Example of Financial Statements Prepared Under PFRS for SMEs

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Small and Medium-sized Entities (SMEs) are widespread in the Philippines.  According to the DTI-NCR, SMEs comprises of 99.6% (in number) of the Philippine enterprise.  It’s inevitable, therefore, that there are many companies reporting under Philippine Financial Reporting Standards for Small and Medium-sized Entities (PFRS for SMEs).

In accounting parlance, SMEs are those entities that have P3 million to P350 million assets and or P3 million to P250 million liabilities, athough these are not the exclusive criteria.  You can read more of the criteria in the PFRS for SMEs page, Click Here!  PFRS for SMEs is the accounting standards applicable for entities qualifying as SMEs as defined by the SRC Rule 68, As Amended, unless exempted.  To read about there exemptions please go to our page on Exemption, Click Here!

PFRS for SMEs was adopted by the Securities and Exchange Commission on December 3, 2009.  The PFRS for SMEs is effective for annual periods beginning on or after January 1, 2010, except certain provisions in Section 24, applicable for construction contracts which is effective January 1, 2012.  We want to clarify that the PFRS for SMEs is adopted from the IFRS for SMEs are that there were no difference in the provisions.

Click the links below to download the PFRS for SMEs and the Basis for Conclusion:

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Entities qualifying to apply for PFRS for SMEs will get loss without an illustration on how are the provisions applied and what matters are need to disclosed.  Although the PFRS for SMEs in itself already contains almost all the information we need, it is so much inconvenient to go through the thick standard.  That is why we have this IFRS for SMEs Illutrative Financial Statements and Disclosures Checklist.  As the title suggests, the content of this file is an example of a financial statements prepared under PFRS for SMEs and a checklist of all required disclosures.  To get a copy of the illustrative PFRS financial statements and disclosure checklist, click the link below:

As mentioned earlier, the content of IFRS for SMEs is the same as the PFRS for SMEs, except of course to the matters required to be disclosed or presented by some local regulations.  Therefore, some matters required by the SRC Rule 68, As Amended, including the Financial Reporting Bulletins issued to clarify provisions of SRC Rule 68, As Amended may have to be considered in the preparation of the PFRS for SMEs financial statements.

Some information required by the by the Bureau of Internal Revenue are likewise not considered in the illustrative PFRS for SMEs financial statements, such as the Supplementary Information Required Under RR 19-2011 and 15-2010.

In other words, we have the guidance and example on how to prepare PFRS for SMEs financial statements but we also have to consider the local regulations in assessing the completeness of disclosures.  If you are in doubt, you can always consult your professional accountants and auditors.

If you want to see other examples, we have seen this Illustrative Corporate Consolidated Financial Statements for PFRS for SMEs courtesy of Isla Lipana & Co, Click Here.

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Disclaimer: Opinions expressed in this article are that of the author and information provided are for general conceptual guidance for public information and are not substitute for expert advice. Contact support@philcpa.org for more information and if you want to avail professional services. Find us on Facebook!



Orlando Calundan is a CPA who has exposures in FS audit of entities in various industries such as real estate, food/restaurants, manufacturing, service organizations and BPOs, automotive, holding/investment companies and more. He also has exposure on internal audit engagements.

  • lea

    hi! does this apply also to businesses that are NOT corporations but have assets that are more than P3M, such as businesses that are put up as sole proprietorships?

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