The Securities and Exchange Commission has formally adopted the latest set of financial reporting pronouncements to ensure the country’s reporting framework keeps pace with changing global accounting standards and growing demands for sustainability-related disclosures. Under a newly issued memorandum circular, the SEC will integrate the revised Philippine Financial Reporting Standards and the updated guidance from the Philippine Interpretations Committee into its official rules and regulations. The PFRS serves as the country’s primary authority on how financial transactions are recorded, measured, presented, and disclosed in financial statements, while the PIC guidance offers practical clarifications on how these standards should be applied in practice. These updates were first developed by the Philippine Financial and Sustainability Reporting Standards Council, and have received prior approval from both the Board of Accountancy and the Professional Regulation Commission.
Key changes covered in the update include new rules for accounting for experience refunds or no-claims bonuses, as well as the adoption of the international standards IFRS S1 and IFRS S2 for general sustainability-related financial disclosures and climate-related disclosures respectively, as endorsed by the Philippine Sustainability Reporting Committee. The SEC is also adopting the 2024 edition of financial reporting guidance, revised rules on the presentation and disclosure of financial statements, clearer instructions on how to split transaction prices for bundled contracts under PFRS 15, amendments affecting how financial instruments are classified and measured, and specific guidance on when to recognize costs related to plastic packaging diversion activities under the Extended Producer Responsibility Act of 2022.
