The Philippine Interpretations Committee (PIC) has approved Questions and Answers (Q&As) on revenue recognition for sales of property units under pre-completion contracts and clarification of the criteria for exemption from presenting consolidated financial statements. The Q&As have been approved for issuance by the Financial Reporting Standards Council (FRSC).

Q&A No. 2006–01: PAS 18, Appendix, paragraph 9 – Revenue recognition for sales of property units under pre-completion contracts. This Q&A allows the use of the percentage of completion (POC) method in accounting for revenues related to pre-completion contracts on the basis of the transfer of equitable interest to the buyer as provided in the appendix to PAS 18, Revenue. The Q&A also lists conditions that must be met for the use of the POC method.

Q&A No. 2006–02: PAS 27.10(d) – Clarification of criteria for exemption from presenting consolidated financial statements. PAS 27, Consolidated and Separate Financial Statements, specifies the criteria to be met in order that a parent company need not present consolidated financial statements. This Q&A clarifies the following criteria for purposes of that exemption: (a)
when consolidated financial statements are considered “available for public use” (e.g., when these are posted in websites) (b) financial reporting framework of other countries considered acceptable for purposes of the exemption (e.g., those that are converged or virtually converged with IFRS or are conceptually similar to IFRS).

The PIC was re-constituted by the FRSC in August 2006 principally to issue implementation guidance on Philippine Financial Reporting Standards (PFRS) and Philippine Accounting Standards (PAS). It’s predecessor was the Interpretations Committee (IC) of the Accounting Standards Council (ASC). The PIC has 13 members drawn from public accounting firms,
academe, regulatory bodies and preparors.

The PIC Q&As are posted in the Philippine Accounting Standards section of the PICPA website.