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Amazon glam for winter


ALL THIS rain is making me think about winter — winter wear that is. When else would you be able to wear your long coats and boots without attracting too much attention in the tropical heat?
With the rain, though, comes a battle, and every woman trudging along to get to work and her other preoccupations has to worry about, well, first off, getting there safely. A woman clad in Longchamp, may be saved from this worry, but then you’ll have to step out of the car looking good, right? Who else should the modern fighting woman turn to but the Amazons, the fierce female warriors of Greek legend? This was the one of the inspirations behind Longchamp’s Fall/Winter 2018 line, which BusinessWorld saw in a preview in Makati last week.
I must say that we’re particularly amused by the Amazons line, which features satchel-like bags with a combination chain-leather strap, chanelling a bit of the warrior look, especially in a sweet little python print executed in calfskin.
The petite Mademoiselle Longchamp gets an angrier update, in bolder, richer colors such as plum, with metallic detailing. A casual tote is also available, printed with large versions of the Longchamp racehorse logo.
As for the brand’s modern classic Le Pliage, it’s given new life with butterflies and bouquets — even tough girls have to have fun. — JLG

Flat glass maker defers P5-B investment on import threat

By Janina C. Lim, Reporter
TQMP Glass Manufacturing Corp., the country’s lone flat glass maker, is deferring a P5-billion expansion plan due to the lack of standardization rules and monitoring of imported goods that are increasingly flooding and hurting the domestic market.
“Were planning to put up a new furnace [but] with dissipation nag-aalinlangan rin kami (we’re still hesitating),” Paul Vincent C. Go, president of the Valenzuela City-based TQMP, told reporters in a media briefing last Friday in Pasay City.
The planned investment is bigger than the P3.5-billion it spent in putting up its current facilities. The proposed facility will hire 1,000 direct employees and generate 1,000 to 2,000 indirect employment.
TQMP manufactures flat glass through its recently acquired subsidiary Pioneer Float Glass Manufacturing Inc., which is formerly AGC Asahi Glass and owned by Japan-based AGC Asahi Glass Ltd., a world leader in producing glass, chemicals and high-tech materials. The acquisition closed early this year.
Asked why the firm failed to factor in the problem during due diligence, Mr. Go said the external factor, stemming from the government’s side, was difficult to detect.
TQMP blamed the government’s move in 2015 to exempt flat glass, among other products, from securing certification from the Bureau of Product Standards (BPS). Flat glass is commonly used for windows and doors in houses, buildings and automotive.
Administrative Order No. 15-01 Series of 2015 of the Department of Trade and Industry, to which the BPS is attached, said the move was meant “to fast-track the processing” of applications for import commodity clearances, which saw “significant increases” during that time.
As of April 2018, the BPS deemed 85 products as life-threatening and, hence, are enlisted for mandatory certification.
Shipments of products covered in the list are inspected by the Bureau of Customs, which obtains samples from import shipments for testing and certification.
Those not in the list are allowed to self-declare their labeling, which may be subject to BPS validation.
Citing internal reports, Mr. Go said the 2015 rule allowed the misdeclaration of shipments and barred the local manufacturer from obtaining precise data on the movement of supply in the flat glass market.
“Some are declaring as table wares, some as furniture. Puro technical ginagawa nila kaya nahihirapan din tayo (They’re doing technical barriers and we are having difficulty),” Mr. Go said.
Nonito B. Galpa, executive vice-president of Pioneer Float Glass Manufacturing, Inc. said generic importers label the thickness of their flat glass products below the industry’s nominal thickness standard, making them susceptible to easy breakage and a threat to the safety of users.
“Hindi kami naniniwala na hindi ito life-threatening (We don’t believe that these are not life-threatening),” Mr. Galpa said.
“They’re declaring a thickness [that is] not within the Philippine standard,” he said, describing the practice as scary because it leaves consumers without protection of the strength of the glass.
Mr. Galpa, also the vice-president of the Flat Glass Alliance of the Philippines, Inc., said imports surged after the new rule.
TQMP said the market share of local produce declined to about 40-50% from the 80% it used to enjoy before the imposition of DAO 2015. The firm currently produces 15,000 tons of flat glass a month.
Mr. Go said expansion plans were meant to fill in the country’s increasing demand for flat glass, currently pegged at 26,000 tons a month. The addition of the planned facility is expected to nearly triple the plant’s capacity at 42,000 tons a month.
However, the company official said the group has also been exporting, seeing that cheap imports are increasingly dominating to satiate local demand. TMPQ faces standard-regulating barriers, making it a challenge to penetrate foreign markets.
Of its current output, about 30-40% are allocated for export destinations such as Korea, Nigeria and Malaysia.
The company has sought an audience with the Department of Trade and Industry, which has turned over the industry’s concern to the BPS to hold another review.
“We’re not against the importation,” Mr. Galpa said, adding that the imported goods should be at par with locally made flat glass.

