The Monetary Board (MB) approved on 23 April 2009 the extension of the deadline for the submission of the 2008 audited financial statements (AFS) of trust institutions (TIs) until 30 June 2009. This is to give them ample time to prepare the AFS given that this will be the first time that they will adopt the Philippine Financial Reporting Standards (PFRS)/Philippine Accounting Standards (PAS).
The MB likewise approved the guidelines on the preparation of AFS as well as the transitory provisions in the accounting treatment of specific transactions. Under said guidelines, the complete set of financial statements (FS) for TIs shall be similar to that required of banks, except for the statement of cash flows. Further, TIs shall not be required to prepare comparative information for periods before 1 January 2008, instead, they have to disclose in the notes to the FS the end-2007 balances of the total assets of the general categories of their contractual relationships with clients prepared based on the previously applied Generally Accepted Accounting Principles.
The transitory provisions on the other hand, shall allow TIs to convert to PFRS/PAS only the accounts outstanding as of 31 December 2008. In addition, TIs may use the fair value of acquired and investment properties upon transition to PFRS/PAS as the deemed cost of said assets. However, they shall no longer be allowed to reclassify previously recognized financial assets between categories as they were already covered by Circular No. 628 dated 31 October 2008 on the reclassification of assets, which implements the October 2008 amendments to PAS 39.
TIs recently adopted their new Manual of Accounts (MOA), which provide the basic framework for their transition to PFRS/PAS. Said MOA is part of the Financial Reporting Package for Trust Institutions (FRPTI) issued under Circular No. 609 dated 26 May 2008, as amended.