Singapore

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Financial reporting framework in Singapore

Accounting Standards

2002-2007 Council on Corporate Disclosure and Governance (CCDG)

In 2002, the Singapore government created the Council on Corporate Disclosure and Governance (CCDG) to replace the (then) Institute of Certified Public Accountants of Singapore as the accounting standard setter for all companies incorporated in Singapore.

2007-2023 Accounting Standards Council (the Council)

In August 2007, the Parliament passed the Accounting Standards Act, which came into effect on 1 Nov 2007. With the enactment of the Accounting Standards Act 2007, the Council took over the task of making or formulating accounting standards for companies from the Council on Corporate Disclosure and Governance (CCDG). In addition, the Council was responsible for the making or formulation of accounting standards for charities, co-operative societies and societies. 

Since 2023 Accounting Standards Committee (ASC)

With the passing of the Accountancy Functions (Consolidation) Act 2022, the Accounting and Corporate Regulatory Authority (ACRA), the Council, and the Singapore Accountancy Commission merged under one entity (ACRA) with effect from 1 April 2023. The Act conferred the function of making or formulation of accounting standards for companies, charities, co-operative societies and societies on ACRA and reconstituted the Council as the Accounting Standards Committee (ASC) under ACRA, to continue performing the function of making or formulation of accounting standards in the same way as the Council had done. The Act also provided for any accounting standards made or formulated or deemed to have been made or formulated, and any practice directions issued or deemed to have been issued, by the Council before 1 April 2023, and which have not been revoked before that date, to continue in force after that date as if made or formulated or issued by the ASC after that date. 

 

SFRS for Small Entities

In December 2010, the ASC issued the Singapore Financial Reporting Standard for Small Entities (SFRS for Small Entities).

The SFRS for Small Entities is based on the IFRS for SMEs. The main differences are the references to Singapore Financial Reporting Standards (SFRS) instead of IFRS, as well as the description of the scope and applicability of the SFRS for Small Entities.

An entity is eligible to the apply the SFRS for Small Entities if it is not publicly accountable, publishes general purpose financial statements for external users, and meets the definition of a 'small entity' (for each of the previous two consecutive financial reporting periods, with amended application to newly incorporated entities). An entity qualifies as a small entity if it meets at least two of the three following criteria:

  • total annual revenue of not more than S$10 million
  • total gross assets of not more than S$10 million
  • total number of employees of not more than 50.

The standard applies (as an option) as an alternative framework to the Singapore Financial Reporting Standard (SFRS) for the preparation and presentation of general purpose financial statements of entities for financial reporting periods beginning on or after 1 January 2011.

Comparison of Singapore Financial Reporting Standards and IFRSs

As of November 2008, ASC has issued a set of accounting standards and interpretations that are almost identical to the current set of International Financial Reporting Standards (IFRS), though some differences between Singapore Financial Reporting Standards and IFRSs remain, including the following:

  • Under the Singapore FRS 16 Property, Plant and Equipment, one-off revaluations of such assets that took place between 1984 and 1996 are permitted without requiring ongoing use of the revaluation model
  • Singapore FRS 17 removes the words in paragraph 14 and 15 of IAS 17, which indicates that land normally has an indefinite economic life and, if title is not expected to pass to the lessee by the end of the lease term, the lessee does not receive substantially all of the risks and rewards incident to ownership
  • Some differences exist in the requirements to present consolidated financial statements and in accounting for associates and joint ventures as compared to IAS 27, IAS 28, and IAS 31
  • There are some differences in the effective dates of the Singaporean equivalents of IFRS 2, IFRS 7
  • The following have not yet been adopted:
    • IFRS 3 (revised 2008) Business Combinations
    • IAS 27 (revised 2008) Consolidated and Separate Financial Statements
    • IAS 27 (revised 2008) Consolidated and Separate Financial Statements (Cost of an investment in the separate financial statements)
    • IFRIC 2 Members' Shares in Co-operative Entities and Similar Instruments
    • IFRIC 15 Agreements for the Construction of Real Estate

IFRS convergence

Singapore has been following a path of converging Singapore Financial Reporting Standards (SFRS) with IFRS for Singapore listed companies for many years and Singapore has adopted substantially all IFRSs issued by the IASB as SFRSs, albeit at times with different effective dates and transition requirements. However, the timeline for full convergence was adjusted to await developments in the major projects on revenue recognition, financial instruments and the impairment loss model, all of which are of significance to Singapore entities. Given the mandatory or expected mandatory effective date of 1 January 2017 and 2018 for the revenue recognition and financial instruments projects, respectively, the ASC has now decided to introduce a new financial reporting framework that is identical to IFRS for Singapore listed companies for annual periods beginning on or after 1 January 2018. This framework will also be made available for voluntary application by all non-listed Singapore-incorporated companies at the same time.

Sustainability reporting framework in Singapore

Listed companies have been required to prepare sustainability reports since 2016. 

Listed companies will be required prepare climate reporting in a phased approach according to the timeline below:

For Financial Year Commencing

Baseline Reporting Practice

Calendar Year in which Report Published

Between 1 January 2022 and 31 December 2022

Climate reporting is mandatory for all issuers on a ‘comply or explain’ basis.

2023

Between 1 January 2023 and 31 December 2023

Climate reporting is mandatory for issuers in (a) financial industry; (b) agriculture, food and forest products industry; and (c) energy industry.

For other issuers, climate reporting on a ‘comply or explain’ basis.

2024

Between 1 January 2024 and 31 December 2024

Climate reporting is mandatory for issuers in (a) financial industry; (b) agriculture, food and forest products industry; (c) energy industry; (d) materials and buildings industry; and (e) transportation industry.

For other issuers, climate reporting on a ‘comply or explain’ basis.

2025

In addition, following a 2023 public consultation, the Sustainability Reporting Advisory Committee (SRAC) has made the following recommendations:

  • Mandatory climate reporting from FY2025 for all Listed Issuers Listed Issuers, including those incorporated overseas, business trusts and real estate investment trusts, should report climate-related disclosures (CRDs) from FY2025. 
  • Mandatory climate reporting from FY2027 for Large Non-Listed Companies – Non-listed companies with annual revenue of at least $1 billion should make CRDs from FY2027. A review will be conducted in 2027 with the view to mandate climate reporting on Large Non-Listed Companies with revenue of at least $100 million, by around FY2030. The review will consider factors such as international developments, industry capacity and the implementation experience of Large Non-Listed Companies.
  • Prescribed standards aligned with the ISSB requirements for climate reporting – Both Listed Issuers and Large Non-Listed Companies should report CRDs using the local prescribed standards that mirror the requirements in the ISSB standards. To allow more time to prepare, these companies could opt to make certain complex CRDs such as Greenhouse gas Scope 3 emissions one/two years after reporting requirements kick in.
  • External assurance requirements – Companies subjected to mandatory climate reporting should obtain external assurance on Greenhouse gas Scope 1 and Scope 2 emissions1 from FY2027 for all listed issuers, and FY2029 for Large Non-Listed Companies. The assurance can be provided by ACRA-registered audit firms and Testing, Inspection, Certification firms accredited by the Singapore Accreditation Council.
  • Reporting and Filing Timelines – CRDs should have the same reporting and filing timelines as financial statements to facilitate timely communication to shareholders and other stakeholders. Legal responsibilities should also be imposed on the company, its directors, and/or officers to ensure accountability for CRDs.

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.