Most companies incorporated in Singapore and branches of foreign companies are required to prepare their financial accounts annually in accordance with the Singapore Financial Reporting Standards (“SFRS”). Moreover, Since 2011, ACRA has established the Financial Reporting Surveillance Programme (“FRSP”), where a selected pool of financial statements are reviewed to determine if they comply with the SFRS and give a true and fair view of the company’s profit and loss, as well as the state of affairs of the company.
As Singapore moves towards adopting the International Financial Reporting Standards (“IFRS”) adopted by countries such as Australia, Canada and the European Union, it is highly recommended that all companies in the city-state seek professional services and advice from professionally accredited accountants registered with the Institute of Singapore Chartered Accountants (“ISCA”). This ensures all SFRS provisions are adhered to.
Compilation of the balance sheet (with profit & loss)
A complete set of financial statements includes
- - a balance sheet
- - an income statement
- - a statement showing either all changes in equity or changes in equity other than those arising from capital transactions with owners and distributions to owners
- - a cash flow statement, and
- - accounting policies and explanatory notes.
It records an entity’s assets, liabilities, equity, income and expenses including gains and losses, contributions by and distributions to owners in their capacity as owners, as well as cash flow.
An entity may present a single statement of profit or loss and other comprehensive income, with profit or loss and other comprehensive income presented in two sections. Many entities present, outside the financial statements, a financial review by management that describes and explains the main features of the entity’s financial performance and financial position, and the principal uncertainties it faces.
Many entities also present, outside the financial statements, reports and statements such as environmental reports and value added statements. This is especially the case in industries where environmental factors are significant and when employees are regarded as an important user group.
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