By Clarie Chan
All Singapore incorporated companies are required to prepare financial statements in compliance with the Accounting Standards prescribed by the Companies Act. The Accounting Standards defined under the Companies Act refers to the Financial Reporting Standards (FRS) issued by the Accounting Standards Council (ASC), which includes the Interpretations of Financial Reporting Standards (INT FRS)
The Recommended Accounting Practices (RAPs) prescribed by the Institute of Singapore Chartered Accountants (ISCA) provides guidance in the absence of an FRS or INT FRS. However, the applications of RAPs in financial statements is only recommended, not mandatory. Companies may choose to only state that their financial statements have complied with FRS only.
Besides the Financial Statements, the Directors’ Report, Statement by Directors, and Auditor’s Report (for companies without audit exemption) are also required. The Directors’ Report, Statement by Directors, and Auditor’s Report, are not part of the financial statements.
The Singapore Financial Reporting Standards (SFRS) are principally based on the International Financial Reporting Standards (IFRS) of the International Accounting Standards Board. The FRS issued by ASC as of 31 December 2019 are as follows:
| Reference | Title |
| FRS 1 | Presentation of Financial Statements |
| FRS 2 | Inventories |
| FRS 7 | Statement of Cash Flows |
| FRS 8 | Accounting Policies, Changes in Accounting Estimates and Errors |
| FRS 10 | Events After the Reporting Period |
| FRS 12 | Income Taxes |
| FRS 16 | Property, Plant and Equipment |
| FRS 19 | Employee Benefits |
| FRS 20 | Accounting for Government Grants and Disclosure of Government Assistance |
| FRS 21 | The Effects of Changes in Foreign Exchange Rates |
| FRS 23 | Borrowing Costs |
| FRS 24 | Related Party Disclosures |
| FRS 26 | Accounting and Reporting by Retirement Benefit Plans |
| FRS 27 | Separate Financial Statements |
| FRS 28 | Investments in Associates and Joint Ventures |
| FRS 29 | Financial Reporting in Hyperinflationary Economies |
| FRS 32 | Financial Instruments: Presentation |
| FRS 33 | Earnings per Share |
| FRS 34 | Interim Financial Reporting |
| FRS 36 | Impairment of Assets |
| FRS 37 | Provisions, Contingent Liabilities and Contingent Assets |
| FRS 38 | Intangible Assets |
| FRS 39 | Financial Instruments: Recognition and Measurement |
| FRS 40 | Investment Property |
| FRS 41 | Agriculture |
| FRS 101 | First-time Adoption of Financial Reporting Standards |
| FRS 102 | Share-based Payment |
| FRS 103 | Business Combinations |
| FRS 104 | Insurance Contracts |
| FRS 105 | Non-current Assets Held for Sale and Discontinued Operations |
| FRS 106 | Exploration for and Evaluation of Mineral Resources |
| FRS 107 | Financial Instruments: Disclosures |
| FRS 108 | Operating Segments |
| FRS 109 | Financial Instruments |
| FRS 110 | Consolidated Financial Statements |
| FRS 111 | Joint Arrangements |
| FRS 112 | Disclosure of Interests in Other Entities |
| FRS 113 | Fair Value Measurement |
| FRS 114 | Regulatory Deferral Accounts |
| FRS 115 | Revenue from Contracts with Customers |
| FRS 116 | Leases |
Pursuant to FRS 1 (2019), a complete set of “financial statements comprises:
- Statement of financial position as at the end of the period;
- Statement of profit or loss and other comprehensive income for the period;
- Statement of changes in equity for the period;
- Statement of cash flows for the period;
- Notes to financial statements, comprising significant accounting policies and other explanatory information;
- Comparative information in respect of the preceding period; and
- Statement of financial position as at the beginning of the preceding period when an entity applies an accounting policy retrospectively or makes a retrospective restatement of items in its financial statements, or when it reclassifies items in its financial statements
An entity may use titles for the statements other than those used in this Standard. For example, an entity may use the title ‘Statement of Comprehensive Income’ instead of ‘Statement of Profit or Loss and Other Comprehensive Income’.”[1]
FRS 1 (2019) is in effect for financial periods beginning on or after 1 January 2019. All of the aforesaid must be presented in the financial statement to ensure compliance. The Statement of Financial Position, Statement of Comprehensive Income, Statement of Cash Flows, and Statement of Changes in Equity, are collectively known as the “Primary Statements”.
This article is adapted from the book “Corporate Directions: A Comprehensive Guide for Directors of SMEs in Singapore” published by Iconomy Holdings Pte Ltd. ISBN: 978-981-1461-14-9 (E-Book); ISBN: 978-981-1461-13-2 (Paperback)
[1] FRS 1 (2019) Paragraph 10