Shares expected to climb as focus turns to SONA

By Arra B. Francia, Reporter
LOCAL SHARES may move up this week as investors anticipate the president’s state of the nation address (SONA) on Monday.
The benchmark Philippine Stock Exchange index (PSEi) went up 0.15% or 11.74 points to close at 7,399.61 on Friday, staying flat from a week ago with a 0.01% increase.
The property sector’s 1.2% gain and industrials’ 0.82% uptick failed to offset the decrease in holding firms, which gave up 1.83% for the week. Turnover remained thin, dropping by 37% to P3.4 billion on average.
“Gauges turned relatively unchanged during the week, with sessions limited within 7,334-7,459. Activity was light with MOC (market on close)-boost mostly prevalent, ahead of Pres. Duterte’s SONA [this] week,” online brokerage firm 2TradeAsia.com said in a weekly market note.
Analysts are banking on what President Rodrigo R. Duterte will be saying during his third SONA on Monday, where he is expected to deliver a report on his administration’s accomplishments and plans moving forward.
“The president will be giving his state of the nation address on Monday which may give investors the assurance that they have been longing for. This event may turn out to be the catalyst to get investors back into this market,” Eagle Equities, Inc. Research Head Christopher John Mangun said in a market report.
2TradeAsia.com said stock investors will likely focus on the next phase of the tax reform program, especially to changes on corporate taxes, the retention or removal of fiscal incentives and provisions on renewable energy.
Extra attention will also be given to updates on the government’s flagship infrastructure program called “Build, Build, Build” as well as the Duterte administration’s stance on the country’s territorial dispute with China.
“Specifically, investors would like to see if the key direction hasn’t changed or may divert in light of the initial phase of the tax reform plan’s impact on inflation. This will be crucial to listed companies’ capex rollout, including timing of budget preparation for large-ticket infra undertakings. As such, any hint to affirm this year’s growth prospects could invigorate appetite for equities, especially if these would lead to increased direct investments & job creation,” the online brokerage said.
Should the president’s report fail to uplift market sentiment, Eagle Equities’ Mr. Mangun said the main index may continue moving sideways and retain its low trading volume instead.
At the same time, 2TradeAsia.com said investors are also looking forward to the release of second-quarter corporate earnings. It noted that with the recent outflow of foreign funds from the local market, foreigners may be positioning themselves and are “merely waiting for opportunities to move in.”
Eagle Equities’ Mr. Mangun said support is from 7,340 to 7,185, while the resistance to overcome is 7,450 to 7,500.

