Full PFRS vs. PFRS For Medium Entities vs. PFRS For Small Entities

Full PFRS vs.
PFRS for Medium

Entities vs. PFRS for Small Entities
November 22, 2020
Agenda
Applicable Financial Reporting Framework
PFRS for Small Entities
PFRS for Small and Medium Entities
Full PFRS
Financial Reporting Framework
It means a set of accounting principles, standards,
interpretations and pronouncements that must be
adopted in the preparation and submission of the
annual financial statements of a particular class of
entities.
Types of Financial Reporting
Framework
General Purpose Financial Reporting Framework
refers to a framework designed to meet the common
financial information needs of a wide range of users
such as existing or prospective investors or creditors.
Full PFRS, PFRS for SMEs, PFRS for Small Entities
Special Purpose Financial Reporting Framework refers
to a framework designed to meet the financial
information needs of specific users.
Cash Basis Framework, Tax Basis Framework, Financial
Reporting provisions of Contract, Financial Reporting
Provisions of Regulator
Types of Financial Reporting
Framework
Fair Presentation Framework refers to a financial reporting
framework that requires compliance with the requirements of the
framework and: (i) Acknowledges explicitly or implicitly that, to
achieve fair presentation of the financial statements, it may be necessary
for management to provide disclosures beyond those specifically
required by the framework; or (ii) Acknowledges explicitly that it may
be necessary for management to depart from a requirement of the
framework to achieve fair presentation of the financial statements. Such
departures are expected to be necessary only in extremely rare
circumstances.
 Compliance Framework refers to a financial reporting framework
that requires compliance with the requirements of the framework, but
does not contain the acknowledgements in (i) or (ii) of Fair Presentation
Framework.
Classes of General Purpose Financial
Reporting Framework
Philippine Financial Reporting Standards (Full PFRS)
Philippine Financial Reporting Standards for Small
and Medium Entities
Philippine Financial Reporting Standards for Small
Entities
Philippine Financial Reporting Standards
Large and/or Publicly-Accountable Entities
 Those entities that have total assets of more than P350M; or
 Those entities that have total liabilities of more than
P250M; or
 Those entities that are required to file financial statements
under Part II of SRC Rule 68; or
 Those entities that are in the process of filing their financial
statements for the purpose of issuing any class of
instruments in a public market; or
 Those entities that are holder of secondary licenses issued
by regulatory agencies.
Philippine Financial Reporting Standards
for Medium Entities
Medium entities are those entities that meet all of the
following requisites:
Total assets of between P100M to P350M or Total
liabilities of between P100M to P250M;
Are not required to file financial statements under Part II
of SRC Rule 68;
Are not in the process of filing their financial statements
for the purpose of issuing any class of instruments in a
public market; and
Are not holders of secondary licenses issued by
regulatory agencies.
Medium Entities allowed to use either
Full PFRS or PFRS for Medium Entities
 A medium entity which is a subsidiary of a parent company
reporting under the PFRS
 A medium entity which is a subsidiary of a foreign parent
company which will be moving towards International
Financial Reporting Standards (“IFRS”) pursuant to the
foreign country’s published convergence plan
 A medium entity which is a subsidiary of a foreign parent
company and has been applying the standards for a non-
publicly accountable entity for local reporting purposes. It
is considering moving to PFRS instead of the PFRS for
SMEs in order to align its policies with the expected move
to full IFRS by its foreign parent company pursuant to its
country’s published convergence plan
 A medium entity, either as a significant joint venture or
associate, is part of a group that is reporting under the PFRS
 An medium entity which is a branch office or regional
operating headquarter of a foreign company reporting under
the IFRS
 An medium entity which has a subsidiary that is mandated to
report under the PFRS
 An medium entity which has a short term projection that show
that it will breach the quantitative thresholds set in the criteria
for a medium entity. The breach is expected to be significant
and continuing due to its long-term effect on the company’s
asset or liability size
A medium entity which has a concrete plan to conduct
an initial public offering within the next two (2) years
A medium entity which has been preparing financial
statements using PFRS and has decided to liquidate
Such other cases that the SEC may consider as valid
exceptions from the mandatory adoption of PFRS for
SMEs
PFRS for Small Entities
Small Entities are those that meet all of the following
requisites:
Total assets between P3M to P100M or Total liabilities
between P3M to P100M (In case of parent corporation, it
shall be based on consolidated figures.)
 Are not Are not required to file financial statements under
Part II of SRC Rule 68;
 Are not in the process of filing their financial statements for
the purpose of issuing any class of instruments in a public
market; and
 Are not holders of secondary licenses issued by regulatory
agencies.
Small Entities Allowed to use either Full PFRS or
PFRS for Medium Entities or PFRS for Small Entities
A small entity which is a subsidiary of a parent company
reporting under Full PFRS or PFRS for SMEs
A small entity which is a subsidiary of a foreign parent
company which will be moving towards Full IFRS or IFRS
for SMEs pursuant to the foreign country’s published
convergence option
A small entity, either as a significant joint venture or
associate, is part of a group that is reporting under Full PFRS
for PFRS for SMEs
A small entity which is a branch office or regional operating
headquarters of a foreign company reporting under Full IFRS
for IFRS for SMEs
Small Entities Allowed to use either Full PFRS or
PFRS for Medium Entities or PFRS for Small Entities
A small entity which has a short term projection that
show that it will breach the quantitative threshold set in
the criteria for a small entity. The breach is expected to
be significant and continuing due to its long-term effect
on the company’s asset size
A small entity which has been preparing financial
statements using Full PFRS or PFRS for SMEs and has
decided to liquidate
Such other cases that the SEC may consider as valid
exceptions from the mandatory adoption of PFRS for
Small Entities
Alternative Financial Frameworks for
Micro Entities
Income tax or Cash Basis
PFRS for Small Entities
PFRS for Medium Entities with management’s
assessment of the acceptability of such framework
Full PFRS with management’s assessment of the
acceptability of such framework
Micro Entities
Micro entities are those that meet all of the following
requisites:
Total assets and liabilities are below P3 Million;
Are not required to file financial statements under Part II
of SRC Rule 68;
Are not in the process of filing their financial statements
for the purpose of issuing any class of instruments in a
public market;
Are not holders of secondary licenses issued by
regulatory agencies.
Section 1: Scope of the Framework
PFRS for Small Entities PFRS for Medium Full PFRS
Section 1: Scope of the Entities PAS 1: Presentation of
Framework Section 1 Small and Financial Statements
Medium Enterprises
Scope of the Framework An SME is defined as an An entity applies PAS 1
This framework is intended entity that: when preparing and
for use by small entities as • Does not have public presenting general-purpose
defined by Philippine accountability and financial statements in
Securities and Exchange • Publishes general-purpose accordance with PFRS.
Commission. financial statements for
external users.
Public accountability is
further defined as an entity
that:
• Has debt or equity
instruments traded in a
public market (or it is in the
process of issuing such
instruments) or
• Holds assets in a fiduciary
capacity for a broad group of
Section 1: Scope of the Framework
Section 1: Scope of the Entities PAS 1: Presentation of
Framework Section 1 Small and Financial Statements
Medium Enterprises
Quantitative Threshold Total assets in excess of Total assets in excess of
Total assets of P3M to P100M to P350M or Total P350M or Total liabilities in
P100M or Total liabilities of liabilities in excess of excess of P250M
P3M to P100M P100M to P250M
Section 3: Concepts and Pervasive
Principles
Section 2: Concepts and Entities Framework for
Pervasive Principles Section 2: Concepts and Preparation and
Pervasive Principles Presentation of
Financial Statements
PAS 1: Presentation of
Measurement PFRS for SMEs specifies The Framework considers
Measurement requirements two common measurement different measurement bases
are generally set out in the bases, which are amortised that may be used in the
individual sections of the historical cost and fair value. determination of monetary
PFRS for Small Entities. In most cases the standard amounts of elements in the
Most of the requirements specifies which measurement financial statements.
under this framework must be used in different
requires cost-based sections.
measurement. However, in a
few circumstances fair value
measurement is required or
permitted under this
framework.
Section 3: Financial Statements
Presentation
Section 3: Financial Entities PAS 1: Presentation of
Statements Presentation Section 3: Financial Financial Statements
Statement Presentation
Third Statement of Not required A third statement of financial
Financial Position in case position at the beginning of
of retroactive adjusted in the earliest comparative
beginning Retained period when a retrospective
Earnings change in accounting policy,
Not required restatement or
reclassification occurs.
Presentation
Statements Presentation Section 4: Statement of Financial Statements
Financial Position
Current and Noncurrent The statement of financial The statement of financial
Distinction position presents current and position presents current and
An entity shall present non-current assets and non-current assets and
current and noncurrent liabilities separately unless liabilities separately unless
assets, and current and presentation in order of presentation in order of
noncurrent liabilities, as liquidity is more reliable and liquidity is more reliable and
separate classifications in its relevant. relevant. Whichever method
statement of financial is employed, disclosure must
position. be made of amounts to be
recovered/settled within 12
months and after 12 months
of the reporting period.
Presentation
Financial Position
Disclosures on Not required Disclosures on
Reclassification of Puttable reclassification of puttable
Instruments instruments are required.
Not required
Additional disclosures on In terms of the sub- No similar provision.
trade and other payable classification, this framework
In terms of the sub- requires disclosure related to
classification, this framework trade and other payables.
requires disclosure related to This must be analysed into
trade and other payables. trade suppliers, amounts due
This must be analysed into to related parties, deferred
trade suppliers, amounts due income and accruals.
to related parties, deferred
income and accruals.
Presentation
Comprehensive Income
and Income Statement
Statement of Income Statement of Comprehensive Statement of Comprehensive
Only Statement of Income is Income (or a separate income Income (or a separate income
required but not Statement of statement and statement of statement and statement of
Comprehensive Income comprehensive income) comprehensive income)
Comprehensive Income Profit or Loss Profit or Loss

