Republic of the Philippines
Securities and Exchange Commission

Financial Reporting Bulletin

Bulletin No.

Subject Matter




Micro Entities

(1)   Under SEC's Notice of Implementation Guidelines on PFRS for SMEs dated February 9, 2010, micro entities have the option to use any of these bases of accounting in the preparation of their financial statements: (a) full PFRS, (b) PFRS for SMEs, or (c) another acceptable basis of accounting.


Under Part I (2)(A)(iii) of the Rule, micro entities have the option to use as their financial reporting framework the income tax basis, accounting standards in effect as of December 31, 2004 or PFRS for SMEs. 


Micro entities which have previously adopted full PFRSs in accordance with SEC’s Notice of Implementation Guidelines on PFRS for SMEs dated February 9, 2010 are allowed to continue the use of full PFRS. Nevertheless, micro entities may also choose to change their financial reporting framework to one of the options made available under the Rule.  Such change should be accounted for in accordance with PAS 8, Accounting Policies, Changes in Accounting Estimates and Errors.


(2)   Micro entities are not required to disclose in the notes to the financial statements their rationale for choosing a particular financial reporting framework available to them.


(3)   Micro entities that continue to use full PFRS are not required to file the tabular schedule of all the effective standards and interpretations under the PFRS as of year-end as required under Part I (4)(J) of the Rule.


Financial Reporting Bulletins (PDF) (as of 10 April 2012)                             


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