Yields on gov’t debt end flat

By Mark T. Amoguis, Researcher
BOND YIELDS moved sideways last week amid auction results, the affirmation of the country’s credit rating and hawkish statements from the Bangko Sentral ng Pilipinas (BSP).
On average, government securities’ (GS) yields — which move opposite to prices — went down by 1.19 basis points (bp), data from the Philippine Dealing & Exchange Corp. as of July 20 showed.
“GS rates dipped ever so slightly as traders scrambled to place funds in the secondary market after the rejection of the seven-year [bond] auction and the partial T-bill (Treasury bill) award,” a bond trader interviewed last Friday said.
“Client-driven deals were the focus with institutional players mindful of the BSP’s hawkish commentary as Governor Nestor A. Espenilla, Jr. pledged a decisive strike come August,” the trader added.
The government decided to borrow just P12.101 billion out of the planned P15-billion at the T-bills auction last Monday.
Broken down, the Bureau of the Treasury (BTr) raised P4 billion worth of 91-day papers as planned, P3.424 billion worth of 182-day debt (falling short of a P5-billion program), and P4.677 billion worth of 364-day notes (out of P6 billion).
Meanwhile, the BTr rejected all bids for its offer of P15-billion reissued seven-year Treasury bonds (T-bonds) with a remaining life of six years and eight months last Tuesday as investors demanded higher rates ahead of the August policy meeting of the central bank.
The BSP chief signalled last Friday that the central bank is considering a “strong” monetary policy action at its meeting next month to temper rising inflation.
Inflation hit a fresh five-year high of 5.2% in June. This brought the year-to-date average to 4.3%, already beyond the 2-4% central bank target.
The central bank’s policy-setting Monetary Board tightened rates through two 25-bp increases in its May and June meeting, bringing benchmark rates to a 3-4% range.
Michael L. Ricafort, economist at the Rizal Commercial Banking Corp. (RCBC), said yields on government bonds “corrected lower [last] week after global crude oil prices eased to new three-week lows, amid expectations that the risk of trade war involving the US, China, EU, Canada, and other developed countries could lead to slower global economic growth and slower inflation…”
This, in turn, “could lead to less Fed rate hike/s going forward, despite the fact that US Federal Reserve Chairman Jerome Powell reiterated gradual Fed rate hikes for now,” he explained.
“Local yields also eased after Fitch Ratings reiterated the country’s credit ratings and after some members of the country’s economic team reiterated commitment to further pursue additional tax reform measures,” Mr. Ricafort added.
Last week, Fitch Ratings affirmed the country’s “BBB” rating — a notch above minimum investment grade — with a “stable” outlook amid “favorable” growth outlook despite “overheating risks,” such as rising inflation, rapid credit growth, and widening trade deficit.
Moody’s Investors Service likewise affirmed its “Baa2” rating on the country — also one notch above minimum investment grade — and “stable” outlook, citing the economy’s overall strength, even as it flagged risks from rising inflation and the planned shift in government form.
At the secondary market last Friday, the short end of the curve ended mixed after the yield on the 91-day T-bill dropped 2.25 bps to 3.2552%, while the six-month and one-year T-bills gained 34.98 bps and 6.61 bps, respectively, to yield 4.3583% and 4.6988%.
In the belly, yields on the two-, five- and seven-year T-bonds shed 23.89 bps, 31.71 bps, and 4.96 bps, respectively, fetching 4.8772%, 5.6936%, and 6.2994%. Rates of the three- and four-year notes, meanwhile, climbed 5.49 bps (5.0197%) and 4.11 bps (5.6786%).
At the long end, 10-year debt’s yield went down by 5.11 bps to 6.3950%, while 20-year bond saw its yield inch up by 4.82 bps to 7.4071%.
The trader said for this week, “market players await the BSP’s inflation forecast with investors bracing for yet another above 5% inflation print.”
RCBC’s Mr. Ricafort said GS yields could continue to move “sideways to slightly lower” this week due to a downward correction in global crude oil prices “that could somewhat ease inflationary pressures and provided that the US dollar peso exchange rate remained relatively steady/confined in a narrow trading range as seen over the past month.”
The economist added: “[F]urther hike/s in local policy rates cannot be ruled on the next BSP monetary policy-setting meeting on Aug. 9, 2018 amid relatively higher inflation among five-year highs and weaker peso exchange rate vs. the US dollar among 12-year highs recently.”

How PSEi member stocks performed — July 20, 2018

Here’s a quick glance at how PSEi stocks fared on Friday, July 20, 2018.

