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Year-End Requirements for Corporations

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As the year comes to a close, corporations are reminded of their obligations to submit annual financial statements (AFS) to the Securities and Exchange Commission (SEC). Below is a summary of the requirements:

Submission Requirements

  • Submit AFS within 120 days after fiscal year-end
  • Use prescribed financial reporting framework
  • Assess company’s ability to continue as a going concern
  • Disclose matters related to going concern
  • Prepare and present financial statements fairly

Key Updates

  • In May 2016, the SEC allowed for a longer period of 180 days to submit AFS.
  • In January 2017, the standard form of Statement of Management’s Responsibility (SMR) was revised to reflect new and revised auditor reporting standards.

Responsibilities

  • Corporations are responsible for:
    • Preparing and presenting financial statements fairly
    • Assessing their ability to continue as a going concern
    • Disclosing matters related to going concern
  • The Board of Directors (Trustees) is responsible for:
    • Overseeing the company’s financial reporting process
    • Reviewing and approving financial statements
  • Independent auditors conduct audits in accordance with Philippine Standards on Auditing.

Timeline

  • Corporations must submit AFS within 120 days after their fiscal year-end, unless an extension has been granted by the SEC.
  • The deadline for submission is:
    • December 31 (for companies with a December 31 year-end)
    • March 31 (for companies with a March 31 year-end)

Consequences of Non-Compliance

Failure to submit AFS or comply with other requirements may result in penalties, fines, and even suspension or revocation of the corporation’s registration.

Conclusion

As the year comes to a close, corporations must ensure compliance with SEC requirements for submitting annual financial statements. Failure to do so can have serious consequences. It is essential to review and update financial records, assess going concern, and conduct audits in accordance with Philippine Standards on Auditing.