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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.

Since 2007 Accounting Standards Council (ASC)

The CCDG was replaced by the Accounting Standards Council (ASC) as of 1 November 2007. The ASC was established by the Accounting Standards Act, passed in Parliament on 27 August 2007. In addition to prescribing accounting standards for companies, the ASC will also prescribe accounting standards for charities, co-operative societies, and societies. The Singapore Government believes that 'creation of the ASC is a positive step towards ensuring consistency in accounting standards, facilitating comparison of financial statements between different entities and enhancing the credibility and transparency of financial reporting'.

The ASC is responsible only for the formulation and promulgation of accounting standards. The monitoring and enforcement of compliance with accounting standards remains the prerogative of the respective regulators, the Accounting and Corporate Regulatory Authority (ACRA) for companies, Commissioner of Charities for charities, Registrar of Co-operative societies for co-operative societies, and Registrar of Societies for societies.


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.

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.