Download CHAPTER+2-+GAAP

• As mechanism to avoid confusion and discrepancy in financial statement preparation,
accounting organizations in different countries worldwide agreed to have uniform
standards.
• Thus the creation of IASC, in June 1973 which was later replaced by the International
Accounting Standards Board (IASB).
• They issued International Accounting Standards (IAS) and International Financial
Reporting Standards (IFRS).
• They also formed a committee known as Standing Interpretations Committee (SIC) which
was responsible for providing interpretation and guidance to the accounting issuances.
• SIC replaced as the International Financial Reporting Interpretations Committee (IFRIC)
which pronounces SIC and IFRIC Interpretations.
IFRS
IAS
IFRS
SIC and IFRIC
Interpretations
Name of Standards/ Interpretations
Numbers of
Standards
International Accounting Standards
IAS 1-41
International Financial Reporting Standards
IFRS 1-13
Interpretations
Various Numbers
• The birth of IASB in the global arena also resulted in
the creation of Financial Reporting Standard Council
(FRSC) in the Philippines in 2004.
Philippine Accounting Organization
Accounting Standards
& Issuances
Accounting Standards Council (ASC)
PAS
Financial Reporting Standards Council
PFRS
Interpretation Committee (IC) and
Philippine Interpretations Committee
(PIC)
IC Interpretations and
PIC Interpretations
Name of Standards/ Interpretations
Numbers of
Standards
Philippine Accounting Standards
IAS 1-41
Philippine Financial Reporting Standards
IFRS 1-13
Interpretations
Various Numbers
Financial
Statements
Philippine Financial
Reporting Standards
Conceptual
Framework
• Is a body of concepts, terms, and assumptions that set out
the concepts that underlie the preparation and
presentation of financial statements for external users.
• It is used to set standards, enhance consistency across
standards and provide benchmark for judgment.
• In the absence of a specific standard or interpretations,
Conceptual framework can be used.
a.The Conceptual Framework serves as general guidelines in the preparation
and presentation of financial statements in the absences of specific PFRS;
b.The Conceptual Framework is not PFRS;
c.The Conceptual Framework does not define standards for any particular
measurement or disclosure issue;
d.Nothing in the Conceptual Framework overrides any specific PFRS;
e.In case of conflict between the CF and PFRS, the conditions and
requirements for measurement and disclosure set by the latter will prevail
over former.