Companies, governments and many other organisations, not-for-profit included, use accounting standards to determine how information in financial statements are presented, as required by law. Investors, as well as lenders, can use this information to decide where to supply resources or lend money. Charitable foundations and grantors can use the same information to make decisions for donation requests. Therefore, the information concerned must be “clear, concise, comparable, relevant and representationally faithful” and the the accounting standard-setting process must be robust and credible to support Singapore’s corporate governance and financial reporting framework.
Formulated by the Accounting Standards Council Singapore (ASC), accounting standards include the Singapore Financial Reporting Standards (International) (SFRS(I)s), the Financial Reporting Standards (FRS) and the Singapore Financial Reporting Standard for Small Entities (SFRS for Small Entities).
Accounting Services Provider Singapore
Financial Reporting Standards prescribe “the methods of recognition, measurement, presentation and disclosure requirements for transactions and events” presented in financial statements, and they apply to all general-purpose financial statements. Both public and private companies, except EPCs, are required to file the full set of financial statements in the eXtensible Business Reporting Language (XBRL) format. Insolvent EPCs must either file a full set of financial statements in XBRL format, or Financial statements highlights in XBRL format plus a PDF copy of the financial statements.
According to ASC, a complete set of financial statements comprises:
(a) a statement of financial position as at the end of the period;
(b) a statement of profit or loss and other comprehensive income for the period;
(c) a statement of changes in equity for the period;
(d) a statement of cash flows for the period;
(e) notes, comprising significant accounting policies and other explanatory
(ea) comparative information in respect of the preceding period as specified in
paragraphs 38 and 38A; and
(i) a statement of financial position as at the beginning of the preceding period
when an entity applies an accounting policy retrospectively or makes a
retrospective restatement of items in its financial statements, or when it
reclassifies items in its financial statements in accordance with paragraphs
These statements present a business entity’s financial position and performance to different stakeholders during the mandatory Annual General Meeting. Financial Statements are also required for annual corporate tax submission to IRAS, as well as Annual Return filing to ACRA.
Although the authorities do not require financial statements to be prepared or filed by certified professional personnel, a company’s directors are tasked with making sure financial statements submitted are not erroneous and do not fall short of presenting a true and fair view of the company’s current financial standing. If the documents do not comply with the SFRS or serious discrepancies should emerge, the company might be fined up to S$50, 000.
As there are more than 30 FRS required to be applied in reporting, covering diverse areas in addition to full financial statements such as:
- investment property
- government grants and assistance
- employee benefits
- intangible assets
- insurance contracts
- deferral accounts
and many more, therefore, officers with relevant experience, such as qualified accountants or company secretaries provided by Singapore Accounting Services, should be engaged to prepare and file these financial statements so as to ensure all relevant FRSs are strictly adhered to and the various statements and their explantory notes are accurate and error-free. Engaging professionals from an Accounting Services Provider Singapore who are familiar and expedient in working with these FRSs will ensure that your company’s specific business operations and financial circumstances are taken into good consideration to gain the best tax benefits.