OVERVIEW OF CONCEPTUAL FRAMEWORK

PHILIPPINE FINANCIAL REPORTING STANDARDS INTERNATIONAL FINANCIAL REPORTING

STANDARDS
- PFRS give the purpose of the conceptual - IFRS give the purpose of financial reporting
framework which is to assist the Board in which is to assist the MASB to develop MFRS
developing standard. To help preparers develop Standards that are based on consistent concepts,
consistent accounting policies and to assist all to help preparers develop consistent accounting
parties to understand and interpret the policies and to assist all parties to understand
standards. and interpret the standards.
CHAPTER 1: THE OBJECTIVE OF GENERAL-PURPOSE FINANCIAL REPORTING
PHILIPPINE FINANCIAL REPORTING STANDARDS INTERNATIONAL FINANCIAL REPORTING
STANDARDS
- It talks about what types of useful information - In this chapter, it sets out what information is
is needed to help external users assess the needed to achieve that objective and who are the
amounts, timing and uncertainty about the future primary users of financial reports are.
net cash flows. - IFRS explains the objective of general-purpose
- PFRS states the objective of general-purpose financial reporting and the limitations of general-
financial reporting and limitations of general- purpose financial reporting in a more informative
purpose financial reporting in a concise way and way by discussing it one by one and explaining it
in essay form. further and by using bullets to emphasize
- It has information like financial flexibility, statements that are important.
liquidity and solvency, operating capability and - In IFRS, there are some topics like information
investing, financing and operating activities that about a reporting entity’s economic resources,
are not included in IFRS. claims against the entity and changes in
resources and claims and information about use
of the entity’s economic resources were
discussed unlike in PFRS it is not included there.
- It explained why information used in
assessing stewardship is needed to achieve the
objective of financial reporting. Users of financial
reports need information to help them assess
management’s stewardship. The Conceptual
Framework expressly talks about this need as
well as the need for information that helps users
assess the possibilities for future net cash
inflows to the entity.
CHAPTER 2: QUALITATIVE CHARACTERISTICS OF USEFUL FINANCIAL INFORMATION
PHILIPPINE FINANCIAL REPORTING STANDARDS INTERNATIONAL FINANCIAL REPORTING
STANDARDS
- It talks about the fundamental and enhancing - In this chapter it expounds what makes
qualitative characteristics of financial financial information useful.
information - When it comes to the definition of relevance it
- In the definition of relevance, they have the has the meaning with PFRS, but the
same meaning but for the definition of difference is that after discussing the predictive
predictive and confirmatory value, PFRS value and confirmatory value, it talks through the
expound more. interrelation of predictive value and
- It explains here why materiality is a practical confirmatory value and it gives example to
boundary when achieving desired qualitative express the idea.
characteristics of relevance. - In materiality, they have the statement with
- The definition of faithful representation is PFRS.
presented direct to the point or the only - It explains further the definition of faithful
important phrase is presented and it does not representation and its three characteristics
explain further. which are complete, neutral and free from
- It does not include prudence when discussing error.
free from errors - It also explained here the role of prudence,
- For applying the fundamental qualitative measurement uncertainty and substance
characteristics, it enumerates steps on how to over form in assessing whether information
have effective and efficient process for is useful.
applying the fundamental qualitative - When it comes to applying the fundamental
characteristics. qualitative characteristics, it explains further
- When it comes to the definitions of and it gives example for it to express the ideas.
verifiability, timeliness and understandability, - Definitions of verifiability, timeliness and
the important or only the highlights of the topic understandability are explained in every detail.
are presented. - Going concern hasn’t been discussed but the
- There is an underlying assumption presented cost constraint on useful financial reporting
which is the going concern. was presented.
CHAPTER 3: FINANCIAL STATEMENTS AND THE REPORTING ENTITY
PHILIPPINE FINANCIAL REPORTING STANDARDS INTERNATIONAL FINANCIAL REPORTING
STANDARDS
- It discusses about the nature and objectives of - In this chapter, it describes the objective and
financial statements. the scope of financial statements and it
- Regarding to the objective of financial provides the description of the reporting entity
statements, it is states here that “to provide - In IFRS, the objective of financial statements
information about the financial position, stated that “to provide financial information
performance, and changes in financial about the reporting entity’s assets, liabilities,
position of an entity…” equity, income and expenses…” and it
