Law Summary
Scope and Covered Entities
- Entities required to comply include:
- Large corporations with assets over P350 million and liabilities over P250 million.
- Publicly accountable entities mandated to adopt PFRS.
- Small and medium enterprises (SMEs) which have opted to adopt full PFRS despite exemption.
Transition and Impact Study Requirement
- Covered companies have a deadline of September 30, 2011, to study the impact of adopting PFRS 9 on their 2011 financial statements.
- Entities that adopted PFRS 9 (2009) in 2010 must evaluate impact relating specifically to financial liabilities under PFRS 9 (2010).
Interim Financial Statements Compliance
- Interim statements submitted in 2011 should generally not reflect the impact of early adoption unless:
- A complete evaluation has been done and the early adoption decision finalized.
- The entity already adopted PFRS 9 (2009) in 2010, in which case the interim statements must reflect it.
- Required disclosures as of June 30, 2011, include:
- Whether the company decided on early adoption or not.
- Status of impact evaluation.
- Brief account impact discussion.
- If early adoption occurs for 2011 reporting, September 30, 2011, interim statements must include qualitative and quantitative impact discussion.
Non-Early Adopters and Further Evaluation
- Entities opting not to early adopt for 2011 must:
- Conduct another impact evaluation early in 2012 using December 31, 2011, balances.
- Disclose decision not to early adopt, ongoing evaluations and future reporting intentions in September 2011 interim statements.
- Update decisions and apply standards with impact discussion from March 31, 2012 interim report if early adoption is decided for 2012.
Penalties for Non-Compliance
- Companies failing to comply with these Guidelines will be subject to fines as prescribed in SEC Memorandum Circular No. 8, Series of 2009.
Commission Adoption and Authority
- Guidelines adopted on May 16, 2011, under the authority of the SEC Chairperson Teresita J. Herbosa.