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    Chapter 1 PFRS 1 Answer

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    03LJ
    The document discusses key aspects of first-time adoption of Philippine Financial Reporting Standards (PFRS). It defines a first-time adopter as an entity presenting its first PFRS financial statements. An opening PFRS statement of financial position is prepared that serves as the starting point for accounting under PFRS. The date of transition is the beginning of the earliest period presented in the first PFRS financial statements. A first-time adopter recognizes all assets and liabilities under PFRS and makes any required reclassifications or remeasurements.

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    Chapter 1 PFRS 1 Answer

    Uploaded by

    03LJ
    2K views1 page
    The document discusses key aspects of first-time adoption of Philippine Financial Reporting Standards (PFRS). It defines a first-time adopter as an entity presenting its first PFRS financial statements. An opening PFRS statement of financial position is prepared that serves as the starting point for accounting under PFRS. The date of transition is the beginning of the earliest period presented in the first PFRS financial statements. A first-time adopter recognizes all assets and liabilities under PFRS and makes any required reclassifications or remeasurements.

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    Chapter-1-PFRS-1-Answer

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    The document discusses key aspects of first-time adoption of Philippine Financial Reporting Standards (PFRS). It defines a first-time adopter as an entity presenting its first PFRS financial statements. An opening PFRS statement of financial position is prepared that serves as the starting point for accounting under PFRS. The date of transition is the beginning of the earliest period presented in the first PFRS financial statements. A first-time adopter recognizes all assets and liabilities under PFRS and makes any required reclassifications or remeasurements.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    2K views1 page

    Chapter 1 PFRS 1 Answer

    Uploaded by

    03LJ
    The document discusses key aspects of first-time adoption of Philippine Financial Reporting Standards (PFRS). It defines a first-time adopter as an entity presenting its first PFRS financial statements. An opening PFRS statement of financial position is prepared that serves as the starting point for accounting under PFRS. The date of transition is the beginning of the earliest period presented in the first PFRS financial statements. A first-time adopter recognizes all assets and liabilities under PFRS and makes any required reclassifications or remeasurements.

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    © All Rights Reserved
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    of 1

    CHAPTER 1

    FIRST-TIME ADOPTION OF PHILIPPINE FINANCIAL REPORTING STANDARDS

    Guide Questions:

    1. Define first time adopter.


    - An entity presenting its first PFRS financial statements.

    2. Define first PFRS financial statements.


    - First PFRS financial statements are “the first annual financial statements in which an entity adopts
    PFRSs, by an explicit and unreserved statement of compliance with PFRSs.

    3. What are the conditions in order that financial statements presented by an entity would qualify as first PFRS
    financial statements?
    - Financial statements are considered “First PFRS financial statements” if the previous financial
    statements:
     were prepared in accordance with other reporting standards not consistent with the PFRSs; or
     did not contain an explicit and unreserved statement of compliance with PFRSs; or
     contained an explicit and unreserved statement of compliance with some, but not all, PFRSs; or
     were prepared using some, but not all, applicable PFRSs; or
     prepared in accordance with PFRSs but were used for internal reporting purposes only; or
     did not contain a complete set of financial statements as required under PAS 1 Presentation of
    Financial Statements.
     The entity did not present financial statements in previous periods.

    4. Explain the date of transition to PFRS.


    - The date to transition to PFRS is the beginning of the earliest period for which an entity presents full
    comparative information under PFRSs in its first PFRS financial statements.

    5. Define an opening PFRS statement of financial position.


    - It is prepared and presented by an entity at the end of the date of transition to PFRSs. This is the
    starting point for its accounting in accordance with PFRSs.

    6. What are the requirements in preparing an opening PFRS statement of financial position?
    - PFRS 1 requires an entity to do the following in its opening PFRS statement of financial position:
     Recognize all asset and liabilities whose recognition is required by PFRSs;
     Not recognized under previous GAAP that have different classification under PFRSs; and
     Reclassify items recognized under previous GAAP that have different classification under PFRSs;
    and
     Apply PFRSs in measuring all recognized assets and liabilities.

    7. How should a first time adopter recognize the adjustments required to present an opening PFRS statement of
    financial position?
    - Adjustments required:
     All of the adjustments should be recognized in profit or loss.
     Adjustments that are capital in nature should be recognized in retained earnings and
    adjustments that are revenue in nature should be recognized in profit or loss.
     Current adjustments should be recognized in profit or loss and noncurrent adjustments should
    be recognized in retained earnings.
     All of the adjustments should be recognized directly in retained earnings or, if appropriate, in
    another category of equity.

    8. What are the first PFRS financial statements prepared by a first time adopter?
    - Statement of Compliance – These are the Company’s first financial statements prepared in
    accordance with PFRSs and PFRS 1 First-time Adoption of Philippine Financial Reporting Standards
    has been applied.

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