Changes to Financial Reporting Standards in Singapore
To support Singapore’s corporate governance and financial reporting framework, accounting standards are developed for public interest. To promote public confidence in the standards developed from the process, the accounting standard-setting process must be robust and credible.The Accounting Standards Council (ASC) is responsible for the formulation and promulgation of accounting standards in Singapore. These accounting standards include the Singapore Financial Reporting Standards (International) (SFRS(I)s), the Financial Reporting Standards (FRS) and the Singapore Financial Reporting Standard for Small Entities (SFRS for Small Entities). In addition to prescribing accounting standards for companies, the ASC also prescribes accounting standards for charities, co-operatives societies and societies. The Accounting Standards Act was passed in Parliament on 27 Aug 2007 and the Act came into effect on 1 Nov 2007. With the enactment of the Accounting Standards Act, the Accounting Standards Council (ASC) took over the task of prescribing accounting standards from the Council on Corporate Disclosure and Governance (CCDG). In addition to prescribing accounting standards for companies, the ASC will also prescribe accounting standards for charities, co-operative societies and societies.The ASC is responsible only for the formulation and promulgation of accounting standards.
The mandate of the ASC is to develop, review, amend and approve accounting standards for entities that are under its purview, taking into account:
- The information needs of the stakeholders of the entities;
- Facilitation of comparability, disclosure and transparency;
- Compatibility with relevant international standards; and
- Singapore’s reputation as a trusted international business and financial hub.
Overview of IFRS Foundation
The IFRS Foundation is a not-for-profit, public interest organisation established to develop a single set of high-quality, understandable, enforceable and globally accepted accounting standards—IFRS Standards—and to promote and facilitate adoption of the standards. IFRS Standards are set by the IFRS Foundation’s standard-setting body, the International Accounting Standards Board.The point of IFRS is to maintain stability and transparency throughout the financial world. This allows businesses and individual investors to make educated financial decisions, as they are able to see exactly what has been happening with a company in which they wish to invest. In the countries that have adopted IFRS, both companies and investors benefit from using the system since investors are more likely to put money into a company if the company’s business practices are transparent. Also, the cost of investments are usually lower. Companies that do a lot of international business benefit the most from IFRS. Singapore’s Financial Reporting Standards (FRSs) refer to Financial Reporting Standards and Interpretations of Financial Reporting Standards issued by the ASC. FRSs issued by the ASC are published for personal non-commercial use only, subject to the terms & conditions of use of the ASC website. This collection of FRSs includes official pronouncements issued by the ASC up to 31 December 2017 and are required to be applied for annual periods beginning on 1 January 2018. The collection does not include new/revised/amendments to FRSs which are effective for annual periods beginning after 1 January 2018. For a detailed list of Financial Reporting Standards Changes effective for annual periods beginning after 1 January 2018, kindly refer to ASC official website.