PFRS in accounting refers to Philippine Financial Reporting Standards, which are the accounting principles used in the Philippines to govern how companies prepare their financial statements.
These standards are closely based on the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB). The goal of adopting PFRS is to ensure that financial statements are transparent, comparable, and reliable, allowing investors and other stakeholders to make informed decisions.
Here's a breakdown of key aspects:
- Foundation: PFRS are patterned after IFRS, promoting global consistency in financial reporting.
- Purpose: To provide a standardized framework for preparing and presenting financial statements.
- Benefits:
- Enhanced transparency in financial reporting.
- Improved comparability of financial statements across companies and industries (especially across countries).
- Increased credibility and reliability of financial information.
- Issuance: PFRS are issued by the Financial Reporting Standards Council (FRSC) in the Philippines, which closely monitors and adopts changes to IFRS.
In essence, PFRS ensures that companies in the Philippines adhere to a recognized set of accounting rules, facilitating accurate and understandable financial reporting.
