Areas of Comparison Similarities PFRS for SMEs Full PFRS

(Section)
1 - Definition -the definition, -for financial reporting -overview The
recognition, and purposes in the Philippine
measurement of Philippines -financial
financial statement -the PFRS for SMEs will Reporting
elements are the same apply to n corporations. Standards
in the PFRS for SMEs Between P3 million to (PFRS)
and the complete PFRS. P350 million in total Philippine
-the general provisions assets Accounting
in the compilation of -between P3 million Standards
financial statements are and P250 million in (PAS)
the same in both the total liabilities -new set of
full PFRS and the PFRS -financial statements Generally
for SMEs. are not required to be Accepted
filed. Accounting
Principles
(GAAP)
-issued by the
Accounting
Standards
Council (ASC)
-to govern the
preparation of
financial
statements.
2 - Financial -In terms of providing -however, the same -areconciliation of
statement notes to financial criterion applies if the equity items between
presentations accounts, the PFRS for only changes in equity the beginning and
SMEs and the full PFRS during the period are conclusion of the period
are identical. due to profit or loss, is necessary in a
-the provisions of the dividend payments, statement of changes in
PFRS for SMEs and the correction of prior- equity.
complete PFRS are the period errors, or -on the face of the
same. changes in accounting statement of financial
-in terms of related policy. situation, both the full
party disclosures, the -instead of having a PFRS and the PFRS for
PFRS for SMEs and the statement of SMEs require nearly
full PFRS follow the comprehensive income identical line items.
same rules. and a statement of
-accounting and changes in equity, a
reporting events combined statement of
following the end of the income and retained
reporting period are earnings m might be
covered by both the produced.
PFRS for SMEs and the
complete PFRS.
3 - Statement of -explicitly -the PFRS for SMEs -Required to be
financial position -Current-Noncurrent demands the prepared under certain
presentation or order of presentation of both circumstances
liquidity associate investments
and joint venture
investments.
4 - Statement of -the presentation of -no items of other -either single or two-
comprehensive total comprehensive comprehensive income statement presentation
income income is the same in it may present only an
both the full PFRS and income statement
the PFRS for SMEs. -the bottom line is
-t he provisions on the labeled profit or loss
display of total
comprehensive income
in the PFRS for SMEs
and the complete PFRS
are the same.
5 - Statement of - a statement of -for each component of -under full PFRS,
changes in equity and changes in equity is equity, the statement of however, a single
statement of income always required. changes in equity shows statement of income
and retained earnings a reconciliation of the and retained earnings is
carrying amount at the not permissible.
beginning and end of -the third statement of
the period. financial situation as of
the beginning of the
earliest comparative
period is required under
full PFRS.
6 - Statement of cash -the entity may use -not explicitly stated its -use of direct method
flow titles for the statements encouragement of the
other than those used use of direct method
in the standard.
7 - Notes to financial -with disclosures of -reduced and simplified -numerous, detailedand
statements judgments and key complex
estimates
8 - Accounting a. Accounting policies -at a lower cost of -regard needs to be
policies, estimates, are chosen. impairment, or via given to the materiality
and errors b. Accounting policies profit or loss at fair considerations[IFRS
are consistent. value Framework, paras 82-
c. Accounting policies -when accounting for 88]
have changed. different sorts of
d. Accounting estimates investments in different
have changed. classes, multiple
e. Error correction from accounting policies are
a previous era allowed.
9 - Financial -both the PFRS for SMEs -section for simple - Recognition and
instruments and full PFRS have the payables and measurement
 same definitions of a receivables -Financial assets or
financial instrument, -other basic financial liabilities at fair value
financial asset and instruments through profit or loss,
financial liability -section for other, more held-to maturity
complex financial investments, loans and
instruments receivables and
-measured at amortized available-for-sale
cost financial assets.
10 - Inventories -lower of cost and net -allow three inventory -specific identification
realizable value (NRV) valuation methods(cost for large items
formulas) -Inventory cost includes
-first-in, first-out (FIFO) costs to purchase, costs
-weighted average cost; of conversion and costs
-specific identification. to bring the asset to
present location and
condition .
11 - Investment in - The equity method -The cost model (cost - cost and fair value
associate less any accumulated model are not
impairment losses). permitted except in
-The fair value through separate financial
profit or loss model statements
12 - Investment -the investment -under PFRS for SMEs, -full PFRS allows
property property is accounted investment property is accounting policy
for as property, plant measured at fair value if choice of either fair
and equipment using the fair value can be value model or cost
the cost depreciation - measured reliably mode
impairment model. without undue cost or
-to be presented as a effort on an ongoing
separate line item in basis.
the Statement of
Financial Condition .
