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Module 6 NOTES TO FINANCIAL STATEMENTSExercises/Assignments Answer the following Problems. In the financial statement of San Miguel Corporation, analyze the Notes to Financial Statement of the company following the order of presentation in the notes: 1. Statement of compliance with the PFRS. • State the compliance of the company in PFRS. The accompanying consolidated financial statements have been prepared in compliance with Philippine Financial Reporting Standards (PFRS). PFRS are based onInternational Financial Reporting Standards issued by the International Accounting Standards Board (IASB). PFRS consist of PFRS, Philippine Accounting Standards (PAS) and Philippine Interpretations issued by the Philippine Financial Reporting Standards Council (FRSC).The consolidated financial statements were approved and authorized for issue inaccordance with a resolution by the BOD on March 14, 2019.2. Summary of significant accounting policies used • List all the accounting policies that San Miguel Corporation used.The Group has adopted the following PFRS starting January 1, 2018 and accordingly, changed its accounting policies in the following areas: oPFRS 9 (2014), Financial Instruments, replaces PAS 39, Financial Instruments: Recognition and Measurement. The Group adopted PFRS 9 using the cumulative effect method. The cumulative effect of applying the new standard is recognized at the beginning of the year of initial application, with no restatement of comparative period.oFinancial Assets. The Group continued to measure at fair value, all financial assets previously held at fair value under PAS 39. The following are the changes in the classification of the Group’s financial assets: oCash and cash equivalents and receivables previously classified as loans and receivables are held to collect contractual cash flows and give rise to cash flows representing solely payments of principal and interest.oInvestments in equity instruments that were designated as at FVPL under PAS 39 have been classified as mandatorily measured at FVPL under PFRS 9.oInvestments in equity and debt instruments previously classified as AFS financial assets are designated as financial assets at FVOCI at the date of initial application.
oCertain investments in debt instruments with carrying amount of P201 as of January 1, 2018 were reclassified from AFS financial assets to financial assets at amortized cost.oPFRS 15, Revenue from Contracts with Customers, replaces PAS 11, Construction Contracts, PAS 18, Revenue, IFRIC 13, Customer Loyalty Programmes, IFRIC 18, Transfer of Assets from Customers and Standard Interpretation Committee 31, Revenue - Barter Transactions Involving Advertising Services.oTransfers of Investment Property (Amendments to PAS 40, Investment Property).