Only Profit or Loss or Net Other Comprehensive Other Comprehensive
Income or Loss but no Other Income Income
Comprehensive Income Total Comprehensive Total Comprehensive
Income Income
Additional Disclosures on Not required Disclosures are required in
Taxation Effects of respect of the taxation effects
Reclassification and any reclassification
Not required. adjustments relating to
components of other
Presentation
Statements Presentation Section 3: Financial Financial Statements
Statements Presentation
Other Comprehensive Income 1. Translation gain or loss 1. Translation gain or loss
None 2. Gain or loss on hedging of net 2. Gain or loss on derivatives
investment in foreign designated as hedge of net
operation investment
3. Actuarial gain or loss 3. Gain or loss on cash flow
4. Revaluation surplus hedge
4. Gain or loss on FAFVOCI-
Debt Securities
5. Gain or loss on FAFVOCI-
Equity Securities
6. Gain or loss on FLFVPL-due
to credit risk
7. Net remeasurement gain or
loss
8. Revaluation surplus
Actuarial gain or loss Actuarial gain or loss (OCI or PL) OCI without RA only
None
Gain or loss on hedging of net Gain or loss on hedging of net Gain or loss on hedging of net
investment in foreign operation investment in foreign operation investment in foreign operation
None (OCI without RA) (OCI with RA to PL)
Presentation
Changes in Equity and
Statement of Income
and Retained Earnings
Statement of Income and If the only changes to equity Not allowed.
Retained Earnings during the periods for which
If the only changes to equity financial statements are
during the periods for which presented arise from profit or
financial statements are loss, payment of dividends,
presented arise from profit or corrections of prior period
loss, payment of dividends, errors and changes in
corrections of prior period accounting policy, the entity
errors and changes in may present a single statement
accounting policy, the entity of income and retained
may present a single statement earnings in place of the
of income and retained statement of comprehensive
earnings in place of the income income and statement of
statement and statement of changes in equity. If there are
changes in equity no items of other
comprehensive income in all
Presentation
Cash Flows
Cash flows from investing and Major classes of gross cash Major classes of gross cash
financing activities receipts and cash payments receipts and cash payments
Major classes of gross cash must be disclosed. must be disclosed, other than
receipts and cash payments The aggregate cash flows on when a net basis of
must be disclosed. the acquisition or disposal of presentation is permitted.
a business must be disclosed The standard provides the
separately. situations where a net basis
of presentation would be
acceptable.
The aggregate cash flows on
the acquisition or disposal of
a business must be disclosed
separately.
Presentation
Cash Flows
Components of Cash and An entity is required to An entity is required to
Cash Equivalents disclose the components of disclose the components of
An entity is required to cash and cash equivalents cash and cash equivalents
disclose the components of and reconcile the amounts in and reconcile the amounts in
cash and cash equivalents the cash flow to the the cash flow to the
and reconcile the amounts in equivalent items in the equivalent items in the
the cash flow to the statement of financial statement of financial
equivalent items in the position. No reconciliation is position.
statement of financial required if cash and cash
position. No reconciliation is equivalents are presented as
required if cash and cash a single similarly described
equivalents are presented as item in the statement of
a single similarly described financial position.
item in the statement of
financial position.
Section 4: Subsidiaries
Section 4: Subsidiaries Entities PAS 27: Separate
Section 9: Consolidated Financial Statements
and Separate Financial PFRS 10: Consolidated
Statements Financial Statements
Accounting Policy Election: A parent entity must present A parent must present
An entity should make an consolidated financial consolidated financial
accounting policy choice to: statements in which it statements in which it
1.Consolidate its subsidiaries consolidates its investments consolidates its investments
or in subsidiaries in accordance in subsidiaries in accordance
2.Account for its subsidiaries with this IFRS. with this standard.
using equity method
Combined Financial It includes guidance on Combined financial

