Definitions of Key Terms
- Government Corporations: Includes government-owned or controlled corporations (GOCCs), government financial institutions (GFIs), government instrumentalities with corporate powers (GICPs)/government corporate entities (GCEs), including subsidiaries and water districts.
- GOCCs: Stock or non-stock corporations owned by the Philippine government (directly or indirectly majority ownership) performing governmental or proprietary functions.
- GFIs: Majority government-owned financial institutions supervised by BSP or involved in public fund collection and investment.
- GICPs/GCEs: Government instrumentalities endowed with corporate powers through law or charter, enjoying operational autonomy but not classified as regular corporations.
- GBEs: Government corporations meeting criteria such as power to contract, financial/operational authority to do business, sale of goods/services at profit or cost recovery, not reliant on continuous government funding, and controlled by public sector entities.
- GBEs include trading enterprises, financial enterprises, and BSP-supervised banks and SEC-registered entities adopting PFRS.
- Non-GBEs: Entities not fulfilling all GBE characteristics.
- Public Sector Entities: National, regional, local government units, agencies, boards, commissions, subject to budget limits.
- Small and Medium-sized Entities (SMEs): Corporations with assets between P3 million to P350 million; liabilities between P3 million to P250 million; not required or filing under SRC rules except where stated; not secondary license holders; not public utilities.
Guidelines on Financial Reporting Framework Application
- GBEs are required to apply PFRS, in accordance with:
- International Public Sector Accounting Standards (IPSAS) as adopted in PPSAS 1.
- BSP Circular 494 series of 2005.
- SEC Rules 68 and 68.1 and amendments.
- SMEs classified as GBEs may adopt PFRS for SMEs per SEC Notice (Dec 11, 2009).
- Non-GBEs must apply PPSAS as prescribed by COA Resolution No. 2014-003.
Procedures for First-time Adoption and Conversion
- Both GBEs and Non-GBEs shall convert their financial statements to the applicable framework upon first-time adoption.
- The Government Accountancy Sector (GAS) will prepare specific guidelines for conversion and reconciliation in consultation with the Corporate Government Sector (CGS) and concerned entities.
- Revised Chart of Accounts (RCA) under COA Circular No. 2014-003 will be updated to:
- Include BSP Financial Reporting Package accounts and other pertinent GBE accounts.
- Include accounts for Non-GBEs.
- Electronic-New Government Accounting System (e-NGAS) conversion procedures to be separately issued.
Responsibilities of Government Entities
- Chief Accountants/Heads of Accounting Units and Budget Officers/Heads of Budget Units responsible for:
- Proper conversion and reconciliation of accounts.
- Submission of Journal Entry Vouchers and Financial Statements to COA Auditors and GAS.
- Heads of Government Corporations shall oversee the accurate financial statement conversion in their agencies.
Saving Clause and Repealing Clause
- Issues not covered by this Circular to be referred to GAS for resolution.
- All inconsistent prior issuances are repealed or amended as necessary.
Transitory Provisions During Chart of Accounts Update
- New accounts for PPSAS to be utilized as per standards.
- GBEs must use applicable accounts prescribed under COA Circular No. 2014-003 and those from regulatory bodies for PFRS compliance.
- Unconverted accounts pending issue resolution must be converted to the most appropriate RCA account until further guidance is issued.
Effectivity
- This Circular took effect 15 days after publication in a newspaper of general circulation.