Submitted by: SBS
There is a dearth of natural resources in Singapore, which imposes great limitations on what this city-state can do to further its growth. The Singapore leaders wisely decided to invest in the service industry. Realizing the potential of the field of accountancy, they decided to focus on it.
They vowed to make Singapore an accountancy hub, by the year 2020. Singapore leaders, government officials, accountants, Singapore accounting service providers and so many others put in their concerted efforts to realize it.
What is Meant by Singapore Financial Reporting
Today, Singapore has established itself as a force to reckon with in the field of accountancy. Accounting and audit services in Singapore like, SBS Consulting, practice Singapore Financial Reporting Standards (FRS) while delivering their services. Financial reporting for the annual financial periods starting on or after 1 January 2003, must confirm with the stipulations of the FRS.
Singapore Financial Reporting Standards
In 2002, Singapore took some game changing decisions to bring important changes in the way audited financial statements are prepared and presented. They dropped Statements of Accounting Standards (SAS) issued by The Institute of Certified Public Accountants of Singapore (ICPAS).
They choose to implement section 37 of the Companies (Amendment) Act 2002, and move on to Singapore Financial Reporting Standards (FRS). The FRS is an outcome of the efforts of a body that goes by the name of the Council on Corporate Disclosure and Governance or CCDG. The body also gave its consent for the adoption of all international interpretations as that of the Singapore FRSs.
Statutory Requirements for the Companies in Singapore
Unless exempted, each Singapore company is required to table its audited financial statements before its Annual General Meeting (AGM). The Companies Act of Singapore also mandates that such documents should not be more than six months old. Under the current Singapore Financial Reporting Standards, financial statements comprise balance sheet, cash flow statement, income statement, statement of changes in the equity of the company and the explanatory notes.
In addition to these documents, the company must also file reports prepared by its auditors and directors. They must also supply a document signed by the directors of the company, vouching its solvency and ability pay its own debts.
Appointing an Auditor is a Must
As the part of legal requirements of company formation in Singapore, every company, unless it is exempt must appoint at least one auditor within the three months of its incorporation. It must follow all the norms laid down by the Accountants act.
The appointee must be experienced and qualified enough to consume the financial statements, in order to prepare an auditors report for the government regulators, creditors, management and the shareholders of the company. External as well as internal audit reports are prepared by the experienced auditing firms in Singapore. They are very useful for these individuals in decision making.
Filing of Estimated Chargeable Income (ECI)
Within three months from the end of each financial year, each Singapore registered company must file its Estimated Chargeable Income (ECI) with the Inland Revenue Authority (IRAS) of Singapore. The filing is mandatory even when the ECI to file is NIL. The company must file a NIL ECI statement with the IRAS.
Filing of Annual Tax Returns with the IRAS
The Singapore companies pay their taxes on the preceding year basis. Profits earned by them in the financial year, ending in the preceding year are taxed accordingly. They must abide by the due date of November 30, for filing their tax returns. Reliable tax services in Singapore assist their clients in efficient tax filing.
Companies lucky Enough to Get an Audit Exemption
Failing to follow Singapore FRS, at the time of preparation of financial statements or to file them is taken as the breach of the Companies Act. It is the responsibility of the directors and they may get penalized for failing in it.
The Singapore law exempts a few of the companies from the statutory auditing of their financial statements. Small exempt private companies having less than S$5 million revenue and the dormant companies are exempted from these requirements. They also need not appoint an auditor. However, they must still prepare their accounts and consolidated accounts, if required, as per the stipulations of FRS.
About the Author: SBS Consulting, since its inception in 2010, is offering its customized corporate business solutions under-the-one-roof. The firms client base has its roots in the Small and Medium Enterprises in Singapore. Big national and global businesses also outsource their business needs to SBS Consulting. SBS delivers efficient and effective services in
company incorporation
,
accounting for small business
, auditing, bookkeeping,
corporate secretarial
, XBRL filing, GST filing and ECI filing.
Source:
isnare.com
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