Statements separate financial statements statements are not addressed
No similar provision. and combined financial in Full PFRS.
statements. Combined
financial statements may
include entities outside the
group or be created from
selected entities within the
Control Definition Control is the power to An investor controls an
Control is the power to govern the financial and investee when it is exposed,
govern the financial and operating policies of an or has rights, to variable
operating policies of an entity so as to obtain benefits returns from its involvement
entity so as to obtain benefits from its activities. with the investee and has the
from its activities. ability to affect those returns
through its power over the
investee.
Exemption from Preparing A parent need not present An investment entity shall
Consolidated Financial consolidated financial not consolidate its
Statements statements if: It has no subsidiaries or apply PFRS 3
No exemption regarding subsidiaries other than one when it obtains control of
Investment Entity that was acquired with the another entity. Instead, an
intention of selling or investment entity shall
disposing of it within one measure an investment in a
year. A parent accounts for subsidiary at fair value
such a subsidiary: • At fair through profit or loss in
value with changes in fair accordance with PFRS 9.
value recognised in profit or
loss, if the fair value of the
shares can be measured
reliably or • Otherwise at
cost less impairment.
Accounting Methods for 1. Cost less Impairment 1. Cost Method
Investment in Subsidiary in Method 2. Fair value through profit
Separate Financial 2. Fair value through profit or loss Method
Statements using or loss Method 3. Fair value through Other
1.Cost less Impairment Method Comprehensive Income
2.Equity Method Method
4. Equity Method
Comparison of Types of Investment
in Equity Securities
Financial Asset at Financial Asset at Investment on
Fair Value Fair Value unquoted
through Profit or through Other securities or
Loss Comprehensive Investment at
Income cost
Applicable PFRS 9 PFRS 9 PAS 28
Standards
Criteria •Quoted shares •Quoted shares •Unquoted shares
•Less than 20% of •Less than 20% of •Less than 20% of
outstanding outstanding outstanding
ordinary shares ordinary shares ordinary shares
•1-100% of •1-100% of •1-100% of
preference shares preference shares preference shares
•Held for trading •Irrevocably
•All other designated at
investment in FAFVOCI
quoted equity
securities
Income cost
Applicable PFRS 9 PFRS 9 PAS 28
Standards
Method Fair value method Fair value method Cost method
Classification Current Asset Noncurrent Asset Noncurrent Asset
Initial Fair value Fair value plus Acquisition price
Measurement transaction cost plus transaction
cost
Transaction cost Expense Capitalizable Capitalizable
Subsequent Fair Value Fair Value Cost
measurement
Dividend income Yes in Profit or Yes in Profit or Yes in Profit or
Loss Loss Loss
Income cost
Unrealized holding Yes in Profit or Yes in Other None
gain or loss on Loss Comprehensive
changes in fair Income without
value Reclassification
Adjustment
Gain on Bargain None None None
Purchase
Share in net None None None
income of investee
Impairment loss None None None
Investment in Investment in Investment in Subsidiary
Associate Joint Venture
Applicable PAS 28 PFRS 11 in PFRS 3 and PAS 27
Standards relation to PFRS 10 Separate
PAS 28 Consolidated Financial
Statements
Criteria •Significant •Joint Control •Control
influence •More than
•20-50% of 50% of
Ordinary Ordinary
Shares Shares
PAS 28 ConsoFS Financial
Statements
Method Equity method Equity Acquisition •FAFVPL
Method Method •FAFVOCI
•Equity
Method
•Cost Method
Classification Noncurrent Noncurrent None Noncurrent
Asset Asset Asset
Initial Acquisition Acquisition Not It depends
Measurement price plus price plus Applicable
transaction transaction
cost cost
Transaction Capitalizable Capitalizable Expense It depends
Statements
Subsequent Book Value Book Value None It depends
measurement under Equity under Equity
Method – Method –
Impairment Impairment
Dividend None None None It depends
Income
Unrealized None None None It depends
holding gain
or loss on
changes in fair
value
Statements
Gain on Yes in Profit Generally Yes in Profit It depends
bargain or Loss None or Loss
purchase
Share in net Yes in Profit Yes in Profit Yes in Profit It depends
income of or Loss or Loss or Loss
investee
Impairment Yes if Yes if BV>RA None It depends
Loss of BV>RA
Investment
Section 5: Accounting Policies, Estimates
and Errors
Section 5: Accounting Entities PAS 8: Accounting
Policies, Estimates and Section 10: Accounting Policies, Changes in
Errors Policies, Estimates and Accounting Estimates
Errors and Errors
Selection of Accounting Policies Where transactions, events and Where transactions, events and
Where transactions, events and conditions are specifically dealt conditions are specifically dealt
conditions are specifically dealt with, the standard must be applied. with in IFRS, the relevant standard
with, the standard must be applied. In the absence of a section that must be applied. In the absence of a
In the absence of a section that applies, judgment is used to develop section that applies, judgment is
applies, judgment is used to develop a policy that is relevant and reliable. used to develop a policy that is
a policy that is relevant and reliable. In making this judgment, reference relevant and reliable. In making this
In making this judgment, reference is made to: • Sections of IFRS for judgment, reference is made to: •
is made to: • Sections of IFRS for SMEs that deal with similar or IFRSs that deal with similar or
SMEs that deal with similar or related issues • The definitions, related issues • The definitions,
related issues • The definitions, recognition and measurement recognition and measurement
recognition and measurement concepts in section 1. Management concepts in the Framework.
concepts in section 1. Management may consider full IFRS that deal Management may also consider
may consider full IFRS that deal with similar or related issues. recent pronouncements of other
with similar or related issues. Accounting policies must be applied standard setters (accounting
Accounting policies must be applied consistently for similar transactions, literature or industry practice) that
consistently for similar transactions, events or conditions, unless a use a similar conceptual framework.
events or conditions, unless a section specifies otherwise. Accounting policies must be applied
section specifies otherwise. consistently for similar transactions,
Section 6: Basic Financial Instruments
Section 6: Basic Entities PFRS 9: Financial
Financial Instruments Section 11: Basic Instruments
Section 7: Other Financial Instruments
Financial Instruments Section 12: Other
Financial Instruments
Selection of Accounting An entity makes a policy An entity will comply with the
Policies choice to either: • Comply with provisions of PAS 32 Financial
The entity shall apply the Section 11 Basic Financial Instruments: Presentation and
provisions of Section 6 and Instruments and Section 12 PFRS 9: Financial Instruments:
Section 7. Other Financial Instruments Recognition and Measurement
Issues of PFRS for SMEs or • and make disclosures in terms
Use the recognition and of PFRS 7 Financial
measurement provisions of Instruments: Disclosures.
PAS 39 Financial Instruments:
Recognition and Measurement
and apply the disclosure
requirements of PFRS for
SMEs.
Disclosures The onerous disclosures of The onerous disclosures of
The onerous disclosures of PFRS 7 are not required. PFRS 7 are required.
Embedded Derivative There is no concept of An embedded derivative is
There is no concept of embedded derivatives under separated from the host
embedded derivatives under PFRS for SMEs. No contract and accounted for as a
PFRS for Small Entities. No bifurcation is permitted in derivative under IAS 39 if:
bifurcation is permitted in PFRS for SMEs. Such hybrid a)The economic characteristics
PFRS for Small Entities. instruments would be carried and risks of the embedded
derivative are not closely
Such hybrid instruments at fair value.
related to those of the host
would be carried at fair
b)b) A separate instrument
value. with the same terms would
meet the definition of a
derivative and
c)c) The hybrid is not
measured at fair value through
profit or loss.
Section 5: Accounting Policies, Estimates
and Errors
Classification The following are basic financial PFRS 9 requires that financial
The following are basic instruments for the purposes of instruments be classified into
Section 11:
financial instruments for the the following groups. Financial
• Cash
purposes of Section 6: • A debt instrument that satisfies
assets are grouped as:
• Cash specific criteria • Fair value through profit and
• A debt instrument that • A commitment to receive a loan loss
satisfies specific criteria that • Fair value through OCI
• An investment in non- • Cannot be settled net in cash and • • and Financial Asset at
convertible preference shares When the commitment is executed, Amortized Cost.
is expected to meet the conditions
and non-puttable ordinary Financial liabilities are
of a debt instrument above
shares or preference shares. • An investment in non-convertible grouped as:
Other financial instruments preference shares and non-puttable • Fair value through profit and
would include all other ordinary shares or preference loss
financial instruments that are shares. Other financial instruments • Financial liabilities at
within the scope of Section 7 would include all other financial amortized cost.
instruments that are within the
but not within the scope of
Initial Measurement of Transaction price plus FAFVPL – Fair Value
Debt Securities transaction cost for FAFVOCI – Fair Value
Transaction price plus Financial Asset or plus Transaction Cost
transaction cost for Transaction price minus FAAC-Fair Value plus
Financial Asset or transaction cost for Transaction Cost
Transaction price minus Financial Liability FLFVPL – Fair Value
transaction cost for FLAC – Fair Value
Financial Liability Minus Transaction Cost
Subsequent Measurement of For basic financial instruments, FAFVPL – Fair Value
Debt Securities and Equity at the end of each reporting
Securities period: (P/L)
• Debt instruments are measured at • Debt instruments are FAFVOCI – Fair
amortised cost using the effective measured at amortised cost
interest rate Value (OCI with RA)
using the effective interest rate
• Investments in non-convertible
• Commitments to receive a or (OCI without RA)
preference shares and non-puttable
ordinary, and preference shares that loan are measured at cost less FAAC – Amortized
are not publically traded or their fair impairment Cost
value cannot otherwise be reliably • Investments in non-
measured, are measured at cost less convertible preference shares FLFVPL – Fair Value
impairment. and non-puttable ordinary, and (P/L) or (OCI without
• Investments in non-convertible
preference shares that are RA)
preference shares and non-puttable
publically traded or their fair
ordinary, and preference shares that
are publically traded or their fair value can otherwise be reliably FLAC – Amortized
value can otherwise be reliably measured, are measured at fair Cost
measured, are measured at lower of value through profit and loss if
cost or fair value with the difference a public market exists,
in Debt Instruments or Bonds
Financial Asset at Financial Asset at Financial Asset at
Fair Value Fair Value Amortized Cost
through through Other
Profit/Loss Comprehensive
Income
