Over the years, Singapore has attracted an enormous amount of foreign investment with its openness towards free trade, geographical advantages, world-class infrastructure and pro-business policies. For every business in Singapore, adhering to the local regulations is the key. Most of the businesses take help of accounting services Singapore like SBS Consulting. One of the statutory obligations is to file the financial report as per the Singapore accounting standards. In an attempt to attract foreign investors, these standards are designed as per the international accounting standards.
The result of non-compliance could be as severe as incarceration. The defaulters may face fine, penalty and court summons. So, it is better to get acquainted with the on-going laws and procedures. Alternatively, you can hire the professional accounting services Singapore.
This blog is highlighting the details of Singapore accounting standards followed by the certified and experienced CPAs working in accounting services Singapore. Understanding these standards may help you to compile a factual and compliant-friendly financial statement for your business.
What is Accounting Standards?
In brief, the accounting standards are reporting frameworks consisting a set of principles and conduct of policies for management of accounting transactions of business. Based on the accounting standards, business transactions and other events are recognized, measured, presented and disclosed in a financial report.
What is Financial Statement?
A financial statement or report is an official report compiled by a business, person or entity to keep the record of their financial activities. These statements are presented in a structured manner so that anyone can easily understand it. A true, accurate and fairly presented financial report is fundamental for the smooth functioning of the business as it helps the business owner in making critical financial decisions. The format of financial statement can vary from one jurisdiction to another.
Singapore Accounting Standards
Singapore accounting standards are formally known as Singapore Financial Reporting Standards (SFRS). The Accounting Standards Council (ASC) is responsible for the preparation and declaration of accounting standards in Singapore. The standards are based on International Financial Reporting Standards (IFRS). All locally based companies with the financial year starting on or after January 1, 2003, have to abide by the Singapore Financial Reporting Standards (SFRS).
The SFRS includes approximately 39 standards including Financial Reporting Standards (FRSs) and SFRS for Small Entities. Each standard covers specific topic such as revenue recognition, property, accounting for inventories, statement of cash flow, presentation of the financial statement, etc.
Why Compliance with SFRS is Necessary for Your Business?
To prepare the financial statement as per the SFRS is a mandatory requirement for every business. The national regulator, ACRA (Accounting & Corporate Regulatory Authority) demands the business to fulfill this legal obligation. Failing to comply may result in ACRA taking some severe actions such as
1) Issuance of advisory
2) Issuance of Warning Letter
3) Fine by offer of composition; and
4) Prosecution leading to fines and/or imprisonment
In addition to these, ACRA may ask the company to modify the deficient financial statement, either in the next set of reports or by having the current set of financial statement restated, re-audited and re-filed with ACRA.
Singapore Accounting Services Helps Your Business Stay Compliant and Competent
Keep your business safe, compliant-friendly and flourishing by hiring a good accounting firm in Singapore. When you engage a qualified team from the Singapore accounting services, you can rest assured that your accounting activities are in safe hands. The professionals working in these firms stay abreast of the changes in accounting requirements and eventually, they compile the financial statement as per the rules and regulations in force.