The impact of Philippine financial reporting standard for small and medium-sized entities (PFRS for SMEs) disclosure compliance on the overall performance of Philippine companies under the manufacturing of bakery products group

The Philippine Financial Standards for Small and Medium-Sized Entities (PFRS for SMEs) has been implemented since year 2010. The adoption of the standards is determined to be beneficial, for it is intended to address the specific needs of small and medium-sized entities. This study aims to verify whether the adoption of the new standards have a significant impact on the overall performance of the firms in the manufacturing of bakery products division under the food and beverage manufacturing industry in the Philippines. The firm characteristics of the companies, particularly the asset size and its year of existence, will also be considered in the determination of the effects to comply financial ratios. The study will make use of a four-year period for comparison, encompassing two years before and after the standards were implemented. The significance of the adoption to firm performance will be measured through the analysis of the degree of compliance to the standard and the effect of such variable to the financial ratios of the companies. Key financial ratios used as the measurement tool for company performance included the liquidity, leverage, activity, and profitability ratios. These variables were evaluated through the use of appropriate statistical tools and software to ascertain whether there is a significant impact of the compliance to the ratios or not. Internal users such as management and accounts, and external users such s potential investors and regulatory bodies, may find this study to be of relevance. Moreover, this study also intends to add to the knowledge of the academe. Results and findings may serve as a basis for the effective treatment of the costs and benefits of adoption and compliance to the PFRS to SMEs