Criteria for To obtain gain or To collect To hold the debt
Classification loss on changes on contractual cash instrument to
(Business Model fair value of flow from collect contractual
of Investor) investment or principal and cash flows from
short-term profit interest and to sell principal and
through selling the financial asset interest on a
(Residual) specified date
Classification Current Asset Noncurrent Asset Noncurrent Asset
or Current Asset
Initial Fair Value Fair Value plus Fair Value plus
Measurement Transaction Cost Transaction Cost
Subsequent Fair Value Fair Value Amortized Cost
Measurement
Income
Transaction Cost Expense Capitalizable Capitalizable
Unrealized Yes as part of Yes as part of None
Holding Gain or Profit/Loss Other
Loss on Changes Comprehensive
in Fair Value Income with
Reclassification
Adjustment to
Profit/Loss if
realized
Interest Income Nominal Interest Effective Interest Effective Interest
(Face Value x (Amortized Cost x (Book Value x
Nominal Rate) Effective Interest Effective Interest
Rate) Rate)
Income
Interpolation of No Yes Yes
Effective Interest
Rate
Amortization of No Yes Yes
Discount or
Premium of Bonds
Comparison of Types of Financial
Liability
Financial Liability at Financial liability at
Fair Value through Amortized Cost
Profit or Loss
Criteria for Classification Irrevocably designated at Residual classification
fair value through profit
or loss
Classification Current Liability Noncurrent Liability or
Current Liability
Initial Measurement Fair value Fair value – transaction
cost
Subsequent Measurement Fair value Amortized cost
Transaction cost Expense as incurred Amortize as part of
financial liability
Comparison of Types of Financial
Liability
Financial Liability at Financial liability at
Fair Value through Amortized Cost
Profit or Loss
Unrealized holding gain Yes in Profit or Loss if None
or loss on changes in fair not due to credit risk or in
value Other Comprehensive
Income without
Reclassification
Adjustment if due to
credit risk
Interest expense Nominal Interest (Face Effective Interest (Book
Value x Stated Rate) value x Effective Interest
Rate)
Interpolation of Effective No Yes
Interest Rate
Amortization of Discount No Yes
or Premium on Financial
Liability
Section 7: Other Entities PFRS 9: Financial
Financial Instruments Section 12: Other Instruments
Hedge risks PFRS for SMEs only permits PFRS 9 permits the following
PFRS for Small Entities only hedge accounting when the hedge relationships:
permits hedge accounting hedged risk is one of the • Fair value hedge: a hedge of the
when the hedged risk is one of following risks: exposure to changes in fair value
the following risks: • Interest rate risk of a debt of a recognised asset or liability
• Interest rate risk of a debt instrument measured at or an unrecognised firm
commitment, which is
instrument measured at amortised cost
attributable to a particular risk
amortised cost • Foreign exchange or interest and could affect profit or loss
• Foreign exchange or interest rate risk in a firm commitment • Cash flow hedge: a hedge of
rate risk in a firm commitment or a highly probable forecast the exposure to variability in
or a highly probable forecast transaction cash flows that: (1) Is
transaction • Price risk of a commodity attributable to a particular risk
• Price risk of a commodity that it holds or in a firm associated with a recognised
that it holds or in a firm commitment or highly asset or liability or a highly
commitment or highly probable forecast transaction to probable forecast transaction and
probable forecast transaction to purchase or sell a commodity (2)Could affect profit or loss
purchase or sell a commodity • Foreign exchange risk in a • Hedge of a net investment in a
net investment in a foreign foreign operation as defined in
Hedge of Net Investment Yes with gain or loss of Yes with gain or loss of
in Foreign Operation derivatives to be derivates to be recognized
None recognized in OCI in OCI with RA to PL if
without RA if realized. realized
Cash Flow Hedge None Yes with gain or loss of
None derivates to be recognized
in OCI with RA to PL if
realized
Initial Measurement of Transaction Price FAFVPL – Fair Value
Investment in Stocks or FAFVOCI – Fair Value
Equity Securities plus Transaction Cost
Transaction Price
Subsequent Fair Value (PL Only) FAFVPL – Fair Value
Measurement of (PL)
Investment in Stocks or FAFVOCI – Fair Value
Equity Securities (OCI without RA to PL)
Fair Value (PL Only)
Section 8: Inventories
Section 8: Inventories Entities PAS 2: Inventories
Section 13: Inventories
Subsequent Lower of Cost or Lower of Cost or Net
Measurement Estimated Selling Price Realizable Value
Lower of Cost or Market less Cost to Complete and
(LCM) Cost to Sell
Loss on Inventory Impairment loss Part of Cost of Sales
Writedown:
Impairment loss
Section 9: Investments in Associate
Section 9: Investments Entities PAS 28: Investments in
in Associate Section 14: Investments Associate
in Associates
Accounting Models for 1. Cost Model Equity Method only
Investment in Associate (Unquoted); or under PAS 28
1.Cost Less Impairment 2. Fair Value Model
Model; or (Quoted); or
2.Equity Method 3. Equity Method
(Unquoted or Quoted)
Section 10: Joint Arrangements
Section 10: Joint Entities PFRS 11: Joint
Arrangements Section 15: Investment Arrangements
in Joint Ventures
Joint Operations Jointly Controlled Joint Operations
Operations
Jointly Controlled Assets
Accounting Models for 1. Cost Model Equity Method only
Investment in Joint (Unquoted); or under PAS 28
Venture 2. Fair Value Model
1.Cost Model; or (Quoted); or
2.Equity Method 3. Equity Method
(Unquoted or Quoted)
Section 11: Investment Property
Section 11: Investment Entities PAS 40: Investment
Property Section 16: Investment Property
Property
Accounting Models 1. Cost Model 1. Cost Model
1.Cost Model 2. Fair Value Model 2. Fair Value Model
2.Fair Value Model
Investment Property may Subsequent Measurement: Investment Property may be
be carried at either Cost Investment property whose carried at either Cost Model
Model or Fair Value fair value can be measured or or Fair Value Model.
reliably without undue cost
Model.
or effort must be measured at
fair value at each reporting
date with changes in fair
value recognised in profit or
loss. If a property interest
held under a lease is
classified as investment
property, the item accounted
for at fair value is that
Section 12: Property, Plant and
Equipment
Section 12: Property, Entities PAS 16: Property, Plant
Plant and Equipment Section 17: Property, and Equipment
Plant and Equipment
1.Cost Model 2. Revaluation Model 2. Revaluation Model
2.Fair Value Model
Revaluation Surplus in Yes under Revaluation Yes under Revaluation
OCI Model Model
None
Accounting Treatment of Investment
Property/PPE
Cost Model Fair Value Model Revaluation
Model
Classification Noncurrent Asset Noncurrent Asset Noncurrent Asset
Recognition It is probable that It is probable that It is probable that
Principle the future economic the future economic the future economic
benefits that are benefits that are benefits that are
associated with the associated with the associated with the
investment property investment property investment property
will flow to the will flow to the will flow to the
entity and its cost entity and its cost entity and its cost
can be measured can be measured can be measured
reliably. reliably. reliably.
Initial Measurement Historical Cost Historical Cost Historical Cost
Subsequent Cost – Fair Value Fair Value or Sound
Measurement Accumulated Value or
Depreciation – Depreciated
Accumulated Replacement Cost
Impairment less subsequent
depreciation less
Accounting Treatment of Investment
Property/PPE
Cost Model Fair Value Model Revaluation
Model
Depreciation Yes None Yes
Impairment Loss Yes if the Book None Yes if the Book
Value > Value >
Recoverable Recoverable
Amount Amount
Gain or Loss on None Yes None
Changes in Fair
Value
Revaluation None None Yes if Revalued
Surplus Amount > Book
Value to be
presented in OCI
without RA
Section 13: Intangible Assets other than
Goodwill
Section 13: Intangible Entities PAS 38: Intangible
Assets Section 18: Intangible Assets
Assets other than
Goodwill
1.Cost Model 2. Revaluation Model 2. Revaluation Model
Revaluation Surplus in Yes under Revaluation Yes under Revaluation
OCI Model Model
None
Section 13: Intangible Assets other than
Goodwill
Section 13: Intangible Entities PAS 38: Intangible
Assets Section 18: Intangible Assets
Assets other than
Goodwill
Development Cost Expense as incurred It may be capitalized as
Expense as incurred intangible asset if the
criteria for capitalization
are met.
Measurement of Fair value at grant date Fair value at grant date or
Intangible assets nominal amount
acquired from
Government Grant
No provision
Amortization of Over a presumed life not No amortization but
Intangible Assets with exceeding 10 years subject to annual
Indefinite Life impairment test
Over a presumed life not
Section 14: Business Combination and
Goodwill
Section 14: Business Entities PFRS 3: Business
Combination and Section 19: Business Combination
Goodwill Combination and
Goodwill
Definition of Business A business combination A business combination is
Combination is the bringing together of transaction or other event
A business combination is separate entities or in which an acquirer
the bringing together of businesses into one obtains control of one or
separate entities or reporting entity. more businesses. The
businesses into one definition also includes
reporting entity. transactions sometimes
referred to as ‘true
mergers’ or ‘mergers of
equals’.
Goodwill
Goodwill
Accounting Method Purchase Method using Acquisition Method using
Purchase Method using cost based approach Fair Value Approach
cost based approach whereby the cost of the
whereby the cost of the acquired entity is
acquired entity is allocated to the assets
allocated to the assets acquired and liabilities
acquired and liabilities (and provisions for
(and provisions for contingent liabilities)
contingent liabilities) assumed.
assumed.
Goodwill
Goodwill
Direct Cost of Business Part of Consideration Given Expense as incurred
Combination Up
Part of Consideration Given
Up
Contingent Consideration When a business Presented in Profit or Loss or
When a business combination agreement Other Comprehensive
combination agreement provides for an adjustment to Income but not retroactively
provides for an adjustment to the cost of the business adjusted to Goodwill or Gain
the cost of the business combination contingent on on Bargain Purchase
combination contingent on future events, the acquirer
future events, the acquirer includes the estimated
includes the estimated amount of the adjustment in
amount of the adjustment in the cost of the combination at
the cost of the combination at the acquisition date if the
the acquisition date if the adjustment is probable and
Goodwill
Goodwill
Recognition of Assets and The following criteria must be To qualify for
Liabilities satisfied for the acquirer to
The following criteria must be recognise the acquiree’s recognition, an item
satisfied for the acquirer to
recognise the acquiree’s identifiable
identifiable assets and liabilities acquired or assumed
and any provisions for
assets and liabilities and any contingent liabilities at the must be:
provisions for contingent liabilities
at the acquisition date:
acquisition date: • An asset or liability at
• Assets other than an intangible
• Assets other than an intangible
asset — the future economic
the acquisition date
asset — the future economic
benefits must be probable and the benefits must be probable and (i.e., meet the
