Question & AnswerQ&A (COA Circular No. 2015-003)
Government corporations refer to government-owned or controlled corporations (GOCCs), government financial institutions (GFIs), and government instrumentalities with corporate powers (GICPs)/government corporate entities (GCEs), including their subsidiaries and water districts. Their regional, branch, and field offices are component units of the corporation.
A GOCC is any agency organized as a stock or non-stock corporation vested with functions relating to public needs, owned by the Philippine government directly or through its instrumentalities either wholly or to the extent of at least a majority of its outstanding capital stock.
GFIs are financial institutions or corporations in which the government directly or indirectly owns a majority of the capital stock and are either registered with or supervised by the BSP, or collect/transact public funds to invest in financial instruments or assets, including entities like the Government Service Insurance System and Social Security System.
These are government agencies or instrumentalities not organized as corporations nor part of the departmental framework but vested by law with special functions or jurisdiction, endowed with some or all corporate powers, usually with operational autonomy through a charter, and administering special funds.
A GBE has: (a) the power to contract in its own name; (b) assigned financial and operational authority to carry on a business; (c) sells goods/services normally at profit or full cost recovery; (d) is not reliant on continuing government funding to be a going concern, except at arm's length; and (e) is controlled by a public sector entity.
GBEs also include banks and non-bank financial institutions supervised by the Bangko Sentral ng Pilipinas (BSP) and entities registered with the Securities and Exchange Commission (SEC) required to adopt Philippine Financial Reporting Standards (PFRS).
GBEs are required to apply the Philippine Financial Reporting Standards (PFRS) as prescribed by the Philippine Financial Reporting Standards Council, BSP Circulars, and SEC rules.
Non-GBEs must apply the Philippine Public Sector Accounting Standards (PPSAS) as prescribed by COA Resolution No. 2014-003.
The Chief Accountants/Heads of Accounting Units and Budget Officers/Heads of Budget Units of GBEs/Non-GBEs and other concerned offices, with oversight by the Heads of Government Corporations, are responsible for proper conversion and reconciliation.
SMEs are corporations that have total assets between P3 Million and P350 Million or total liabilities between P3 Million and P250 Million; are not required to file financial statements under SRC Rule 68.1; are not filing for public market instruments; are not holders of secondary licenses from regulatory agencies such as banks and investment houses; and are not public utilities.
During the update, new accounts for PPSAS should be used per standards; GBEs should use all applicable accounts under COA Circular No. 2014-003 and their regulatory bodies; and accounts not converted due to unsettled issues shall be converted to the most appropriate RCA account until further clarification.
All inconsistent issuances are deemed repealed or amended accordingly to conform with this Circular.
It took effect fifteen (15) days after its publication in a newspaper of general circulation.