Philippine Development Plan 2017-2022

Philippine Development Plan 2017-2022

PEZA told not to blame TRAIN 2 for weak investment

THE Department of Trade and Industry (DTI) said the Philippine Economic Zone Authority (PEZA) needs to stop blaming the second phase of the Tax Reform for Acceleration and Inclusion law (TRAIN 2) for the decline in its investment pledges.
Trade Secretary Ramon M. Lopez said other investment promotion agencies (IPAs) are posting annual increases in their project registrations, adding he does not know why PEZA’s totals have registered a downward trend.
“The question is, why are PEZA’s totals lower while those of BoI [Board of Investment] are higher. And other IPAs, even CEZA [Cagayan Economic Zone Authority] are showing increases,” he told reporters last week in Pasay City.
Ahead of the official data release, Mr. Lopez said the BoI’s six months to June investment pledges rose nearly 28% year-on-year.
PEZA’s new projects over the same period dropped 55.86% year-on-year to P53.067 billion. The number of projects also fell to 258 from 300 a year earlier with all industry-sector segments posting declines.
PEZA has blamed the drop on foreign investor apprehension over TRAIN 2, which hopes to rationalize investment incentives, including the replacement of the 5% gross income earned (GIE) tax incentive, in lieu of all local taxes, with a phased reduction of the corporate income tax rate.
“These foreign investors go to countries where incentives are time-bound,” Mr. Lopez said, adding that the only uncertainty he sees in TRAIN 2 is the transition period for current investors to adapt to the new regime.
“That’s the only uncertainty for PEZA locators. That alone. There should be no problem. So it is wrong to blame TRAIN 2 for the uncertainty. There must be something else that wasn’t there before,” Mr. Lopez added, citing trade tensions because PEZA locators are export-oriented.
As such, Mr. Lopez said he will take the lead in presenting the country’s investment climate to foreign businessmen.
“More clarity is needed for investors. I also don’t know what’s being presented. We have to see what the presentations are saying. That’s why I’d like to get more involved in the way things are being presented,” Mr. Lopez said.
“I’ll be talking also to potential PEZA investors. Whatever Plaza is saying about uncertainty, that’s her statement. We’d like to validate that,” he added, referring to PEZA Director-General Charito B. Plaza.
Regarding PEZA’s plan to become a government-owned and controlled corporation (GOCC) and leave the DTI for the Office of the President, Mr. Lopez said: “Nope. That cannot happen. They’re an investment promotion agency and part of their mission is industrial development.”
PEZA said it is seeking GOCC status as part of a proposal to amend the 23-year-old Republic Act 7916 or the Special Economic Zone Act of 1995.
PEZA said that as a GOCC, it will be “fully independent,” amid plans under TRAIN 2 to centralize investment promotion functions under a Fiscal Incentives Review Board (FIRB). — Janina C. Lim

Senate panel considering microgrids for rural power

THE SENATE energy committee is studying a plan to use the annual budget for rural electrification of nearly P5 billion to build microgrids to speed up the delivery of electricity in remote areas, its chairman said.
“By our computation, every year we allocate about close to P4 [billion], almost P5 billion in sitio and rural electrification. We plan to re-channel that to a microgrid project instead, because rural electrification is never completed,” Senator Sherwin T. Gatchalian told reporters after a recent energy forum.
He said one of the policies that he was looking at to promote microgrids — and their smaller version, minigrids — is to provide them with subsidies through the re-channeled funds from missionary electrification, which is collected from all on-grid electricity users.
He said the policy concept would be the subject of a resolution that he is planning to file before the government’s budget season.
A number of companies have previously expressed interest in putting up microgrids, which is a complete system with its own power resources, generation and load centers within a defined boundary.
However, electric cooperatives have criticized these plans, calling them an encroachment on their franchise areas by using total electrification as a guise to expand the private companies’ areas of operation.
Mr. Gatchalian said the National Electrification Administration (NEA), which oversees the electric cooperatives as well as rural electrification, had identified areas that are not provided with 24/7 electricity.
“We will prioritize those areas,” he said.
“Government can step in if the electric coop is not providing 24/7 electricity. And government can step in in two ways,” he said.
“Government can build the microgrid. I think they [government] can empower the local government units to do it, or ask the private sector to come in and build. I prefer the second one.”
He said he prefers the second option, which would not require a capital outlay from the government.
“But they have to open it up to the private sector to build the microgrid,” he said.
He said his committee has yet to study how many microgrids could be built using the electrification funds.
Asked about possible resistance from electric cooperatives, he said these entities should now be putting up microgrids if they intend to energize the unserved or underserved areas.
“But if [they’re] not providing 24/7 [electricity], that’s a failure on their part,” he said, adding that the electric cooperatives’ franchise is a privilege that the government can take back.
“The franchise is a privilege that the government gave you, but if you’re not using that privilege, we will take it back at least in that specific area. And government can step in to build or to ask somebody to build it,” he said.
Data from NEA show that as of May 2018, all cities and municipalities in the country have been energized, but there were barangays and sitios that remained without electricity. The agency placed the number of unserved barangays at 10, and the sitios at 24,496. — Victor V. Saulon

