Guidelines on Filing Functional Currency FS

Companies filing financial statements denominated in a currency other than the Philippine peso for statutory purposes must notify the Securities and Exchange Commission (SEC).
Notification must include an assessment justifying the determination of the functional currency.
An illustrative notification format is provided in Annex A.

The notification must be signed by the company’s Chief Executive Officer and Chief Financial Officer.
It must be accompanied by a report from the external auditor affirming that the functional currency determination complies with PAS 21.
An illustrative external auditor's report is provided in Annex B.

If a company’s functional currency is not the Philippine peso but it opts to present financial statements in Philippine peso, it must submit financial statements in both the functional currency and Philippine peso.
The translation to Philippine peso must adhere to PAS 21 requirements.
A notification similar to the initial filing must be submitted to the SEC.

Notifications for initial functional currency financial statement filings must be submitted within 45 days after the year-end in which such financial statements are first presented.

When a company changes its functional currency, it must file a notice with the SEC within 30 days after the end of the year in which the change occurred.
The notice should include the reasons for the change and be signed by appropriate officers.
A report from the external auditor confirming compliance with PAS 21 must accompany this notice.
The SEC reserves the right to object to a change in functional currency based on previous company representations and PAS 21 principles.

This Circular shall be published in two newspapers of general circulation in the Philippines.
It takes effect 15 days after the last publication date.

Non-compliance with these guidelines will render the company’s financial statements non-compliant with applicable regulations.
Companies failing to comply risk sanctions under existing laws governing financial reporting and corporate compliance.