Includes Glossary. This book will describe the evolution of financial accounting standards in the Philippines. It will examine the rationales for the decision to move from US-based accounting principles to the international accounting standards. The benefits and the challenges associated with the transition will be discussed. The information will be useful to other developing countries that are struggling to decide what accounting standards to adopt-to have a set of financial accounting standards that will assist in making comparisons of financial statements easier, more transparent, more cost effective and efficient, and will help in arriving at more informed and rational economic decisions in a global financial and market environment. Keyword: financial reporting, cash flow statements, income tax