Adoption of Philippine Financial Reporting Standards (PFRSs) and Philippine Interpretations Committee Questions and Answers (PIC Q&As)

January 25, 2024 SEC MEMORANDUM CIRCULAR NO. 1, S. 2024 SUBJECT : Adoption of Philippine Financial Reporting Standards (PFRSs) and Philippine Interpretations Committee Questions and Answers (PIC Q&As) The Commission, in its meeting held on January 25, 2024, approved the adoption of the following pronouncements as part of SEC's rules and regulations on financial reporting: acEHCD Pronouncement Effectivity date 1. Amendments to PFRS 9 Financial Instruments, PAS 39 Financial Instruments: Recognition and Measurement, PFRS 7 Financial Instruments: Disclosures, PFRS 4 Insurance Contracts and PFRS 16 Leases, Interest Rate Benchmark Reform Phase 2 Effective for annual period beginning on or after January 1, 2021 2. Amendments to PFRS 16, Lease Liability in a Sale and Leaseback Effective for annual period beginning on or after January 1, 2024 3. Amendments to PAS 1, Non-current Liabilities with Covenants Effective for annual period beginning on or after January 1, 2024 4. Amendments to PAS 12, International Tax Reform-Pillar Two Model Rules Effective for annual period beginning on or after January 1, 2023 5. Amendments to PAS 7 and PFRS 7, Supplier Finance Arrangements Effective for annual period beginning on or after January 1, 2024 6. Amendments to PAS 21, Lack of Exchangeability Effective for annual period beginning on or after January 1, 2025 7. Amendments to the PFRS for SMEs Standard, International Tax Reform Pillar Two Model Rules Effective for annual period beginning on or after January 1, 2023 8. PIC Q&A No. 2022-01: Use of Going Concern Basis by an Absorbed Entity in a Merger Transaction Effective upon approval by the FSRSC. Published in the Official Gazette and effective on May 22, 2022. 9. PIC Q&A No. 2022-02: Amendment to PAS 1 Accounting Policy Disclosures Effective upon approval by the FSRSC. Published in the Official Gazette and effective on May 22, 2022. 10. PIC Q&A No. 2022-03: Conforming Changes to PIC Q&As Cycle 2022 Effective for annual period beginning on or after January 1, 2022. 11. PIC Compilation of Q&As as of June 30, 2022 This is just a compilation of PIC Q&As and each PIC Q&A has an indicated effective date. 12. PIC Guidance on Financial Reporting as of June 30, 2022 This publication provides guidance on recurring financial reporting issues, the effective date of which is derived from the related PFRS. 13. PIC Q&A No. 2022-04: PFRS 9 Business Model Assessment Practical Issues Effective upon approval of FSRSC, to be applied retrospectively. Published in the Official Gazette and effective on March 29, 2023 14. PIC Q&A No. 2022-05: Accounting by a Representative Office of Remittances from its Foreign Head Office Effective for annual periods beginning on or after January 1, 2022. 15. PIC Q&A No. 2019-01 (Amended August 2022): Accounting for service charges under PFRS 15, Revenue from Contracts with Customers Effective for annual periods beginning on or after August 7, 2019, the effectivity date of the RA No. 11360. 16. PIC Q&A No. 2023-01: Conforming Changes to PIC Q&As Cycle 2023 Effective for annual period beginning on or after January 1, 2023. 17. Compilation of PIC Q&As as of June 30, 2023 This is just a compilation of PIC Q&As and each PIC Q&A has an indicated effective date. 18. PIC Guidance on Financial Reporting as of June 30, 2023 This publication provides guidance on recurring financial reporting issues, the effective date of which is derived from the related PFRS. 19. Philippine Interpretations Committee (PIC) Q&A No. 2023-02 Certain topics under PFRS 17, Insurance Contracts Effective upon approval of FSRSC. Published in the Official Gazette and effective on October 8, 2023. The foregoing pronouncements have been adopted by the Financial and Sustainability Reporting Standards Council and approved by the Board of Accountancy and Professional Regulation Commission and published in the Official Gazette. EcTCAD Issued this 25th day of January 2024 at Makati City. For the Commission: (SGD.) EMILIO B. AQUINO Chairman