Gov’t fund utilization rate slips to 97.1% in Q2

FUND USAGE by national government agencies declined in the second quarter, the Department of Budget and Management (DBM) said.
The Notice of Cash Allocations (NCA) utilization rate slowed to 97.1% in the three months to June from 98.1% a quarter earlier.
The second-quarter result was better than the year-earlier NCA utilization rate of 94.6%.
The NCA is a quarterly disbursement authority issued by the DBM to government agencies, allowing them to withdraw funds from the Bureau of the Treasury to pay for contracted projects.
Government agencies used P739.54 billion of the P768.19 billion worth of NCA releases, with P28.65 billion left unused — against the P11.91 billion in unutilized NCAs in the first quarter.
In the first half of the year, national government agencies disbursed a total of P1.35 trillion worth of NCAs of the P1.39 trillion the DBM released.
This left a balance of P40.55 billion worth of unused NCAs.
The Commission on Elections and the Office of the Obmudsman logged a 100% utilization ratio in the first six months of the year.
The Department of Foreign Affairs and the Judiciary posted utilization rates of 99.9%; the Autonomous Region in Muslim Mindanao 99.7%; the Department of Public Works and Highways 99.6%; and Department of Interior and Local Government 99.5%.
The National Economic and Development Authority had the lowest NCA utilization rate in the first half at 58.4%, with P1.83 billion worth of NCAs.
It was followed by “other executive offices” with a 67.6% utilization ratio, amounting to P9.34 billion unused NCAs. The DBM had a 78.4% budget utilization rate, leaving P356.64 million unused. — Elijah Joseph C. Tubayan

Debt service payments more than double in May

THE GOVERNMENT’s debt service bill doubled in May, driven by domestic amortization payments, the Bureau of the Treasury (BTr) said.
The national government made payments of P159.1 billion during the month, up 102.96% from a year earlier.
The May total was about six times the total paid out in April.
Of the total payments in May, 86.73%, or P137.99 billion went to principal obligations and P21.11 billion represented interest.
P130.64 billion of the total principal payments went to domestic creditors and P7.35 billion to foreigners.
Meanwhile, P18.63 billion worth of interest payments went to domestic lenders and P2.48 billion to foreign.
In the five months to May, the debt service bill was P385.14 billion, up 9% from a year earlier.
Of the total, P243.7 billion went to principal payments, with P170.21 billion going to domestic lenders, and P73.49 billion to foreign.
A total of P141.45 billion went to interest payments, with P95.08 billion being paid to domestic lenders, and P46.37 billion to foreign.
The government aims to borrow P888.23 billion this year, with 65% sourced domestically. — Elijah Joseph C. Tubayan

DoE seeking comment on renewable energy dev’t zones

THE Department of Energy (DoE) is soliciting comment on a draft circular that will identify “competitive renewable energy zones” (CREZ) to help it direct the country’s power transmission development to areas where potential indigenous resources are located.
In the draft circular, the DoE will define a CREZ process in which it will identify the renewable energy (RE) zones to help in overcoming development obstacles such as transmission constraints and regulatory barriers to financial investment by the private sector.
“[I]n planning for new transmission infrastructure and/or upgrades to existing transmission infrastructure, the [DoE] deems it necessary to ensure the cost-effective delivery of electricity generated in regions with abundant RE resources in order to attain sustainable, stable, secure, sufficient, accessible, and reasonably-priced electricity supply and services,” the department said in the proposed circular.
The DoE said the ideal candidate areas for CREZ are “geographic areas characterized by high-quality, low-cost RE potential in addition to high levels of private-sector developer interest.”
In the selection process, the department will also identify a set of transmission or upgrade scenarios that will enhance the delivery of energy from the candidate RE zones.
The process will include an analysis of the “economic, operational, environmental, and other costs and benefits associated with the required transmission enhancement scenarios.”
It will also specify the cost-effective transmission line enhancements proposed to be included in the transmission development plan, as reviewed and approved by the DoE.
The DoE said the focus of the CREZ analysis is power interconnections in Luzon, Visayas and Mindanao.
Under the circular, the DoE will create a technical advisory committee, which is chaired by the DoE secretary or a designated representative. Its members include directors of some of the department’s bureaus, along with the heads of the National Renewable Energy Board, National Transmission Corp., National Electrification Administration, and National Grid Corp. of the Philippines. — Victor V. Saulon

