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Korbel Foundation College, Inc
Korbel Foundation College, Inc
Korbel Foundation College, Inc
Financial Governance(FG) Regulations requires all financial processes are managed according to a stringent set of rules
and regulations, backed by accurate reporting capabilities. One hundred thirty-three (133) out of 196 countries have
adopted the International Financial Reporting Standards(IFRSs).
It is vital to financial governance of an entities. A set of accounting principles, interpretations, and pronouncements that
must be adopted in the preparation and submission of annual financial statements of a particular class of entities. It
includes but not limited to IFRS. The figure shows the conceptual idea of financial reporting also known as Conceptual
Framework for Financial Reporting. The top represents the objective of the accounting and lower level represents the
foundation of how accounting was being implemented. The middle level is the bridge between the first and second level
where elements of FS and qualitative characteristics in preparation of FS were included.
FIRST LEVEL
Objective: Provide information
The Why –Purpose of
about the reporting entity that
Accounting
is useful in making economic
decisions
International Financial Reporting Standards (IFRS) it is a set of accounting standards and interpretations stating how
particular types of transactions and other events should be reported in the Financial Statements developed by an
independent, not-for-profit organizations called International Accounting Standards Board(IASB). It also allows flexibility
and discretion when preparing a company’s financials and results to clearer and understandable body of accounting
literature. Shifting to IFRS will enhance corporate structure of an entity.
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KORBEL FOUNDATION COLLEGE, INC.
Purok Spring, Brgy. Morales
Koronadal City, Philippines, 9506
Telephone No. 228-1996 JUNE 2020
ACCOUNTING REVIEW LECTURER: IPRIL JOY R. NAQUITA, CPA, MBM
Any issues and concern regarding financial reporting may refer to the following IFRS specific guidance and these will be a
reference to the higher accounting topics.
In September 2007 International Accounting Standard 1 Presentation of Financial Statements (IAS 1) replaced IAS
1 Presentation of Financial Statements (revised in 2003) as amended in 2006. Subsequent amendments to
standards were made in 2011. IAS 1 sets overall requirements for the presentation of financial statements,
guidelines for their structure and minimum requirements for their content.
Reasons for revising IAS 1 in 2007 was to improve and reorder sections of IAS 1 to make it easier to read. In June
2011 the Board issued Presentation of Items of Other Comprehensive Income (Amendments to IAS 1). The reasons
for amending IAS 1 in 2011 was to improve the consistency and clarity of the presentation of items of other
comprehensive income specifically presenting profit or loss and other comprehensive income together and with
equal prominence.
The changes from previous requirements (2007 and 2011 changes) include a complete set of Financial Statements,
reporting changes in equity and comprehensive income, other comprehensive income-related tax effects and
reclassification adjustments and presentation of dividends.
IASB is currently in the process of updating its conceptual framework. This conceptual framework project is conducted in
phases. As a source of globally comparable information, IFRS Standards are also of vital importance to regulators around
the world. Now it is adopted in the Philippines as Philippine Financial Reporting Standards(PFRS).
The Board recognizes the limitation of Conceptual Framework and IFRS. In those cases, where there is a conflict between
them the requirements of the IFRS will prevail over those conceptual frameworks. However, the Board will be guided by
the conceptual framework in the development of future IFRS.
Conceptual Framework sets out the concepts that underlie the preparation and presentation of financial statements for
external users. A framework issued by the International Accounting Standards Board in September 2010. It superseded
the Framework for the Preparation and Presentation of Financial Statements.
Stated in the framework is the:
1. Objective of general purpose financial reporting
2. Reporting entity to be added
3. Qualitative characteristics of useful financial information
4. The framework
Purpose of the Conceptual Framework
To assists the Board on the development of future IFRSs and in its review of existing IFRSs;
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KORBEL FOUNDATION COLLEGE, INC.
Purok Spring, Brgy. Morales
Koronadal City, Philippines, 9506
Telephone No. 228-1996 JUNE 2020
ACCOUNTING REVIEW LECTURER: IPRIL JOY R. NAQUITA, CPA, MBM
To assist the Board in promoting harmonization of regulations, accounting standards and procedures relating to
the presentation of financial statements by providing a basis for reducing the number of alternative accounting
treatments permitted by IFRSs;
To assist national standard setting bodies in developing national standards;
To assist preparers of financial statements in applying IFRSs and in dealing with topics that have yet to form the
subject of an IFRS;
To assist auditors in forming an opinion on whether financial statements comply with IFRSs;
To assist users of financial statements in interpreting the information contained in the financial statements
prepared in compliance with IFRSs; and
To provide those who are interested in the work of the IASB with information about its approach prepared to the
formulation of IFRSs;
The conceptual Framework is not an IFRS and hence does not define standards for any particular measurement or
disclosure issue. Nothing in this Conceptual Framework overrides any specific IFRS. The conceptual framework will be
revised from time to time on the basis of the Board’s experience of working with it.
Objective of general purpose financial reporting (refers to Financial Statements) forms the foundation of the
conceptual framework. It provides financial information about the reporting entity (specifically to external) that
is useful to existing and potential investors, lenders, and other creditors in making decisions about providing
resources to the entity. This information is to help them assess the prospects for future net cash flows to an
entity.
General purpose financial reports do not and cannot provide all of the information that existing and potential
investors, lenders, and other creditors need. These are not designed to show the value of a reporting entity but
provide information to help estimate the value of the reporting entity.
To a large extent, financial reports are based on estimates, judgements and models rather than exact depictions.
The conceptual framework establishes the concepts that underlie those estimates, judgements and models.
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