SMALL & MEDIUM-SIZED ENTITIES (PFRS for SMEs)

**DEFINITION SIZE Transition

First adoption of SME PFRS *from SME to Full PFRS/other acctg. basis
No *Public Accountability AND Publish general purpose financial
statements for external users. > Transition date: > To FULL PFRS:
Beginning of the earliest period - if the entity exceeds the ceiling threshold
Unlisted Entities Non-financial institution PFRS SEC for which FS is prepared in comformity
With PFRS for SMEs for the first time.
*Public Accountability not provided SME Microbusiness > To other acceptable acctg. basis:
ASSETS: P3M to P350M Asset/Liab: - if the floor threshold is breached.
- w/ debt of equity securities - holds asset in fiduciary OR Below P3 Million Example:
traded in a public market or capacity for a broad group LIAB: P3M to P250M FS ending Dec.31, 2020
it is in the process of issuing of outsiders as one of its Option for → Transition date is Jan. 1, 2020. > When to transition?
such instruments for trading in primary business. *Under SEC public FS prepration: The entity shall be required to transition
public market. utility is not an SME, a. Full PFRS in the next year.
regardless of size b. PFRS for SMEs
c. Other acceptable *The transition must be made if the event
basis of acctg. that caused the change is considered
“significant and continuing” – as a
general rule, 20% or more of total asset
or liabilities.

RETROSPECTIVE APPLICATION
- Thus adjustments shall be
recognized directly to
retained earnings or
another component of
SHE.
➢ EXCEPTION to restatements:
- In general, if impractible.

- No restatements/adjustments for:
a. Derecognition of fin’l assets & fin’l liab.
b. Hedge accounting
c. Accounting estimates
d. Discontinued operations
e. Measuring noncontrolling interest
FOR READING:
Exemptions from PFRS for SMEs