PFRS FOR SMES OR SES Flashcards
What is the total amount of assets and total liabilities of an SME, according to SEC?
Assets: P3M to P350M
Liabilities: P3M to P250M
What is the total amount of assets and total liabilities of an SE, according to SEC?
Assets: P3M to P100M
Liabilities: P3M to P100M
An SME is not required to file financial statements and is not in the process of filing its financial statements for the purpose of issuing any class of instruments in the public market. True or False?
TRUE
A holder of a secondary license issued by a regulatory agency can be an SME. True or False?
FALSE
A public utility can be an SME.
FALSE
Spot the difference:
Basic Financial Statement
A single statement of income and retained earnings is not permitted under full PFRS, but permitted under PFRS for SMEs.
PFRS for SMEs requires an explicit and unreserved statement of compliance.
Spot the difference:
Statement of Financial Position
Full PFRS requires presentation of investment in associate, but not investment in joint ventures, unlike PFRS for SMEs which requires presentation of both investment in associates and investment in joint ventures.
PFRS for SMEs is not required to present:
- total assets classified as held for sale
- total of liabilities included in disposal group classified as held for sale
PFRS for SMEs includes a separate line item investment property carried at cost less accumulated depreciation and impairment.
Spot the difference:
Notes to Financial Statements
Full PFRS contains around 3,000 potential disclosures. PFRS for SMEs has around 300 disclosures.
Notes to FS under Full IFRS require the disclosure of segment information, earnings per share, and interim financial statements. IFRS for SMEs do not.
Spot the difference;
Inventories
Under Full PFRS, the loss on inventory writedown is a component of COGS, not an impairment loss.
Under PFRS for SMEs, the excess of the carrying amount over the selling price less costs to complete and dispose shall be recognized as IMPAIRMENT LOSS
Spot the difference:
Investment in associates and joint ventures
Full PFRS requires presentation of investment in associates, but not investment in joint ventures.
PFRS for SMEs requires presentation of both investment in associates and investment in joint ventures.
Spot the difference:
Investment in associates
Full PFRS requires the use of equity method of accounting only.
PFRS for SMEs provides the option to account for investments at: (1) cost, (2) under the equity method, (3) at FVPL
Spot the difference:
Investment Property
Full PFRS provides the option to measure asset at: (1) cost-depreciation-impairment model or (2) FV model.
PFRS for SMEs requires that investment property is accounted at FV, unless impracticable.
Tract of land held for an undetermined use is classified as investment property under Full PFRS. PFRS for SMEs does not specify.
Spot the difference:
Government grant
Full PFRS recognizes a government grant when there is reasonable assurance that the entity will comply with the specified conditions. PFRS for SMEs recognizes the government grant when conditions are actually satisfied.
Full PFRS recognizes government grant as income over the periods necessary to match the grant with the related expense or cost. PFRS for SMEs does not allow an entity to match the grant with the related expense or cost.
Full PFRS allows that a grant related to an asset is treated either as deferred income or a reduction in the cost of the asset. There is no such option in SMEs.
Spot the difference:
Borrowing costs
Under Full PFRS, borrowing costs directly attributable to acquisition, construction, or production of a qualifying asset are capitalized. Under PFRS for SMEs, all borrowing costs are expensed.
Spot the difference:
Intangible assets other than goodwill
Under Full PFRS, development costs are capitalized where the six specific criteria are met. Under PFRS for SMEs, expenditures incurred internally on an intangible item, including all research and development costs, are expensed.
Full PFRS provides the option to measure asset at: (1) the cost model and (2) revaluation model. PFRS for SMEs requires the subsequent measurement of capitalized intangible assets using the cost model at cost less accumulated amortization and impairment losses.
Under Full PFRS, the life of intangible assets could either be finite or infinite. An intangible asset with infinite life is not amortized, but impairment testing is required annually and whenever an indicator of impairment exists.
Under PFRS for SMEs, all intangible assets are considered to have a finite life. Hence, all intangible assets are amortized. Intangible assets are not tested annually but are tested for impairment, when there is an indication of impairment.
