STANDARD - SETTING BODY

GENERALLY ACCEPTED ACCOUNTING

PRINCIPLES (GAAP)

• These are the rules, procedures,

practices and standards followed in the
preparation and presentation of
financial statements.
ACCOUNTING STANDARDS COUNCIL
(ASC)
– Created on November 18, 1981

– Develop accounting principles

– Approved statements
• Statements of Financial Accounting Standards

– The overall purpose of accounting standards is to

identify proper accounting practices for the
preparation and presentation of financial
statements.
FINANCIAL REPORTING STANDARDS
COUNCIL (FRSC)
– Replaces ASC

– The main function is to establish and improve accounting standards

that will be generally accepted in the Philippines.

– Composed of 15 members with a chairman (senior accounting

practitioner) and 14 representatives from the ff: 1 (BOA), 1 (SEC), 1
(BSP), 1 (BIR), 1 (COA), 1 (major org. of prep. And users of FS), 2 each
from ACPACI, GACPA, ACPAE and ACPAPP.

– The chairman and members have a term of 3 years renewable for

another term.

– Issues standards in a series of pronouncements

• PHILIPPINE FINANCIAL REPORTING STANDARDS (PFRS)
 INTERNATIONAL ACCOUNTING
STANDARDS COMMITTEE
• An independent private sector body
with the objective of achieving
uniformity in the accounting principles
which are used by business and other
organizations for financial reporting
around the world.
• Approved statements are known as
International Accounting Standards
(IAS)
INTERNATIONAL ACCOUNTING STANDARDS
BOARD (IASB)
• Replaces IASC

• Pronouncements are called International Financial

Reporting Standards (IFRS)

• Factors considered in deciding to move towards IAS

– Support of IAS by Phil. Orgs. (SEC, BOA and PICPA)
– Increasing internalization of business which has heightened
interest in a common language for financial reporting.
– Improvement of IAS or removal of free choices of accounting
treatments
– Increasing recognition of IAS by the World bank, Asian
Development Bank, and World Trade Organization