BSP Issues Guidelines for Accounting Treatment of Foreign Currency Denominated Bonds
New Set of Guidelines for Financial Institutions
The Bangko Sentral ng Pilipinas (BSP) has issued a new set of guidelines for the accounting treatment of foreign currency denominated Philippine National Government (NG)/BSP bonds/debt securities booked under Held to Maturity (HTM) category. According to Circular No. 555 dated January 12, 2007, financial institutions are required to follow these guidelines in their accounting and reporting of such instruments.
Amendments to Earlier Issuances
The circular amends earlier issuances on the timing of booking of real and other properties acquired (ROPA). This new set of guidelines aims to provide clarity and consistency in the accounting treatment of foreign currency denominated bonds.
Regulatory Relief on Adoption of PFRS/PAS
Simplifying Accounting Treatment
In 2012, the BSP issued a memorandum providing regulatory relief on the adoption of Philippine Financial Reporting Standards (PFRS) and Philippine Accounting Standards (PAS) for prudential reporting purposes. This circular provided guidance on accounting treatment of losses from the transfer/sale of non-performing assets to special purpose vehicles.
External Audit/Use of Audited Financial Statements
Strengthening Governance
The BSP has also issued various circulars and memoranda related to external audit and use of audited financial statements. These include guidelines on submission of annual reports, sanctions for non-disclosure of relevant information, and expectations for an effective external audit function.
Some notable issuances include:
- Circular No. 956 dated April 17, 2017, which amended guidelines on the submission of annual reports and sanctions for non-disclosure of relevant information
- Memorandum No. M-2014-011 dated March 14, 2014, which outlined the BSP’s expectations for an effective external audit function
Participation in Global Bond Offering
Guidelines for Financial Institutions
The BSP has also issued circulars related to participation in global bond offerings, such as Circular No. 546 dated September 21, 2006, which provided guidelines on participation in the global bond offering of the Republic of the Philippines.
Conclusion
These are just some of the key issuances from the Bangko Sentral ng Pilipinas. The BSP continues to issue new and revised guidelines to ensure the stability and soundness of the financial system in the country.