FUNDAMENTAL CONCEPTSEconomic Entity This is the most basic concept in accounting. Organizations and individuals are separated.Periodicity Concept meaningfully subdivided into equal time periods for reporting purposes.Stable Monetary Concept PHP is the reasonable unit of measure.Going Concern continuously operating.Accrual Basis recording regardless of payment.Cash Basis recording when the transaction is paid.

CRITERIA OF GAAPRelevance results in information is meaningful and useful.Objectivity the resulting information is not influenced by the personal bias of judgment.Feasibility it can be implemented without complexity of cost.

BASIC PRINCIPLESObjectivity Principle the data available is accurate and as useful as possible.Historical Cost assets should be recorded at their actual cost.Revenue Recognition Principle when goods are delivered and service are rendered.Expense Recognition Principle goods and services are used up to produce revenue.Adequate Disclosure relevant information that would affect users understanding.Materiality only concerned with information that is significant enough to affect evaluations and decisions.Consistency Principle should use same accounting from period to period.

KNOWLEDGEGeneral Knowledge understanding different cultures in the world.Organizational and Business KnowledgeInformation Technology (I.T.) Knowledge control in computer-based systems.Accounting Knowledge SKILLSIntellectual abstract logical thinking and understand critical thinking.Interpersonal to work in groups and being a team player.Communication active listening skills and communicate effectively ones point of view.

VALUESProfessional Ethics accordance with the highest standards of professionalism.Moral Values ethical rules.FUNDAMENTAL PRINCIPLES Integrity straightforward and honest.Objectivity should not allow bias.Professional Competence and Due Care maintain professional knowledge and skill.Confidentiality not disclose to any such information to third parties.Professional Behavior avoid any actions that discredit the profession.

CONCEPTUAL FRAMEWORK Objective of the Financial Statement is to provide financial information about the reporting entity that is useful.Primary users Users/Investors and Lenders/CreditorsOther users employees (remuneration), customers (long term involvement), supplier/vendor (pay) and government (tax basis).Qualitative Characteristics information are likely to be most useful to users in making decisions.Relevance is capable of making a difference in the decisions by users.Predictive Value forecastConfirmatory Value correction of earlier expectationsFaithful Representation in words and numbersCompleteness includes all informationNeutrality free from biasFreedom from Error freedom from error din meaning nitoEnhancing Qualitative CharacteristicsComparability can compare with similar informationVerifiability information represents faithfully Timeliness information is available to decision-makers in timeUnderstandability classifying, characterizing and presenting information clearly and conciselyUnderlying AssumptionsGoing Concern financial statements are normally prepared on the assumption that an enterprise is a going concern and will continue in operation for the foreseeable futureElements of Financial StatementAssets resources controlled by the entityLiabilities present obligationsOwners Equity residual interestIncome increase in economic benefitExpense decrease in economic benefit MeasurementHistorical Cost actual costCurrent Cost should have been paid and the original market priceRealizable Value settlement value, value upon selling it and depreciated priceSettlement Value liabilities are carried at the undiscounted amounts of cashPresent Value discounted value of future cash flowConcept of Capital MaintenanceIncome Expenses = Net IncomeFinancial Concept absolute monetary valuePhysical Concept quantitative measurement of physical productive companyReporting Entity new item added but still a work-in-progress