Financial Statements In Singapore: A Guide For Business OwnersDownload Now: FREE GST 2023 GuidebookDownload Now: FREE Employment Pass ChecklistDownload Now: Free Incorporation Checklist
Unless exempted, every company in Singapore has to file its financial statements with the Accounting and Regulatory Authority (ACRA) once a year. These financial statements provide a fair and true view of the financial performance and position of the business and they are required to comply with the Singapore Financial Reporting Standards (SFRS). Sprout Asia takes a closer look at how the filing process works and helps you identify who is exempt from filing financial statements to ACRA.
What do Company Financial Statements Comprise of?
- Balance Sheet
Also known as the statement of financial position, they reflect the firm’s equity, assets, and liabilities at a given period.
- Cash Flow Statement
These statements shows cash (or its equivalent) flowing out of or into the firm as a result of its financing, operating, and investment activities.
- Statement of Equity Changes
These include transactions between the firm and its shareholders, changes to its share capital between the start and the end of the financial year, and (where applicable) the various categories of shares issued during that year.
- Comprehensive Income Statement
Financial statements should also include an income statement that shows the total amounts of income, losses, capital gains, and the financing costs of the company.
These are to explain important aspects of the financial statements, for example, accounting policies.
- Comparative Information
This is needed between the current statements (and notes) and those of the previous year.
What Types of Businesses Are Fully or Partly Exempt from Filing Financial Statements?
Small entities that meet at least two of the criteria below are only required to submit the first four types of statements mentioned above.
- Total assets of S$10 million or less
- Total yearly income of S$10 million or less
- Number of employees not exceeding 50
Meanwhile, the following kinds of businesses do not have to file financial statements with ACRA, however, it is still required internally for corporate secretaries to file Annual Returns (AR):
- Sole proprietorships
- EPCs (Exempt Private Companies)
- Dormant unlisted companies
What Should Happen Before Your Company Submits its Financial Statements?
Before filing a company’s financial statements with ACRA, these have to first be audited and presented for approval to the shareholders at an Annual General Meeting (AGM). An auditor’s report should accompany the audited financial statements. However, small entities as defined above are exempt from this auditing requirement.
It is important to be aware that unaudited financial statements in Singapore will not meet the minimum requirements. Your company’s financial statements will stay unaudited until they have been properly checked and approved by a certified external auditor.
How Should Consolidated Financial Statements be Filed?
The filing process involves the following steps:
1. The person preparing the financial statements can make use of the BizFin Preparation Tool available from ACRA, to map the required items in the statements to the appropriate tags in ACRA’s taxonomy.
2. This individual should first ensure that the statements meet the following minimum requirements:
a) Has a text block element that covers the full set of statements as sent to the shareholders.
b) Includes the detailed elements for the statutory reports, income statement, balance sheet, cash flow statement, and disclosure notes.
3. The person preparing the statements should then use the BizFin Multi-Upload Tool to first validate them before submitting the company’s financial statements to ACRA.
4. The final step is for the preparer to file the company’s annual returns before the deadline.
Who is Responsible for Filing Financial Statements Singapore?
ACRA does not stipulate who should prepare or file these financial statements. The company directors are responsible for ensuring that these statements are error-free. If they fail to represent a fair and true view of the business or do not meet SFRS requirements, the directors may be guilty of an offence, and could be fined as much as S$50,000.
It is therefore highly recommended that the individual, or individuals preparing your company’s financial statements be highly qualified and experienced.
When in Doubt, Reach Out!
Sprout Asia wants you to focus on what you do best, while we take care of the rest. We offer budget-friendy expert accounting services to help you ensure your financial statements are organised and accurate. Feel free to reach out to us with any of your questions about our services, we’ll respond within 24 hours.