January 1, 2014.

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