BENEFITS OF GLOBAL

ACCOUNTING STANDARDS
•Companies gain access to foreign capital markets.

•Domestic capital markets gain credibility and

become more attractive to foreign investors.

•Compliance with standards increases a

company’s credibility, thus letting them gain
access to better financing terms.
• For companies that operate in different countries, the
preparations of financial statements is streamlined.

• Financial data are easily understood by users across

countries.

• Processing of data becomes less costly.

• Sharing of financial data between users is more

transparent.
• Compliance with standards makes reports more
acceptable from the perspective of regulatory agencies.

• It is easier to ensure continuity.

• Knowledge is easily shared across countries. Training and

development are streamlined as well.

• Credentials of professionals are easily streamlined.

 WHY ARE THERE
ACCOUNTING VARIATIONS?
• Companies have to meet both political and economic
constraints in their host countries. Political and economic
conditions such as tax law and labor law (laws on wage
and nonwage benefits which affects a firm’s cost
structure) affect how laws and regulations are enforced
on businesses.

• Accounting practices vary from one country to another.

There are differences in the following:

• Economic and social frameworks-language, culture, currency,

exchange, inflation and other variables that affect how financial
data is obtained and processed

• Quality of education obtained by accounting professionals

• How capital market in certain countries operate

PHILIPPINE
FINANCIAL
REPORTING
STANDARDS
• The Financial Reporting Standards Council issues its standards in a
series of pronouncements called Philippine Financial Reporting
Standards (PFRS). The PFRS include the following:

• PFRS which correspond to IFRS Reporting Standards

• Philippine Accounting Standards which correspond to AIS

• Philippine Interpretations which correspond to Interpretations of

the IFRIC and the Standing Interpretations Committee, and
Interpretations developed by the Philippine Interpretation
Committee.
TYPES OF FINANCIAL
STATEMENTS
 BALANCE SHEET

This contains information as of the date of its preparation about

the firm’s
Assets -everything of value the company owns,
Liabilities -debts,
Shareholders’ equity -the money invested by the company
owners.
 INCOME STATEMENT

This includes the revenue the firm has earned over a

specific period of time usually a quarter of a year or a full
year; the expenses it has incurred during the same period;
and the profit the firm has earned.
 CASH FLOW STATEMENT

This is a report of the cash received and cash

spent by the firm over a specified period of
time.
 BALANCE SHEET

It provides a picture of a firm’s financial

position within a specific period.
 Company ABC
Balance Sheet
As of 31 December 2017

Current Assets Current Liabilities

Cash and cash equivalents Accrued Wages and Taxes
Accounts Receivable Accounts Payable
Inventory Notes Payable

Long-term Debt
Fixed Assets
Plant, Property, and Equipment
Stockholder’s Equity
Common stock + Retained Earnings
This must equal:
Total Assets (Current asset + fixed asset) – (Current Liabilities – Long
term Liabilities)

Total Liabilities and Equity