- It has users and their needs to discuss who are enumerates the scope of financial statements.
the users of the financial statement and - In PFRS it has users and their needs while in IFRS
explains why they need such information like for it has reporting period that explains a
the potential investors, lenders and creditors reporting entity is the one who is required or to
to help them assess the possibilities for future choose, or prepare a financial statement.
net cash inflows to the entity. - It also has consolidated and unconsolidated
- It also has consolidated and unconsolidated financial statements to provide information
financial statements to provide information about assets, liabilities, equity, income and
about assets, liabilities, equity, income and expense.
expense.
CHAPTER 4: THE ELEMENTS OF FINANCIAL STATEMENTS
PHILIPPINE FINANCIAL REPORTING STANDARDS INTERNATIONAL FINANCIAL REPORTING
STANDARDS
- It discusses about the elements directly related - In this chapter, it defines the five elements of
to the measurement of financial position in the financial statements (asset, liability, equity,
statement of financial position are the asset, income and expenses).
liabilities and equity. - For the assets, they have the same description
- In PFRS, assets, liabilities, equity, income and for PFRS but here it explains further the three
expenses were explained briefly and give its
highlights but it does not explain further.
CHAPTER 5: RECOGNITION AND DERECOGNITION
PHILIPPINE FINANCIAL REPORTING STANDARDS
- It talks about the recognition and
derecognition concepts.
- In recognition, it discusses why recognition is
important and it has recognition criteria which
are relevance and faithful representation in a
brief explanation.
CHAPTER 6: MEASUREMENT
PHILIPPINE FINANCIAL REPORTING STANDARDS
- It discusses about the measurements of the
elements of financial statements.
- The definition for historical cost and current
value measurement was explained briefly.
aspects of definition for assets which are right,
potential to produce economic benefits and
control. It discusses one by one by giving the
meaning and explaining its benefits to
economic resource.
- In liabilities, just like in assets, the definition and
the three aspects of liabilities which are
obligation, transfer to economic resource and
present obligation as a result of past events was
explained one by one.
- It also included here the executory contracts, a
contract that is equally unperformed. It
establishes a single asset or liability for
the inseparable combined right and obligation
to exchange economic resources.
- The definition of equity was explained and also
it tackles here the definition of income and
expenses and its effects to equity.
INTERNATIONAL FINANCIAL REPORTING
STANDARDS
- In this chapter, it discusses criteria for
including assets and liabilities in financial
statements - recognition and guidance on when
to remove them derecognition.
- The definition of recognition was expounding
the limitation of the framework, also it shows
hereon how recognition links the elements
of financial statements through illustration.
- It also explains further the recognition criteria
and its example.
-The revised recognition criteria refer
explicitly to the qualitative characteristics of
useful information.
INTERNATIONAL FINANCIAL REPORTING
STANDARDS
- In this chapter, it describes various
measurement bases and discusses factors to be
considered when selecting a measurement
basis
- Definitions for historical cost and current value
measurement was discussed one by one with
much information
- Unlike PFRS, IFRS have a summary of
information provided by particular
measurement bases by showing it through a
 table of assets and liabilities
- Factors to consider when selecting a
measurement basis, characteristics of the
asset and liability, contribution of future
cash flow, more than one measurement basis,
etc. was explained fully.
-The revised Conceptual Framework describes
what information measurement bases provide
and explains the factors to consider when
selecting a measurement basis.
CHAPTER 7: PRESENTATION AND DISCLOSURE
PHILIPPINE FINANCIAL REPORTING STANDARDS INTERNATIONAL FINANCIAL REPORTING
STANDARDS
- In PFRS, this topic was explained very short but -In this chapter, it includes concepts on
for the main definition of the topic they have presentation and disclosure and guidance
almost the same meaning with IFRS. on including income and expenses in the
statement of profit or loss and other
comprehensive income.
- In IFRS, it discusses about presentation
and disclosure as communication tools,
presentation and disclosure objectives and
principles, classifications and aggregation that is
not presented to PFRS.
CHAPTER 8: CONCEPTS OF CAPITAL AND CAPITAL MAINTENANCE
PHILIPPINE FINANCIAL REPORTING STANDARDS INTERNATIONAL FINANCIAL REPORTING
STANDARDS
- For the description of concepts of capital and -Definition for concepts of capital has been
concepts of capital and maintenance just like in discussed with much information.
the past chapters, it was explained briefly unlike -It also includes concepts of capital and
in IFRS every topic was explained one by one. maintenance and the determination of profit
-It also has capital maintenance adjustments that
are not presented to PFRS.

