MC No. 08 s.2020Adoption of Accounting Standards and Philippine Interpretations Committee Questions and Answers (PIC Q&As)

Securities and Exchange Commission PHILIPPINES SEC Memorandum Circular No.J3 Series of 2020 SUBJECT ADOPTION OF ACCOUNTING STANDARDS AND PHILIPPINE INTERPRETATIONS COMMITTEE QUESTIONS AND ANSWERS (PIC Q&As) The Commission, in its meeting held on 12 March 2020, approved the adoption of the following pronouncements as part of SEC's rules a n d regulations on financial reporting: A. Accounting Standards Pronouncement Effecttvlty date PFRS 17, Insurance Contracts Effective for annual periods beginning on Amendments to PAS 19, Plan or after January 1, 2021. Amendment, Curtailment or Settlement Annual Improvements to PFRSs 2015-2017 Effective for annual periods beginning on Cycle or after January 1, 2019. Amendments to PFRS 3, Definition of a Business Effective for annual periods beginning on or after January 1, 2019. Effective for annual periods beginning on or after January 1, 2020. Amendments to PAS 1 and PAS 8, Effective for annual periods beginning on Definition of Material or after January 1, 2020. Philippine Interpretation IFRIC 23, Effective for annual periods beginning on Uncertainty over Income Tax Treatments or after January 1, 2019. El PICC Secretariat Building, Pasay City | S (+632) 818-6120 / (+632) 818-9763 www.sec.gov.ph | inquiry@sec.gov.ph Published: Philippine Daily Inquirer, March 21, 2020 Philippine Star, March 21, 2020

B. PIC Q&As PIC Q&A No. 2018-01, PAS 8 - Voluntary The consensus in this Q&A is effective changes in accounting policy from the date of the approval by the FRSC. PIC Q&A No. 2018-02, PAS 36 - Non- The consensus in this Q&A is effective controlling interests and goodwill from the date of the approval by the impairment test FRSC. PIC Q&A No. 2018-PFRS 13, PAS 16 and The consensus in this Q&A is effective PAS 36 - Fair value of property, plant from the date of the approval by the and equipment and depreciated FRSC. replacement cost PIC Q&A No. 2018-04, PAS 41 - Inability The consensus in this Q&A is effective to measure fair value reliably for from the date of the approval by the biological assets within the scope of PAS FRSC. 41, Agriculture PIC Q&A No. 2018-05, PAS 37 - Liability The consensus in this Q&A is effective arising from maintenance requirement from the date of the approval by the of an asset held under a lease FRSC. PIC Q&A No. 2018-06, PAS 27 - Cost of The consensus in this Q&A is effective investment in subsidiaries in separate from the date of the approval by the financial statements when pooling is FRSC. applied in consolidated financial statements PIC Q&A No. 2018-07, PAS 27 and PAS The consensus in this Q&A is effective 28 - Cost of an associate, joint venture, from the date of the approval by the or subsidiary in separate financial FRSC. statements PIC Q&A No. 2018-08, PFRS 10 and PFRS The consensus in this Q&A is effective 3 - Accounting for the acquisition of a from the date of the approval by the non-wholly owned subsidiary that is not FRSC. a business PIC Q&A No. 2018-09, PAS 21 - The consensus in this Q&A is effective Classification of deposits and progress from the date of the approval by the payments as monetary or nonmonetary FRSC. items PIC Q&A No. 2018-10, PAS 2 - Scope of The consensus in this Q&A is effective disclosure of inventory write-downs from the date of the approval by the FRSC. PIC Q&A No. 2018-11, Classification of The consensus in this Q&A is effective land by real estate developer from the date of the approval by the FRSC. PIC Q&A No. 2018-13, Conforming The effective date of the amendments is Changes to PIC Q&As - Cycle 2018 included in the affected Q&As. PIC Q&A No. 2018-14, PFRS 15 - The effective date a n d transition

Accounting for Cancellation of Real provision of this Q&A follow those of PFRS Estate Sales1 15 Appendix C, upon approval by the FRSC. PIC Q&A No. 2018-15, PAS 1- The consensus in this Q&A is effective Classification from the date of approval of the FRSC Contractors of Advances to and should follow the provisions under Prepayments: PAS 8, Accounting Policies, Changes in in the Nature of Accounting Estimates and Errors. Current vs. Non-current The effective date of the amendments is included in the Q&As affected. PIC Guidance of Financial Reporting June 2018 All of the foregoing pronouncements have been a d o p t e d by the Philippine Financial Reporting Standards Council a n d approved by the Board of Accountancy and Professional Regulation Commission and published in the Official Gazette. Issued this ^ March 2020 at Pasay City, Philippines. Deferred by S E C until December 31, 2020