fair value can be measured reliably the fair value can be measured definitions in the
• Liability other than a provision for reliably
contingent liability — the outflow • Liability other than a provision Framework)
of resources must be probable and for contingent liability — the • Part of the business
the fair value can be measured outflow of resources must be
reliably probable and the fair value can acquired (the acquiree)
• Intangible asset or provision for be measured reliably rather than the result of
contingent liability — the fair value • Intangible asset or provision
Goodwill
Goodwill
Provisional Accounting Retrospective adjustments to Retrospective adjustments to
Retrospective adjustments to provisional amounts provisional amounts
provisional amounts recognised in initial recognised in initial accounting
recognised in initial accounting for a business for a business combination
accounting for a business combination may be made up may be made during the
combination may be made up to 12 months after the measurement period, which is
a period up to a maximum of
to 12 months after the acquisition date. This time
12 months after the acquisition
acquisition date. This time limit does not apply to
date, where new information is
limit does not apply to adjustments to the cost of the obtained regarding facts and
adjustments to the cost of the combination contingent on circumstances that existed at
combination contingent on future events which becomes acquisition date. The
future events which becomes probable and can be reliably measurement period ends as
probable and can be reliably measured subsequent to soon as the acquirer receives
measured subsequent to acquisition date. the information it was seeking
acquisition date. or learns that further
information is not available.
Goodwill
Goodwill
NCI Measurement Where the acquirer obtains less IFRS requires any NCI in an
Where the acquirer obtains less than a 100% interest in the acquiree to be recognised, but
than a 100% interest in the acquiree, a non-controlling provides a choice of two
acquiree, a non-controlling interest (NCI) in the acquiree is methods for measuring NCI
interest (NCI) in the acquiree is recognised at the NCI’s arising in a business
recognised at the NCI’s proportion of the net combination: • Option 1, to
proportion of the net identifiable assets, liabilities measure the non-controlling
identifiable assets, liabilities and provisions for contingent interest at its acquisition-date
and provisions for contingent liabilities of the acquiree at fair value • Option 2, to
liabilities of the acquiree at their attributed fair values at measure the non-controlling
their attributed fair values at the date of acquisition; no interest at the proportionate
the date of acquisition; no amount is included for any share of the value of net
amount is included for any goodwill relating to the NCI. identifiable assets acquired.
goodwill relating to the NCI. The choice of method is made
for each business combination
on a transaction-by-transaction
basis, rather than being a
Goodwill
Goodwill
Initial Measurement of Goodwill is initially The measurement of goodwill at
the acquisition date is computed
Goodwill measured at cost, being as the excess of (a) over (b)
Goodwill is initially the excess of the cost of below: a) The aggregate of: • The
measured at cost, being the business combination consideration transferred
the excess of the cost of over the acquirer’s (generally measured at
acquisition-date fair value) • The
the business combination interest in the net fair amount of any non-controlling
over the acquirer’s value of the identifiable interest in the acquiree • The
interest in the net fair assets, liabilities and acquisition-date fair value of the
acquirer’s previously held equity
value of the identifiable contingent liabilities interest in the acquiree b) The net
assets, liabilities and recognised. (Cost-Based of the acquisition-date fair values
contingent liabilities Approach) (or other amounts recognised in
recognised. (Cost-Based accordance with the requirements
of the standard) of the
Approach) identifiable assets acquired and
the liabilities assumed. (Fair
Goodwill
Goodwill
Subsequent Measurement of After initial recognition, Goodwill acquired in a business
Goodwill goodwill is measured at cost less combination is not amortised.
After initial recognition, accumulated amortisation and The acquirer measures goodwill
goodwill is measured at cost less accumulated impairment losses. acquired in a business
accumulated amortisation and Goodwill is amortised in combination at the amount
accumulated impairment losses. accordance with the principles of recognised at the acquisition date
Goodwill is amortised in amortisation of intangible assets less any accumulated impairment
accordance with the principles of in Section 18. If a reliable losses. Detailed requirements in
amortisation of intangible assets estimate of the useful life of relation to the subsequent
in Section 18. If a reliable goodwill cannot be made the life accounting for goodwill are dealt
estimate of the useful life of is presumed to be 10 years. with in IAS 36 Impairment of
goodwill cannot be made the life Detailed requirements in relation Assets. This includes the
is presumed to be 10 years. to impairment testing of requirement that the acquirer has
Detailed requirements in relation goodwill are contained in Section to test it for impairment annually,
to impairment testing of goodwill 27. This includes the requirement or more frequently if events or
are contained in Section 21. This that the acquirer test it for changes in circumstances
includes the requirement that the impairment where there is an indicate that it might be
acquirer test it for impairment indication that it may be impaired.
Section 15: Leases
Section 15: Leases Entities PFRS 16: Leases
Section 20: Leases
Lessee: Operating Lease Lessee: Operating Lease Lessee: Generally
only or Finance Lease Finance lease except
when the exceptional
case when operating lease
is applicable
Lessor: Operating Lease Lessor: Operating Lease Lessor: Operating Lease
only or Finance Lease or Finance Lease
Sales and Leaseback With applicable provision With applicable provision
No provision
Section 16: Provisions and Contingencies
Section 16: Provisions Entities PAS 37: Provisions,
and Contingencies Section 22: Provisions Contingent Liabilities
and Contingencies and Contingent Assets
Recognition An entity recognises a An entity recognises a
An entity recognises a provision only when it has provision only when it has
provision only when it has an obligation at the a present obligation (legal
an obligation at the reporting date as a result of or constructive) as a result
reporting date as a result of a past event; it is probable of a past event; it is
a past event; it is probable (i.e., more likely than not) probable that an outflow of
(i.e., more likely than not) that the entity will be resources embodying
that the entity will be required to transfer economic benefits will be
required to transfer economic benefits in required to settle the
economic benefits in settlement and the amount obligation and a reliable
settlement and the amount of the obligation can be estimate can be made of the
of the obligation can be estimated reliably. amount of the obligation
estimated reliably.
Derecognition: A provision is A provision is
No similar provision derecognised when all derecognised when no
Section 17: Equity
PFRS for Small Entities PFRS for Medium Entities Full PFRS
Section 17: Equity Section 22: Liabilities and PAS 32: Financial
Equities Instruments
Definition of Equity Equity is the residual IAS 32 provides the
Equity is the residual interest interest in the assets of an principle that the issuer of
in the assets of an entity after
deducting all its liabilities. A
entity after deducting all a financial instrument
liability is a present obligation its liabilities. A liability is classifies the instrument,
of the entity arising from past a present obligation of the or its component parts, on
events, the settlement of which entity arising from past initial recognition as a
is expected to result in an events, the settlement of financial liability, a
outflow from the entity of cash
or other resources. Equity which is expected to financial asset or an
includes investments by the result in an outflow from equity instrument in
owners of the entity, plus the entity of resources accordance with the
additions to those investments embodying economic substance of the
earned through profitable benefits/ contractual arrangement
operations and retained for use
in the entity’s operations, and the definitions.
minus reductions to owner’s
investments as a result of
unprofitable operations and
distribution to owners.
Section 17: Equity
Section 17: Equity Section 22: Liabilities and PAS 32: Financial Instruments
Equities
Definition of Equity Some financial instruments that Some financial instruments that
Member’s share in co- meet the definition of a liability are meet the definition of a liability are
classified as equity because they classified as equity because they
operative entities and represent the residual interest in the represent the residual interest in the
similar entities are equity net assets of the entity: a) A puttable net assets of the entity: a) A puttable
instrument that gives holder right to instrument that gives holder right to
if: 1) co-operative entity sell back to issuer or is sell back to issuer or is
has an unconditional right automatically repurchased by issuer automatically repurchased by issuer
tor refuse redemption of on occurrence of uncertain future on occurrence of uncertain future
event, death or retirement b) event, death or retirement b)
the member’s shares; or Instruments subordinated to all Instruments subordinated to all
(2) redemption is other classes classified as equity if other classes classified as equity if
unconditionally obligation to deliver share of net obligation to deliver share of net
assets only on liquidation c) assets only on liquidation. IFRIC 2
prohibited by local law, Members’ shares in co-operative deals with members’ shares in co-
regulation or the entity’s entities (and similar) are equity if operative entities (and similar) and
the entity has an unconditional right concludes that these are equity
governing charter. to refuse redemption, or redemption instruments if it meets the
is unconditionally prohibited by requirements of puttable financial
local law, regulation or the entity’s instruments; or if the entity has an
governing charter. unconditional right to refuse
redemption, or redemption is
unconditionally prohibited by local
Section 18: Revenue
Section 18: Revenue Entities Section 23: PFRS 15: Revenue from
Revenue Contracts with
Customers
Recognition: It must be probable that An entity shall recognize
It must be probable that the economic benefits revenue when or as the
the economic benefits associated with the entity satisfies
associated with the transaction will flow to performance obligation
transaction will flow to the entity and that the either: (1) satisfaction
the entity and that the revenue and costs can be over a period of time or
revenue and costs can be measured reliably. (2) satisfaction at a
measured reliably. Additional recognition specific moment of time
criteria apply to the
different categories as
presented below.
Section 19: Borrowing Costs
Section 19: Borrowing Entities Section 25: PAS 23: Borrowing
Costs Borrowing Costs Costs
Recognition All borrowing costs are Borrowing costs that are