SUMMARY
The IFRS are embraced in the
Philippines by the Financial
Reporting Standard
Council, under the oversight
of the Board of
Accountancy, and are given
as the
Philippines Financial Reporting
Standards (PFRS).
PFRS and IFRS are almost the
same it’s just in IFRS the topics
were explained
further while in PFRS the
definitions there are presented
briefly. Unlike PFRS, IFRS
have illustrations to show the
ideas that are discuss in the
chapter. Anyway, when it
comes to financial statement
they have the same details.
Despite of differences IFRS and
PFRS can help business
performance. First is to
guarantee informed for
decision-making,
the very essence of utilizing the
IFRS/PFRS is to guarantee
consistency in recording,
recognizing, measuring
financial transactions which
whenever followed
appropriately
will guarantee strength and
straightforwardness all
through the budgetary
detailing
procedure of the
organization. With this, it
will permit organizations
and individual
speculators to settle on educated
budgetary choices, as should be
obvious precisely what
has been going on with an
organization wherein they
wish to contribute. Increment
unwavering quality over the
budget reports
Utilizing IFRS advances
precision in setting up the
budget reports of a business.
For this to be
accomplished, the preparers
of the IFRS budget
summary must be
straightforward and skillful.
IFRS advances following the
code of morals by the expert
bookkeeper and asking the
preparer to be objective and
honest in their understanding of
the money related exchanges,
which will bring about less
errors or false fiscal reports.
Utilizing IFRS as a guide in
the budgetary detailing target
of any organization will
expand the interior authority
over their fiscal report
revealing, and guarantee that
clients
could depend more on the
figures being exhibited by the
organization's money related
announcing.
 SUMMARY

The IFRS are embraced in the Philippines by the Financial Reporting Standard Council, under the
oversight of the Board of Accountancy, and are given as the Philippines Financial Reporting Standards
(PFRS).

PFRS and IFRS are almost the same it’s just in IFRS the topics were explained further while in PFRS the
definitions there are presented briefly. Unlike PFRS, IFRS have illustrations to show the ideas that are
discuss in the chapter. Anyway, when it comes to financial statements, they have the same details.
Despite of differences IFRS and PFRS can help business performance. First is to guarantee informed for
decision-making, the very essence of utilizing the IFRS/PFRS is to guarantee consistency in recording,
recognizing, measuring financial transactions which whenever followed appropriately will guarantee
strength and straightforwardness all through the budgetary detailing procedure of the organization.
With this, it will permit organizations and individual speculators to settle on educated budgetary
choices, as should be obvious precisely what has been going on with an organization wherein, they
wish to contribute. Increment unwavering quality over the budget reports.

Utilizing IFRS advances precision in setting up the budget reports of a business. For this to be
accomplished, the preparers of the IFRS budget summary must be straightforward and skillful.
IFRS advances following the code of morals by the expert bookkeeper and asking the preparer to be
objective and honest in their understanding of the money related exchanges, which will bring about less
errors or false fiscal reports. Utilizing IFRS as a guide in the budgetary detailing target of any
organization will expand the interior authority over their fiscal report revealing, and guarantee that
clients could depend more on the figures being exhibited by the organization's money related
announcing.