The Standard Setting Process of Accounting in the Philippines

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The Accounting Standard Council was created by the PICPA to formalize the accounting standard setting function in the Philippines. The main function of the ASC is to establish and improve generally accepted accounting principles in the Philippines. The approved statements of the ASC are called “Statement of Financial Accounting Standards” or SFAS. In 1996, the Philippine accounting standards had been changed and based on IASC Accounting Standards. The International Accounting Standards Committee or IASC is an independent private sector which establishes the uniformity of the accounting principles in business organizations around the world. After changing into IASC accounting standards, a decision was made to move totally to International Accounting Standards (IAS) in 1997. The objective of the ASC in the Philippine Accounting Standards is to develop an understandable and enforceable accounting standard that require high quality, transparent and comparable information in the Financial Statements. From 1997 to 2000, the ASC developed accounting standards that were already based on IAS. But it is in the year 2001 that sweeping revisions of Philippine accounting standards are made in conformity with their counterpart in the IAS. The ASC set the year 2005 for the full adoption of the International Accounting standards in the Philippines. However, even before the Philippines had made full adoption of the International accounting Standards, improved and revised IAS and IFRS have been developed and promulgated. To monitor the revisions and redrafting of the IFRS and to ensure that improvements in the IFRS are being made effective in the Philippines, the Financial Reporting Standards Council (FRSC) was established in 2006. It succeeded the ASC in its main function of establishing generally accepted accounting principles in the Philippines. In November 2006, FRSC formed the Philippine Interpretations Committee (PIC) to assist the former in establishing the financial...
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