CFAS

I. RA 9298 — PHILIPPINE ACCOUNTANCY ACT OF 2004

RA 9298 regulates the practice of accountancy in the Philippines, including accounting education, the CPA licensure examination, and professional practice. It repealed PD 692 (Revised Accountancy Law).

Purpose

Education

Examination

Practice

Regulatory Bodies

PRC – Professional Regulation Commission

BOA – Board of Accountancy

Memory: PRC = Professional Regulation | BOA = Accountancy Regulation

Areas of Accountancy Practice

P-C-E-G

Public Practice

Commerce and Industry

Education

Government

CPA

CPA = Certified Public Accountant

A CPA must meet legal requirements, pass the licensure examination, and follow professional and ethical standards.

CPA Licensure Examination

Administered by the BOA under the PRC.

CPD

CPD = Continuing Professional Development

Helps CPAs maintain and improve their professional knowledge and skills.

Previous Law

PD 692 – previous Revised Accountancy Law; repealed by RA 9298.

II. CONCEPTUAL FRAMEWORK IN CFAS

Conceptual Framework – principles that guide the preparation and presentation of financial statements and help develop consistent accounting standards.

Objective of Financial Reporting

To provide useful financial information to investors, lenders, and other creditors for decision-making.

Qualitative Characteristics

Fundamental Characteristics – R + F

Relevance – can influence decisions.

Faithful Representation – accurately represents the economic substance.

Enhancing Characteristics – C + V + T + U

Comparability – allows comparison between entities or periods.

Verifiability – can be checked or confirmed.

Timeliness – available when needed.

Understandability – clear and understandable.

Elements of Financial Statements

Element

Meaning

Asset

Economic resource controlled by the entity

Liability

Present obligation to transfer an economic resource

Equity

Assets minus liabilities

Income

Increases in assets or decreases in liabilities that increase equity

Expenses

Decreases in assets or increases in liabilities that decrease equity

Recognition

Recognition – including an item in the financial statements when it meets the definition of an element and provides useful information.

Measurement

Measurement – determining the monetary amount of an item for inclusion in the financial statements.

Common bases:

Historical Cost

Current Value

III. QUICK REVIEW / MUST MEMORIZE

RA 9298 → Philippine Accountancy Act of 2004

PRC + BOA → Regulatory bodies

CPA → Certified Public Accountant

P-C-E-G → Public Practice, Commerce & Industry, Education, Government

CPD → Continuing Professional Development

PD 692 → Previous law repealed by RA 9298

Fundamental: R + F → Relevance + Faithful Representation

Enhancing: C + V + T + U → Comparability + Verifiability + Timeliness + Understandability

Elemen

ts: A + L + E + I + E → Assets + Liabilities + Equity + Income + Expenses