All borrowing costs are expensed in profit or loss directly attributable to the
expensed in profit or loss in the period in which acquisition, construction
in the period in which they are incurred. or production of a
they are incurred. qualifying asset as part of
the cost of that asset are
capitalised. All other
borrowing costs are
expensed.
Section 20: Share-Based Payment
Section 20: Share-Based Entities Section 26: PFRS 2: Share-Based
Payment Share-Based Payment Compensation.
Measurement For equity-settled share- For equity-settled share-

For equity settled share- based payment based payment
based payment transactions, the entity transactions, the entity
transactions, an entity shall measures the goods or measures the goods or
measure the goods or services received and the services received and the
services received, and the corresponding increase in corresponding increase in
corresponding equity, with equity at the fair value of equity at the fair value of
reference to the net asset the goods or services the goods or services
value of the equity received. If this fair value received. If the entity
instruments granted. Net cannot be estimated cannot estimate reliably the
asset value is derived by reliably (includes employee fair value of the goods or
dividing the total assets of transactions), the entity services received, the entity
the entity less any measures the transaction by measures the transaction by
liabilities, by the number of reference to the fair value reference to the fair value
shares outstanding at of the equity instruments of the equity instruments
measurement date. granted. granted.
Measurement The fair value of equity The fair value of equity

