Financial Statements Critiquing
Full PFRSSan Miguel Pure Foods Company Inc.
Javier, Zaira Camille C.
Loyola, Lester L.BSA31|
REPORT OF INDEPENDENT AUTHORS
* In preparing the report, it is clearly manifested that the auditors of SMPFCI follow the required reporting standards. The auditors’ report evidently affirmed whether the financial statements are in compliance with the financial reporting framework, which in this case is the Philippine Financial Reporting Standards. The report also included clear descriptions of what are the responsibilities of the management as well as the auditors themselves. And as required by the reporting standard, the auditors’ report regards the informative disclosures in the financial statements to be reasonably adequate as basis for the Group’s preparation and fair presentation of its financial statements. The report also stated an expression of opinion of auditors regarding the financial statements and their basis for auditing.
STATEMENT OF FINANCIAL POSITION
* As a compliance with the requirement found under IAS 1, the Statement of Financial Position of SMPFCI reported and classified individual items in sufficient details. The separate presentation and classification of the items permit users to assess the amounts, timing and uncertainty of future cash flows. Presenting the SFP this way also makes it easier for users to evaluate the company’s liquidity and financial profitability and risk. * Another point the critics noted in the Statement of Financial Position is the presentation of the line items itself. Provided that the company prepares its financial statements in accordance with Philippine Financial Reporting Standards, the line items presented in the financial statements particularly in its Statement of Financial Position should also appear in captions conforming to the standards. And with the presented Statement of Financial Position, the line items are appropriately presented using the Philippine term. *
* CURRENT ASSETS
* Current assets of the company deals with cash and other assets that the company expects to convert into cash, sell, or consume in either one year or in the operating cycle, whichever is longer. *
* CASH AND CASH EQUIVALENTS
* IAS 7 – Statement Of Cash Flows
* IAS 32– Financial Instruments ― Disclosure and Presentation * IAS 39 – Financial Instruments ― Recognition and Measurement *
* Due to the fact that there is no specific standard dealing with cash, the only guidance in relation to this item is found in PAS 1 which states that cash shall be reported if an item is unrestricted in use. On the other hand, cash equivalents are defined under PAS 7, “short term and highly liquid investments that are readily convertible into cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates and are acquired three months before maturity”. * The line item “Cash and Cash Equivalents” presented in the Statement of Financial Position of the company comprised of financial assets with relatively short term maturities. The amounts presented for the line item “Cash and Cash Equivalents” together with the line item “Trade and Other Receivables” approximate the fair values primarily due to the relatively short term maturities of these...