The Cooperative Development Authority (CDA) has released last September 15, 2015 Memorandum Circular No. 6-2015 or the “Philippine Financial Reporting Framework for Cooperatives.”
The Circular provided that due to the uniqueness and peculiarities of cooperatives, the the CDA prescribed the comprehensive financial reporting framework that will address the needs of the users of the cooperatives’ financial statements.
The Circular further provided that “cooperatives cannot strictly follow the PFRS for the reason that Republic Act No. 9520, otherwise known as the Philippine Cooperative Code of 2008, specifically provides for treatment of certain accounts which are unique only to cooperatives and such peculiarities are in accord with universally-accepted cooperative principles. As a consequence, cooperative external auditors are left with no option but to render, at times, qualified opinion because the cooperatives could not comply with the PFRS. As a matter of fact, other cooperative external auditors express varied opinions on the presentation of the audited financial statements of cooperatives ranging from unmodified, qualified, adverse and disclaimer of opinion on the items presented in the financial statements.”
It is indicated in the Circular that the Financial Reporting Framework for Cooperatives was developed from the Philippine Financial Reporting Standards for Small and Medium-Sized Enterprises and that modifications were made on several provisions of the standards taking into considerations cooperative laws, rules, regulations and principles.
“The current Board has not been consulted in the promulgation of this Circular. Thus, we are not able yet to comment on how this will affect our accounting standards that CPAs will use in reporting transactions of cooperatives. Under the Accountancy Law, the Board has the responsibility to prescribe the accounting standards that will be used by CPAs. We will coordinate with the CDA in addressing this issue and other concerns,” Chairman Joel Tan-Torres.
The Philippine Financial Reporting Framework for Cooperatives can be downloaded here.
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