For transactions with instruments issued in instruments issued in
employees (including others transactions with employees is transactions with employees is
providing similar services), the measured at grant date. The measured at grant date. The
net asset value of the equity standard differentiates between standard differentiates between
instruments shall be measured a market vesting condition and a market vesting condition and
at grant date. For transactions a non-market vesting condition a non-market vesting condition
with parties other than for the purposes of for the purposes of
employees, the measurement measurement. Non-market measurement. Non-market
date is the date when the entity vesting conditions are not vesting conditions are not
obtains the goods or the taken into account to determine taken into account to determine
counterparty renders services. the fair value of the award. the fair value of the award.
These conditions are used to These conditions are used to
determine the number of shares determine the number of shares
that are expected to vest. that are expected to vest.
Market vesting conditions are Market vesting conditions are
used to determine the value of used to determine the value of
the award at grant date the award at grant date.
Intrinsic value option on Not allowed. Allowed if the fair value

Equity-Settled Shared of stock options at grant
Based Compensation date is not available.
Not Allowed.
Section 21: Impairment of Assets
Section 21: Impairment Entities Section 27: PAS 36: Impairment of
of Assets Impairment of Assets Assets
Immediate recognition of An impairment loss must An impairment loss must

impairment loss in PL be recognised be recognised
An entity must recognise immediately in profit or immediately in profit or
an impairment loss loss, unless the asset is loss, unless the asset is
immediately in profit or carried at revalued carried at revalued
loss since revaluation amount in accordance amount in accordance
model is prohibited. with another standard. with another standard.
Any impairment loss of a Any impairment loss of a
revalued asset must be revalued asset must be
treated as a revaluation treated as a revaluation
decrease in accordance decrease in accordance
with that other standard. with that other standard.
Section 22: Impairment of Assets
Section 22: Impairment Entities Section 27: PAS 36: Impairment of
of Assets Impairment of Assets Assets
Indicators of Impairment An entity must assess at each An entity must assess at the end of
each reporting period whether there
An entity must assess at each reporting date whether there
is any indication that an asset may
reporting date whether there is any indication that an asset be impaired. If any such indication
is any indication that an asset may be impaired. If any such exists, the entity must estimate the
may be impaired. If any such indication exists, the entity recoverable amount of the asset.
indication exists, the entity must estimate the Irrespective of whether there is any
indication of impairment, an entity
must estimate the recoverable amount of the must also: a) Test an intangible
recoverable amount of the asset. If there is no indication asset with an indefinite useful life or
asset. If there is no indication of impairment, it is not an intangible asset not yet available
of impairment, it is not necessary to estimate the for use for impairment annually by
comparing its carrying amount with
necessary to estimate the recoverable amount. In
its recoverable amount b) Test
recoverable amount. In assessing whether there is goodwill acquired in a business
assessing whether there is any indication that an asset combination for impairment
any indication that an asset may be impaired, an entity annually. In assessing whether there
may be impaired, an entity must consider, as a is any indication that an asset may
be impaired, an entity must
must consider, as a minimum, external and consider, as a minimum, external
minimum, external and internal sources of and internal sources of information.
Section 22: Employee Benefits
Section 22: Employee Entities Section 28: PAS 19R: Employee
Benefits Employee Benefits Benefits as Amended
Post-Employment Actuarial gain or loss Actuarial gain or loss

Benefits Plan (Defined a.k.a. net remeasurement a.k.a. net remeasurement
Benefit Plan) gain or loss may be gain or loss must be
Apply Accrual Approach presented in either Profit presented in OCI
Only with difference of or Loss or OCI while without RA only while
FVPA and PBO presented employee benefit expense employee benefit expense
as PBC or ABC and is recognized in PL. is recognized in PL.
employee benefit expense
recognized in PL only.
No actuarial gain or loss
or net remeasurement
gain or loss in OCI.
Section 23: Income Tax
Section 23: Income Tax Entities Section 29: PAS 12: Income Tax
Income Tax
Accounting Policies Mandatory Deferred Tax Mandatory Deferred Tax

1.Tax Payable Method; or Method Method
2.Deferred Income Taxes
Method
Section 23: Taxes Payable Method
Under the taxes payable method, an entity shall recognize a
current tax liability for tax payable on taxable profit for the
current and past periods. If the amount paid for the current and
past periods exceeds the amount payable for those periods, the
entity shall recognize the excess as a current tax asset.
An entity shall measure its current tax liabilities (assets) using
the tax rates and laws that have been enacted or substantively
enacted by the reporting date. An entity shall regard tax rates
as substantively enacted when future events required by the
enactment process historically have not affected the outcome
and are unlikely to do so.
An entity shall not discount current tax assets and liabilities.
Section 23: Deferred Income Taxes
Method
 Under deferred income taxes method, an entity shall recognize the current
and future tax consequences of transactions and other events that have been
recognized in the financial statements. These recognized tax amounts
comprise current tax and deferred tax. a) Current tax is determined in
accordance with is the amount reported on an entity’s income tax return for
the period in conformity with tax laws or regulations. b) Deferred tax is
income tax payable (recoverable) in respect of the taxable profit (tax loss)
for future reporting periods as a result of past transactions or events. The
past transactions or events are those that: i) have not yet been included in
the entity’s income tax return although they have been included when
measuring profit or loss in conformity with this Framework; or ii) have
been included in the entity’s income tax return although they have been not
yet been included when measuring profit or loss in conformity with this
Framework. These differences between amounts reflected in current tax and
amounts reflected in deferred tax are known as temporary differences .
Section 23: Deferred Income Taxes
Method
 Under deferred income taxes method, an entity shall recognize the current and future tax
consequences of transactions and other events that have been recognized in the financial
statements. These recognized tax amounts comprise current tax and deferred tax. a)
Current tax is determined in accordance with is the amount reported on an entity’s income
tax return for the period in conformity with tax laws or regulations. b) Deferred tax is
income tax payable (recoverable) in respect of the taxable profit (tax loss) for future
reporting periods as a result of past transactions or events. The past transactions or events
are those that: i) have not yet been included in the entity’s income tax return although
they have been included when measuring profit or loss in conformity with this
Framework; or ii) have been included in the entity’s income tax return although they have
been not yet been included when measuring profit or loss in conformity with this
Framework. These differences between amounts reflected in current tax and amounts
reflected in deferred tax are known as temporary differences.
 An entity shall recognize a deferred tax liability for all temporary differences that are
expected to increase taxable profit in the future (and therefore result in higher future tax
payments). An entity shall recognize a deferred tax asset for all temporary differences that
are expected to reduce taxable profit in the future (and will therefore benefit the entity by
lowering future tax payments).
Section 24: Foreign Currency Transaction
Section 24: Foreign Entities Section 30: PAS 21: The Effects of
Currency Transaction Foreign Currency Changes in Foreign
Transaction Exchange Rates
Nonmonetary Asset It is subsequently It is subsequently

subsequently measured measured at the exchange measured at the exchange
at fair value rate on the date the fair rate on the date the fair
No provision on value is determined. value is determined.
measurement.
Translation of Same provision as PAS Covered by PAS 21.
Operations or 21.
Investments that are
based or conducted in a
different country with
different functional
currency
No similar provision.
Section 24: Foreign Currency Transaction
Section 24: Foreign Entities Section 30: PAS 21: The Effects of
Currency Transaction Foreign Currency Changes in Foreign
Transaction Exchange Rates
Translation gain or loss It will be presented in It will be presented in

from Functional OCI with RA to PL if OCI with RA to PL if
Currency to Presentation realized. realized.
Currency
It will be presented in
Profit or Loss.
Gain or Loss on Hedging It will be presented in It will be presented in
Instrument designated as OCI but reclassified OCI with RA to PL if
Hedge of Foreign directly to equity or realized.
Investment retained earnings if
Not allowed. realized.
Section 25: Events after the End of
Reporting Period
Section 25: Events after Entities Section 32: PAS 10: Events after
the End of Reporting Events after the End of the Reporting Period
Period Reporting Period
Dividends Declared If an entity declares If an entity declares

If an entity declares dividends to holders of its dividends to holders of
dividends to holders of its equity instruments after equity instruments after
equity instruments after the end of the reporting the reporting period, the
the end of the reporting period, the entity must entity must not recognise
period, the entity must not recognise those those dividends as a
not recognise those dividends as a liability at liability at the end of the
dividends as a liability at the end of the reporting reporting period.
the end of the reporting period. However, the
period. However, the amount may be presented
amount may be presented as a segregated
as a segregated component of retained
component of retained earnings.
earnings.
Section 26: Related Party Disclosures
Section 26: Related Entities Section 33: PAS 24: Related Party
Party Disclosures Related Party Disclosures
Disclosures
Key Management An entity must disclose An entity must disclose

