RMC No. 09-2005: Clarifies the term “Financial Statement” as defined in Revenue Regulations No. 4-2005

Summary

RMC No. 09-2005 clarifies the term Financial Statement as defined in RR No. 4-2005.

Key points

1. What financial statements include. They include the balance sheet, statement of income, statement of changes in equity and the statement of cash flows, with all notes. They must be prepared and certified correct by an independent external auditor qualified under RR No. 15-99, as amended.
2. Where to file. The statements must be filed with, and stamped received by, the LTS, LTDO, RDO or other Bureau office having jurisdiction over the taxpayer.
3. SEC accreditation for 2004 and earlier. For RR No. 4-2005, the rule that the external auditor be SEC-accredited does not apply to statements covering 2004 and earlier.
4. Statements for 2005. Taxpayers with total assets of more than P 15 Million for the period covering 2005 must use external auditors accredited by both the SEC and the BIR.

Who is affected

• Bank borrowers and co-makers under RR No. 4-2005
• Taxpayers with total assets of more than P 15 Million (2005 statements)

Deadlines and effectivity

• Periods covering 2004 and earlier: SEC accreditation requirement does not apply
• Period covering 2005: auditors accredited by both SEC and BIR for taxpayers with total assets above P 15 Million

Summary by Tax Resources PH. It is not a substitute for the full text of the issuance or professional advice.