Philippine Public Sector Accounting Standard 1

PRESENTATION OF FINANCIAL STATEMENTS

Table of Contents

PAG
Number

BACKGROUND

INTRODUCTION TO THE IPSAS 1

PHILIPPINE APPLICATION GUIDANCE TO IPSAS 1

Objective 1

Scope 2

Responsibility for Financial Statements 3

Components of Financial Statements 4

Consistency of Presentation 5

Reporting Period 6

Effective Date 7

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 Philippine Public Sector Accounting Standard 1
PRESENTATION OF FINANCIAL STATEMENTS

Background

This Philippine Public Sector Accounting Standard (PPSAS) 1 consists of International

Public Sector Accounting Standard (IPSAS) 1, Presentation of Financial Statements,, and
the Philippine Application Guidance (PAG) prepared to suit the Philippine public sector
situation.

The IPSAS 1 was issued in May 2000 and revised in December 2006 by the International
Public Sector Accounting Standards Board (IPSASB) of the International Federation of
Accountants (IFAC). This includes amendments resulting from IPSASs issued up to
January 15, 2012.

The PAG (in italics) provides supplementary guidance on the proper implementation of
IPSAS 1 and also the reason for not adopting some paragraphs of the IPSAS 1.

Introduction to the IPSAS 1

IPSAS 1 sets out overall considerations for the presentation of financial statements,
guidance for their structure, and minimum requirements for the content of financial
statements prepared under the accrual basis of accounting.

Philippine Application Guidance to IPSAS 1

Objective

PAG1. Paragraph 1 states the objective of this standard and sets out overall
considerations for the presentation of financial statements prepared under the
accrual basis of accounting.

Generally, the Philippine Public Sector Accounting Standards is on accrual basis

except for transactions otherwise accounted for as required by law.

Scope

PAG2. Paragraph 5 deals with the applicability of this Standard to all public sector
entities other than Government Business Enterprises (GBEs).

GBE is an entity that has all the following characteristics: (a) Is an entity with the
power to contract in its own name; (b) Has been assigned the financial and
operational authority to carry on a business; (c) Sells goods and services, in the
normal course of its business, to other entities at a profit or full cost recovery; (d)
Is not reliant on continuing government funding to be a going concern (other

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 than purchases of outputs at arms length); and (e) Is controlled by a public sector
entity.

This standard shall be applied to all National Government Agencies (NGAs), Local
Government Units (LGUs) and Government-Owned and/or Controlled
Corporations (GOCCs) not considered as GBEs.

Responsibility for Financial Statements

PAG3. Paragraphs 19-20 deal with identification of responsible officers for the
preparation and presentation of the agencies financial statements.

The responsibility for the fair presentation and reliability of financial statements
rests with the management of the reporting agency, particularly the head of
finance/accounting office and the head of agency or his authorized
representative.

Components of Financial Statements

PAG4. Paragraph 21 requires an entity that makes publicly available its approved
budget, to prepare a comparison of budget and actual amounts either as a
separate additional financial statement or as a budget column in the financial
statements.

A separate additional financial statement for comparison of budget and actual

amounts shall be prepared since the financial statements and budget of NGAs,
LGUs and GOCCs not considered as GBEs are not on the same accounting basis.

Consistency of Presentation

PAG5. Paragraphs 43 and 44 pertain to changes in the presentation of entitys financial

statements if the changed presentation provides information that is reliable and
is more relevant to users of the financial statements.

The cases cited in these paragraphs shall not be adopted.

Reporting Period

PAG6. Paragraph 67 pertains to cases when entities might change its reporting date.

This is not applicable since the reporting date is fixed for all entities.

Effective Date

PAG7. This PPSAS shall apply for annual financial statements covering periods beginning
January 1, 2014.

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January 2014
Public Sector Auditing Standards
Board
(PSSB Auditing)