What it is to Improve Financial Reporting Standards
Singapore is a well-known global business hub. From the outset, the forefathers of Singapore have maintained a stable and transparent business environment. They have studied the nation and the world’s financial reporting standards and utilized the state’s potential to gain a competitive advantage.
Financial reporting is used to prescribe recognition methods, presentation, measurement, and disclosure requirements needed for events and transactions. These are all part of financial statement reports. By organizing financial statements, you could come up with a basis of judgment if there are disputes.
Financial reports are applicable to any financial statement, and they give information on a company’s financial position, cash flow, and performance. It also gives a report on its shareholders, creditors, and future investors for the purpose of making economic decisions.
Financial reports are becoming more significant, with more cross border transactions, e-commerce, foreign direct investments, the evolution of capital markets, and companies listed in different categories.
It is important for you to have a better understanding of the financial reporting standards, and you can find out more here:
Main Objective of Improving Financial Reporting Standards
- Provide investor information – Investors would want to know how the business is reinvesting its cash, and how they efficiently use the capital. Financial reporting is helpful when investors are trying to decide whether they should or should not invest in your business.
- Cash flow tracking – This lets you see where the is coming from, where it goes, and if the business is losing or making a profit. You must know the answers to these because they will show you how the business is performing. This is also to see if it is able to cover debts and can grow continuously.
- A financial report lets you analyze your assets, liabilities, and equity – When you can monitor all of these, and any changes, you can do something to prepare for the future. This is also important in showing your resources’ availability for future growth.
The International Financing Reporting Standards (IFRS)
These standards are based on principles that received IASB approval. The IFRS used to be known as International Accounting Standards (IAS) and it was started after 1973. The IFRS objective is to build a certain set of superior quality, comprehensible, and easy to enforce financial reporting through an IASB. It can also encourage the quick implementation of these standards. Aside from that, it involves monetary reporting. It has promising, economic ventures and works hard to negotiate with nationwide accounting principles and IFRSs that result in quality solutions.
The IFRS is applicable to common and business financial reports. For instance, it includes the ones in industrial, commercial, financial, and activities like it. This is regardless of their legal state.
Singapore Accounting Standards
Accrual-based accounting is the main principle of the accounting standards in Singapore. The financial statements are made based on accrual accounting. Under this, the transaction effects and other events are identified when they happen and are recorded. It is also reported when financial statements are made to where they fall under. The prepared financial statements on the accrual basis tell users of past transactions that involve the payment and cash receipt. It also informs them about their obligations to pay cash and the resources that show the cash to be received.
There are 41 standards in Singapore’s accounting, and each has a standard known as FRS X. Each standard is for a particular topic as financial statements are presented, revenue recognition, inventories accounting, and more.
ACRA Publication Requirements
All companies must produce an account for profit and losses, and a financial balance sheet. The accounting records should be stored for five years at the end of a business year for every transaction. The audited accounts must have ACRA filing yearly but companies may choose their tax year. A company must keep records other than the ones for accounting, like important shareholders records, debenture holders, the shareholdings of directors and chiefs, nominee directors, and registrable controllers.
A foreign company must file financial statements with branch financial statements that were audited. This must be done within the two months of the annual general meeting date, or within financial year-end dates. It could also be within seven months from when the financial year ended in case the head office must not hold a yearly and general meeting by the law in place during its incorporation.
We can help you with XBRL Financial Report Services, and other accounting needs for your business. Our experts are there to assist you with writing financial reports, keeping track of your inventory, cash flow, and a lot more. You can come to us anytime.