..

Internal Users
·

ACTIVE OWNERS
External Users
(business 3 management) INTERNAL USERS ·

INACTIVE OWNERS
(creditors & lenders suppliers investors
have ready access , ,

to specific ACCOUNTING INFORMATION

taxing authorities regulatory bodies
, ,

Management Accounting employees' employee unions ,

financial
Information that meets the internal usersneeds analyst ,
consultant and adviser the
,
, public)
Financial Information
use
For Internal Decision
no ready access
Making
-

To FINANCIAL REPORTS / INFORMATION

evaluate Entity's Performance
NEGOTATIONS and
Rely heavily on

make Financial 3 Operational Plans

REGULATIONS to Obtain Business Infos
Business Decisions
implement
and owners to decide FINANCIAL ACCOUNTING
to helps the managers
for the business' conditions
whether :
provide FINANCIAL REPORTS / STATEMENTS
for External users
· TO CONTINUE Or LIQUIDATE

·
TO INFUSE(get/ put) ADDITIONAL INVESTMENTS Use FINANCIAL STATEMENTS
(banks)
to TRACK the business FINANCIAL
·
TO BORROW FROM CREDITOR

CHANGE BUSINESS METHODS STRATEGIES

TO CONDITIONS and PERFORMANCE
· Or

decisions that internal user's face sell their

to know whether to hold or

evaluate FINANCIAL INFORMATION EQUITY INTERESTS (Investments

to determine if the business can grant have DIYERSIFIED INFO NEEDS

the demands of employees
:
cenlarged or wide-variety
direct
· REMUNERATION (salary or compensation) to LOCATE investments into different
basket
· ECONOMIC BENEFITS (bonuses/health benefits) LESSEN the risk of loss
to

Use Of FINANCIAL INFO

Users
specific External
:
to

·
PRESENT 3 POTENTIAL CREDITORS
has the
to Assess if the enterprise
interests .
ABILITY to pay loans and

·
SUPPLIERS (Goods & services)
will able
to determine if they
to COLLECT OF GOODS Y SERVICES
COST
When DVE.

external users ID
they are DEPENDENT On the CONTINUATION

(business =
major customers)
of the BUSINESS

O
Indirect users
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GOCCs - PFRS

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created
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on PFRS .

specific PFRS adopted by IFRs

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Cap 3 Cap Mainte

users make decision :

↑ Buying selling
, Holding
or

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Equity 3 Debt Instruments

2 Providing/setting Loans 3
other forms of credit or

existing rights to vote on

3 Influencing management
actions affects entity's
g economic resources

Users : Need Information

from the
Entity
1 Entity's Econ Resources

2 Claims against Entity

of primary users of GPFR
3 changes in ER3 Claims
4 Efficiency 3 Effectiveness
of Management

profitability 3 stability
Employees
-

· Fair Salary /Wages

· viable Retirement Benefits
PossibleEmployment oppor
·

Government
·
enable to regulate
the business
· to know proper allocation
of resources through
taxation policies
 Public
different
·
to provide
business trends
· recent developments
·
Activities
·

employment data
to use Fl :

ways
·
Analyzing
National Economic
Status
"
Business trends

users common Needs

TO GPFR :
·
LIQUIDITY
of cash in future
-

availability
-

considering :

Financial commitments
over Next period

SOLVENCY
·

availability of cash over

meet
the long-term to

financial Obligation fall due

·
PROFITABILITY
-
ability to generate
cash flows from existing
resource base

operating
·
FLEXIBILITY Financial

-
ability adjust
to

in
unexpected downturns
economic environment
-

Operates or
advantage
take
of profitable investment
opportunities
Need from Entity
INFO : Users

Economic Resources
⑪ and claims
in SFP (balance sheet)
-

provided
controlled enterprise
by
-

and its capacity in past

predicting the ability to generate

equivalentinent
hand
Financial structure
-

help users predict future

needs
borrowing
-
how future profits and
cash flows will distributed
-

LIQUIDITY 3 SOLVENCY
meet
predict the ability to
fall due
Financial Commitment as
 Economic
③ Changes in
Resources 3 Claims
Performance
-
results by Financial
reflected by Accrual Accounting :

3 Financial performance
reflected Past cash Flow 3
by
:

event transaction
from Financial Performance
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Not resulting

Financial Performance
-
reflected by Accrual Accounting
provided in SCI
event transaction
Accrual Accounting

Imani
Revenue when
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earned in contrast when
is received .
E
cash
kita
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lang
siya'pag nagawa mo na
yung service)
when
recognize expenses
-

incurred regardless
if paid
provided
event transactions
#
SCI
-

assess potential changes

will likely control
enterprise
-

decision maker :

predict the capacity of

flows
generate cask
to
fro existing resourcebase
(profitabity)
reflected by
FPSCF :
Past Cash Foss
past cash flows

-
indicates how entity
obtain and spend cash
(may affects solvency Liquidity
-

help users understands

operation and evaluate
and Investing
Financing
Activities
FP
Not Resulting to
in market prices
CHAPTERG : -
includes changes
Framework interest rates that affects the
Conceptual or
-

to generate net cash inflow

for Financial Reporting ability
users understand the
·

help
changes
and implications
of in FP
.
changes
(flexibility) S

QC in Useful Fl
·

FS - must meet attributes

to be useful to users
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attributes :
QG
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latter : Includes
Explanatory Materials
ID About :
Management's Expectations

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Other Forward-looking
R .
Entity
into
 Fundamental QC
infos
Relevance important

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bears on economic decisions

users .
made by
Info considered relevant :

if affects the judgment evaluation

Of the users

confirmatory 3 predictive
value
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earlier
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enables users to confirm
expectations to the enterprise
how
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past economic activities affect enterprise)

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feedback/Confirmatory Valve

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for n

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Predictive value
Financial Information
about enterprise Financial Position
and past performance

(help users create more intelligble

prediction abt future 3 future events)

Future Events
:
·

returns
-

potential investment
credit default
-

that users need to make

other decisions
-

· uses Historical Information I

Performance)
( I basis for forecasts of
movements
in Analyzing price

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-users use :

of securities
·
Dividends Wages Payments
·

Ability to meet obligation

as come due .

materiality
clargely
atter of professional judgmento

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the ommission
determines whether
in FR
or misstatement info
impacts in user's decision making
-

the lASB set

no Quantitative threshold
if the item is material

decideita ente -

-
-

-
-
 Faithful Representation

1
·
Should Faithfully Represent the
Transactions andEvents
could
(purports to represent or

reasonably be expected torepresent)

Requires amounts and descriptions
ofInto in FS transactions by entity

truthfulness & not biased

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the limited
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resources
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ex ,
investments items and
,
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accounts generating more cash that it
requires for operational purposes

· Methods Assumptions and judgments

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,

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prepares FS
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,
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holding company(higher)
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