13 - Property, plant, -the PFRS for SMEs and -under PFRS for SMEs, -full PFRS provides that
and equipment full PFRS are the same property, plant and an entity shall choose
with respect to other equipment shall be the cost model or
matters related to measured using the revaluation model as an
property, plant and cost model only accounting policy and
equipment, such as shall apply that policy to
depreciation method, an entire class of
useful liferesidual value, property, plant and
depreciation of equipment
significant components,
impairment and
derecognition
14 - Intangible assets -intangible assets are -R&D costs are -cotst are generally
initially measured at fair recognized as expenses expensed
value. -the life shall be -development costsmay
-they are subsequently determined based be capitalized as
 measured in management’s best intangible asset
accordance with Section estimate but shall not -under PAS 38, only
11 exceed 10 years intangible assets w ith
-Intangible assets are -review only if there are finite lifeare amortized
carried at cost less any indicators that there -PAS 16and PAS 3,
accumulated have been changes review atleast at eah
amortization and any financial year-end
accumulated
impairment losses (cost
model)
15 - Leases -operating and finance -lessee classifes a lease -PFRS 16, recognizing a
lease into a finance lease or right of use asset and
an operatimg lease and lease liablity
account them
accordingly
16 - Provisions and -there are no significant
contingencies differences between
PFRS for SMEs and full
PFRS with respect to
provisions and
contingencies
17- Revenue -the PFRS for SMEs and -simpler principle of -application of five-step
the full PFRS contain “transfer of risk and principle
nearly identical rewards”
requirements for
definitions,
measurement, purchase
costs, conversion costs,
other costs, and cost
formulas for
inventories.
18 - Government Non - monetary -recognize monetary -PAS 20, classified as
grants government grants. government grants either grant related to
-Government -does not impose asset or grant related to
assistance. specified furure income
-Repayment of performance conditions -recognized in income
government grants. on the recipient is over the periods
recognized in income neccessary to match it
when the grant with related costs for
proceeds are intended compensate
receivable, also that -systematic basis
imposes specified
future perforance
-grants received before
the revenue recognition
criteria
19 - Borrowing costs -all are recognized as -PAS 23, directly
expense in the period arributable to the
they are incurred acquisition,
construction or
production of qualifying
asset
-other borrowing costs
are expensed
20 - Share-based -a transaction in which -under PFRS for SMEs, -under full PFRS, the
payments the entity receives the share options must share options shall be
goods or services either be measured at fair measured at fair value
as consideratio n for its value on the date of on the date of grant.
equity instruments or grant. -However, if the fair
by incurring liabilities -the intrinsic value of value of the share
for amounts based on share option is not options cannot be
the price of the entity's mentioned as an measured reliably, the
shares or other equity alternative intrinsic value of the
instruments of the share options is used
entity
21 - Impairment of -full PFRS and PFRS for -PFRS for SMEs, assets, -under full PFRS, assets
assets SMEs are practically the including goodwill, are with a finite useful life
same with respect to tested for impairment are tested for
the following: when there is an impairment when there
a. Recogniti on and indication that the asset is an indication that the
measure ment of may be impaired asset may be impaired.
impairme nt loss
b. Definition of fair
value lesscost of
disposal value in use
c. Internal and external
indicators of
impairment
d. Reversal of
impairment
22 - Employee -benefits Full PFRS and - immediate recognition - actuarial gains or
benefits PFRS for SMEs share the and splits the expense losses can be
same principles for the into different recognized immediately
recognition and components or amortized into profit
measuremen t of the - circumstance-driven or loss
following: approach is applicable - use of an accrued
a. ) Shortterm - accrued benefit benefit valuation
employee benefits valuation method method
b. b.) Defined - future service or
contribution plans possible mortality
c. c.) Other long -term during an employee’s
employee benefits period of service are
d.) Termination benefits not considered
 Full PFRS and PFRS for
SMEs also share many
of the principles for the
recognition and
measuremen t of
defined benefit plans
23 - Income tax - net carrying amount of - recognizes the effect -deferred tax asset is
deferred tax asset of the possible only recognized to the
outcomes of a review extent that it is
by the tax authorities probable
- valuation allowance is -no specific guidance on
recognized uncertain tax positions
- no probable -record the liability
recognition threshold measured as either a
single best estimate or
a weighted average
probability
24 - Events after -events after reporting -non-adjustingevent -non-adjustingevent
reporting period period The PFRS for and disclosed only but and disclosed only
SMEs and full PFRS are the entity has an option
the same in the matter of presenting dividend
of presenting the notes as segregrated
to financial statements. component of retained
earnings

25 - Related party -the PFRS for SMEs and -disclose key -PAS 24, required to
transactions full PFRS share the management personnel disclose key
same provisions compensation in total management
-the PFRS for SMEs and only compensation in total
full PFRS share the
same principleswith
respect to related party
disclosures.
26 - Hyperinflation -PFRS for SMEs and full -the gain or loss on the -same as IFRS for SMEs.
PFRS are the same in all net monetary position [IAS 29.3] • Same as
aspects of accounting is included in profit or IFRS for SMEs. [IAS 29.8,
for an entity whose loss and separately 29.9]
functional currency is disclosed
the currency of
hyperinflationary
economy
27 - Specialized -Specialized Activities -if an entity’s -under full PFRS, an
activities Hyperinflatio n PFRS for accounting policy entity must develop its
SMEs and full PFRS results in the own policy for
practically have the recognition of an recognition of an
same principles for the exploration and exploration and
recognition and evaluation asset, such evaluation asset.
 measuremen t of
biological assets and
agricultural produce
28 - Agriculture and -Biological asset: a living
biological assets animal or plant.
-Agricultural produce:
the harvested product
of biological assets
asset shall be measured
initially at cost
-bearer plants have no -bearer plants are
equivalent provision excluded from the
-fair value through scope of PAS 41
profit loss model -classified as PPE under
-cost less accumulated PAS 16
depreciation and -biological assers
impairment measured at fair value
less cost to sell
-rebuttable
presumption
-cost less accumulated
depreciation less
accumulated
impairment losses