Regulatory Alerts2018-03-28
SEC Memorandum Circular No. 5 Series of 2018: Adoption of PFRS for Small Entities
The Securities and Exchange Commission adopted the Philippine Financial Reporting Standards for Small Entities, revising SRC Rule 68 to mandate specific financial reporting frameworks based on entity size. The circular classifies entities into large, medium-sized, small, and micro categories with distinct asset and liability thresholds, requiring small entities to use PFRS for Small Entities while allowing micro entities to choose between that standard or the income tax basis. Exemptions permitting the use of full PFRS are granted for subsidiaries of larger reporting groups, entities planning public offerings, or those with foreign operations, with the standard becoming effective for annual periods beginning on or after January 1, 2019.
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