TAX & ACCOUNTING RECONCILIATION

PIE – Public Interest Entity

Treatment: Full PFRS

Non-PIE –

Large: Total assets 350M Total Liab 250M

Medium: Assets and Liab more than 100M but not more than 250M

Small: Total Assets and Liab not more than 100M

 PFRS 15 Revenue Recognition (Real Estates)

 For tax Revenue recognition (accrual, unless a specific method is prescribed by the BIR)
 Tax Revenue (When earliest)

PFRS INCOME TAX

Revenue Lessor > over the term of lease (pantay
pantay)
Revenue – Real Estate
Recognized when control over the asset is
transferred to the customer.
Ordinary Asset. Di alam ni BIR lahat ng assets!
Cash and Deferred Cash Basis – Full Recognition
Installment – Based on Collection (if not > 25%)
Real Estate Developer
Revenue is recognized when earned or when
received whichever comes first
 Sale of Real Property
Cash Basis
Deferred Cash Basis – More than 25%
----- Gains are taxable in the year of sale
Installment Basis – Initial Payment is not more
than 25%
------ Only portion of the percentage of Total
consideration received during the year
- Upon delivery or transfer of Title.

- Revenue is recognized using the

percentage of completion
- PFRS 15.
 Over the period of Time.
- (Mostly sale of service) When the
customers simultaneously satisfy benefits
and consummation.
- (Esp. Real Estate) When the performance
does not create an asset with alternative
use.
-

Principal / Agent Relationship

Principal (Functions/Accountability)  Travel, Security, & Janitorial Agency
- Price Setting - Portion for remittance should not be
- Inventory Risk reported as revenue.
- Credit Risk - Agency Fee (with Ruling) is only reported
- Primary Responsibility - Janitorial Agency (without ruling)
reported as billed amount.
TAX & ACCOUNTING RECONCILIATION
 Whether selling of Goods or Services,
follow Accrual basis!