Personnel Compensation key management key management
An entity must disclose personnel compensation personnel compensation
key management in total in total and for each of
personnel compensation the following categories:
in total a)Short-term employee
benefits
b)Post-employment
benefits
c)Other long-term
benefits
d)Termination benefits
e)Share-based payment.
Disclosures
The above disclosures must The above disclosures must The above disclosures must
be made separately for be made separately for be made separately for
each of the following each of the following each of the following
categories: categories: categories:
a)Entities with control, a)Entities with control, a)The parent
joint control or significant joint control or significant b)Entities with joint control
influence over the entity influence over the entity or significant influence
b)Entities over which the b)Entities over which the over the entity
entity has control, joint entity has control, joint c)Subsidiaries
control or significant control or significant d)Associates
influence influence e)Joint ventures in which
c)Key management c)Key management the entity is a venturer
personnel personnel f) Key management
d)Other related parties. d)Other related parties. personnel
g)Other related parties.
Disclosures
At a minimum, entities At a minimum, entities At a minimum, entities
must disclose the following must disclose the following must disclose the following
regarding related party regarding related party regarding related party
transactions: transactions: transactions:
a)The amount of the a)The amount of the a)The amount of the
transactions transactions transactions b
b)The amount of b)The amount of b)The amount of
outstanding balances outstanding balances outstanding balances
including: • Their terms including: • Their terms including: • Their terms
and conditions • Details of and conditions • Details of and conditions • Details of
any guarantees any guarantees any guarantees
c)Provisions for c)Provisions for c)Provisions for
uncollectible receivables uncollectible receivables uncollectible receivables d)
d)The expense recognised d)The expense recognised d)The expense recognised
in the period for bad or in the period for bad or in the period for bad or
doubtful debts. doubtful debts. doubtful debts.
Disclosures
The above disclosures must The above disclosures must The above disclosures must
be made separately for be made separately for be made separately for
each of the following each of the following each of the following
categories: a) Entities with categories: a) Entities with categories: a) The parent
control, joint control or control, joint control or b) Entities with joint
significant influence over significant influence over control or significant
the entity the entity influence over the entity
b) Entities over which the b) Entities over which the c) Subsidiaries
entity has control, joint entity has control, joint d) Associates
control or significant control or significant e) Joint ventures in which
influence influence the entity is a venturer
c) Key management c) Key management f) Key management
personnel personnel personnel
d) Other related parties. d) Other related parties. g) Other related parties.
Section 26: Related Party Section 33: Related Party PAS 24: Related Party
Disclosures Disclosures Disclosures
Disclosures on state An entity is exempt from the IAS 24 (as amended in
controlled entities disclosure requirements above November 2009) provides a
in relation to: a) A state that similar exemption for state
No similar provision. has control, joint control or controlled entities. Although
significant influence over the the above disclosures do not
entity b) Another entity that is need to be made, the following
a related party because the must be disclosed: a) The name
state has control, joint control of the government and the
or significant influence over nature of its relationship with
both parties the reporting entity b) The
following in sufficient detail to
allow users to understand the
effect of the transactions: • The
nature and amount of each
individually significant
transaction • For other
transactions that are
collectively significant, a
qualitative or quantitative
indication of their extent.
Section 27: Biological Assets
Section 27: Biological Entities Section 34: PAS 41: Agriculture
Assets Specialized Activities -
Agriculture
Accounting Policies Fair value less cost to sell Fair value less cost to sell
1.Current Market Price model model
Model; or
2.Cost Model
Initial measurement of Fair value less cost to sell Fair value less cost to sell
Biological Assets
1.Current Market Price
Model – Current Market
Price or Probable selling
price to willing buyers
2.Cost Model - Cost
Agriculture
Subsequent 1. Fair value less cost to 1. Fair value less cost to
measurement of sell sell
Biological Assets 2. Cost less accumulated 2. Cost less accumulated
1.Current Market Price depreciation less depreciation less
Model – Current Market accumulated accumulated
Price or Probable selling impairment losses if impairment losses if
price to willing buyers fair value cannot be fair value cannot be
with changes in PL determined reliably. determined reliably.
2.Cost Model – Cost less
accumulated depreciation
less accumulated
impairment losses
Agriculture
Measurement of 1. Fair value less cost to 1. Fair value less cost to
Agricultural Produce sell at the point of sell at the point of
1.Current Market Price harvest and such harvest and such
Model at the point of measurement shall be measurement shall be
harvest and such the historical cost if the historical cost if
measurement shall be the harvested and harvested and
historical cost if classified as classified as
harvested and classified inventories. inventories.
as inventories.
Agriculture
Provision on Zoo Animal No similar provision. They shall be accounted
and Bearer Plant for under PAS 16:
No similar provision. Property, Plant and
Equipment.
Section 28: Government Grants
Section 28: Government Entities Section 24: PAS 20: Government
Grants Government Grants Grants
Recognition An entity shall recognise Government grants,
An entity shall recognize government grants according including non-monetary
monetary government grants to the nature of the grant as grants, shall not be
as follows: follows: recognised until there is a
a) A grant that does not • A grant that does not reasonable assurance that:
impose specified future impose specified future • The entity will comply with
performance conditions on performance conditions on the conditions attached to the
the recipient is recognized in the recipient is recognised in grants and
income when the grant income when the grant • The grants will be received.
proceeds are receivable proceeds are receivable Government grants are
b) A grant that imposes • A grant that is imposes recognised in profit or loss
specified future performance specified future performance on a systematic basis over
conditions on the recipient is conditions on the recipient is the periods in which the
recognized in income only recognised in income only entity recognises as expenses
when the performance when the performance the related costs for which
conditions are met conditions are met. the grants are intended to
compensate
Section 28: Government Grants
Section 28: Government Entities Section 24: PAS 20: Government
Grants Government Grants Grants
Recognition An entity shall recognise A government grant that
An entity shall recognize government grants according becomes receivable as
monetary government grants as to the nature of the grant as compensation for expenses
follows: follows: • Grants received or losses already incurred or
c) Grants received before the before the income for the purpose of giving
revenue recognition criteria are recognition criteria are immediate financial support
satisfied are recognized as a
satisfied are recognised as a to the entity with no future
liability.
liability and released to related costs shall be
A government grant may take
the form of a transfer of a non-
income when all attached recognised in profit or loss of
monetary asset, such as land or conditions have been the period in which it
other resources, for the use of complied with. becomes receivable. Grants
the entity. In these Grants are measured at the in the form of the transfer of
circumstances, an entity should fair value of the asset a non-monetary asset can be
make an accounting policy to received or receivable. measured either at the fair
either: a) not recognize the value of the asset received or
non-monetary grant; or b) at nominal amount.
recognize the non-monetary
grant at fair value.
Infrastructure Assets
No similar Provision Entities
Infrastructure Assets Accounting Models: Accounting Models:
No Similar Provision 1.Intangible Asset Models 1.Intangible Asset Models
2.Financial Asset Models 2.Financial Asset Models
No Similar Provision Intangible Asset Models Intangible Asset Models
1. Cost Model or 1. Cost Model or
2. Revaluation Model 2. Revaluation Model
No Similar Provision Financial Asset Models Financial Asset Models
1. FAFVPL or 1. FAFVPL; or
2. FAAC 2. FAFVOCI; or
3. FAAC
THE END
Thank You

Full PFRS vs. PFRS For Medium Entities vs. PFRS For Small Entities

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Full PFRS vs. PFRS For Medium Entities vs. PFRS For Small Entities

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Full PFRS vs.

PFRS for Medium

Comprehensive Income Profit or Loss Profit or Loss

Combined Financial It includes guidance on Combined financial

Recognition All borrowing costs are Borrowing costs that are

Measurement For equity-settled share- For equity-settled share-

Measurement The fair value of equity The fair value of equity

Intrinsic value option on Not allowed. Allowed if the fair value

Immediate recognition of An impairment loss must An impairment loss must

Post-Employment Actuarial gain or loss Actuarial gain or loss

Accounting Policies Mandatory Deferred Tax Mandatory Deferred Tax

Nonmonetary Asset It is subsequently It is subsequently

Translation gain or loss It will be presented in It will be presented in

Dividends Declared If an entity declares If an entity declares

Key Management An entity must disclose An entity must disclose

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