Philippine Public Sector Accounting Standard 29 FINANCIAL INSTRUMENTS: RECOGNITION AND MEASUREMENTTable of Contents PAG Number

BACKGROUND

INTRODUCTION TO THE IPSAS 29

PHILIPPINE APPLICATION GUIDANCE TO IPSAS 29

Scope 1

Effective Date2

Philippine Public Sector Accounting Standard 29FINANCIAL INSTRUMENTS: RECOGNITION AND MEASUREMENTBackground

This Philippine Public Sector Accounting Standard (PPSAS) 29 consists of International Public Sector Accounting Standard (IPSAS) 29, Financial Instruments: Recognition and Measurement, and the Philippine Application Guidance (PAG) prepared to suit the Philippine public sector situation.

The IPSAS 29 was issued in January 2010 by the International Public Sector Accounting Standards Board (IPSASB) of the International Federation of Accountants (IFAC). This includes amendments resulting from IPSASs issued up to January 15, 2012.The PAG (in italics) provides supplementary guidance on the proper implementation of IPSAS 29.

Introduction to the IPSAS 29IPSAS 29 prescribes the accounting principles for recognizing and measuring financial assets, financial liabilities and some contracts to buy or sell non-financial items. It complements the principles for presenting information about financial instruments in IPSAS 28, Financial Instruments: Presentation and for disclosing information about them in IPSAS 30, Financial Instruments: Disclosures.

It also prescribes principles for hedge accounting. Hedge accounting aims to reduce the volatility of an entitys financial performance by offsetting gains and losses on certain instruments. An entity may elect to apply hedge accounting, but only if prescribed conditions are met.Philippine Application Guidance to IPSAS 29ScopePAG1. Paragraph 7 deals with the applicability of this Standard to all public sector entities other than Government Business Enterprises (GBEs). GBE is an entity that has all the following characteristics: (a) Is an entity with the power to contract in its own name; (b) Has been assigned the financial and operational authority to carry on a business; (c) Sells goods and services, in the normal course of its business, to other entities at a profit or full cost recovery; (d) Is not reliant on continuing government funding to be a going concern (other than purchases of outputs at arms length); and (e) Is controlled by a public sector entity. This standard shall be applied to all National Government Agencies (NGAs), Local Government Units (LGUs) and Government-Owned and/or Controlled Corporations (GOCCs) not considered as GBEs. Effective DatePAG2. This PPSAS shall apply for annual financial statements covering periods beginning January 1, 2014. PPSAS 29 - Financial Instruments: Recognition and MeasurementJanuary 2014

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