The latest improvements to the Conceptual Framework

2018 is looking to be a busy year as far as financial reporting changes are concerned. There will be two major new standards adopted this year — one for revenue recognition and another one for financial instruments. Furthermore, it is in 2018 that the International Accounting Standards Board (IASB), the accounting standard-setting body, issued a revised version of the Conceptual Framework for Financial Reporting.
Although the Conceptual Framework is not a standard by itself, and does not override the provisions of any standard, its importance nevertheless cannot be downplayed as it assists the IASB in developing the standards. It also helps the financial statement preparers and users better understand and interpret these standards. In addition, the Conceptual Framework can be used as a reference by preparers who are trying to develop accounting policies but cannot find any applicable standard currently in place.
Prior to these improvements, the last revisions to the Conceptual Framework were issued in 2010. However, the 2010 Conceptual Framework was criticized for various reasons. Some critics pointed out that it lacks clarity, while others said that it excludes certain important concepts and that it does not support the current thinking of the IASB. With these new changes, the IASB aims to underpin the key concepts of the Conceptual Framework with sufficient details, which the IASB can use to develop standards while at the same time, help others better interpret and apply the standards.
The revisions include several new concepts, provide clarifications on some key concepts and update the definitions and the criteria for recognizing assets and liabilities.
NEW CONCEPTS IN THE REVISED CONCEPTUAL FRAMEWORK
The following are brief descriptions of the new concepts introduced in the revised Conceptual Framework:
• Description of the reporting entity – Although the IASB has admitted that it is not in a position to dictate who is required to prepare financial statements, the revised Conceptual Framework provides general guidance on a reporting entity (i.e., an entity that is either required or has opted to prepare financial statements and is not necessarily a legal entity). Identifying a reporting entity (or its boundary) may be difficult particularly if it is not a legal entity. In such a case, the primary consideration should be the users of the financial statements and what information they need from the reporting entity. Thus, even if the Conceptual Framework does not dictate what entity should prepare financial statements, it does clarify that a reporting entity cannot be arbitrarily identified.
• Measurement – Similar to the 2010 Conceptual Framework, the revised one does not mandate any specific measurement basis. The new framework does, however, identify and describe two measurement bases: the historical cost measurement and the current value measurement (which includes current cost, value in use and fair value), as well as the factors to consider when selecting such basis.
• Presentation and disclosure – This revision reflects the IASB’s intention of ensuring better and more effective communication of financial statement information, since this will make the information more relevant to the financial statement users. The revised Conceptual Framework introduces new concepts and guidance on how information, specifically income and expenses, should be presented and disclosed in the financial statements.
• Derecognition – The revised Conceptual Framework defines derecognition as “the removal of all or part of a recognized asset or liability from an entity’s statement of financial position.” When an entity derecognizes an asset or a liability, the aim is to always faithfully represent which assets or liabilities (or parts thereof) were retained after the transaction that gave rise to derecognition occurred.
UPDATES AND CLARIFICATIONS IN THE REVISED CONCEPTUAL FRAMEWORK
Other than the new concepts, several sections or chapters were also revised that include:
• Definitions of an asset and a liability – Instead of the asset and liability being defined as the ultimate inflow and outflow (respectively) of economic benefits, assets are now considered economic resources while liabilities are now looked on as the “obligation to transfer economic resources.” The phrase ‘expected flow’ was also deleted, emphasizing the fact that assets and liabilities may be recognized even if future inflow or outflow of economic benefits are not certain or even likely. In addition, the IASB also included the criterion “no practical ability to avoid” in the definition of the liability.
• Recognition of assets and liabilities – This is a major change from the 2010 Conceptual Framework. The 2010 version was more focused on recognition based on the probability of future inflows or outflows of economic benefits. The revised version talks about the qualitative side of capturing or recognizing assets, liabilities, income and expenses and emphasizes that recognition of these elements should only be done if they will result in relevant information and faithful representation.
The IASB also reintroduced some concepts to ensure consistency and minimize confusion on their application. One such reintroduced concept is prudence, which is defined as “the exercise of caution when making judgments under conditions of uncertainty.”
Another reintroduced concept is “substance over form”, with the IASB reinstating an explicit reference to the need to “faithfully represent the substance of the phenomena that it purports to represent.” Still another is the concept of stewardship, which was reinstated in recognition of the fact that financial statement users need to assess management’s stewardship over the resources of the entities through the information contained in the financial statements.
Since the revisions are effective immediately for the IASB and its Interpretation Committee or IFRIC, we will start seeing these changes reflected on the IASB’s and IFRIC’s future discussions and projects. Preparers who have developed or will be developing accounting policies based on the Conceptual Framework should consider these changes effective Jan. 1, 2020 and should note that these will be applied retrospectively. While the impact may not be significant or immediately felt by the entities and the preparers of the financial statements, entities should familiarize themselves with these new concepts and revised definitions as these may result in future changes to accounting policies, measurement of assets, liabilities, income and expenses and recognition and derecognition of assets and liabilities.
This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinion expressed above are those of the author and do not necessarily represent the views of SGV & Co.
 
Dhonabee B. Señeres and Ma. Emilita L. Villanueva are Partners of SGV & Co.

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