By: Seala Marie Asis, CPA
Wrapping the financial year ending December 31, 2019 could have been one of the most common works of Philippine accountants this first quarter of 2020. In this article, let’s deal about one of the most important reports, every SEC registered entities in the Philippines must properly comply with – the Annual Financial Statements.
The Securities and Exchange Commission (SEC) through SEC Memorandum Circular No. 2 Series of 2020 issued on January 21, 2020 has prescribed the related guidelines on filing of the Annual Financial Statements (AFS) of entities registered in the Philippines.
Who are covered by SEC MC 2-2020?
The said guidelines should be followed by the following Philippine registered entities:
- Branch Offices;
- Representative Offices;
- Regional Headquarters; and,
- Regional Operating Headquarters.
When should filing be made?
1. Philippine entities whose fiscal year ends December 31, 2019 (except entities with PSE listed and registered securities under SRC Sec. 17.2)
All SEC registered entities may file the AFS on or before April 19, 2020. However, starting April 20, 2020 entities shall file their AFS based on the last numerical digit or license number on the following schedule:
- April 20, 21, 22, 23, 24 : 1 and 2;
- April 27, 28, 29, 30 : 3 and 4;
- May 4, 5, 6, 7, 8 : 5 and 6;
- May 11, 12, 13, 14, 15 : 7 and 8; and,
- May 18, 19 , 20, 21, 22 : 9 and 0.
What happens when entities failed to file on the above dates prescribed?
All SEC registered entities in the Philippines who fail to file the AFS in accordance with the schedule above may file starting May 25, 2020 subject to the prescribed penalties which shall be computed from the last day of filing schedule stated.
2. Philippine entities whose fiscal year ends on date other than December 31, 2019
All other SEC registered entities with fiscal year other than December 31, 2019 shall file within 120 calendar days from the end of such fiscal year
What are the required documents to accompany the Audited Financial Statements?
- SEC prescribed cover sheet
- Statement of Management’s Responsibilities (SMR) for Financial Statements based on the format provided on SRC Rule 68, as amended
- BIR stamped received or Authorized Agent Bank (AAB) stamped received annual financial statements
- Independent Auditor’s Report or duly Notarized Treasurer’s Certification
Independent Auditor’s Report is attached if:
a. A stock corporation has total assets or total liabilities of Six Hundred Thousand Pesos (P600,000) or more as prescribed under the Revised Corporation Code of the Philippines (Revised Corporation Code) and any of its subsequent revision or such amount as may be subsequently prescribed;
b. A non-stock corporation has total assets or total liabilities of Six Hundred Thousand Pesos (P600,000) or more as prescribed under the Revised Corporation Code and any of its subsequent revisions or such amount as may be subsequently prescribed;
c. A branch office/representative office of stock foreign corporations has assigned capital in the equivalent amount of One Million Pesos (P1 Million) or more;
d. A branch office/representative office of non-stock foreign corporations has total assets in the equivalent amount of One Million Pesos (P1 Million) or more; and,
e. A regional operating headquarters of foreign corporations with total revenues in the equivalent amount of One Million Pesos (P1 Million) or more.
Notarized Treasurers Certification is attached if the SEC registered entity does not meet the threshold stated.
How to file the AFS?
Philippine entities can either have it filed on the SEC offices nationwide following the required schedule, use the SEC Express Nationwide Submission or any courier or regular mail. The reckoning date of the submission through the courier is the date the courier sent or delivered the file to the SEC.
Reference: SEC MC 2-2020
Seala Marie Asis is, CPA the head of the Financial Reporting Services of GPP CPAs ensuring the timely compliance of the report submission across related agencies.