Singapore Accounting standards reflect a set of practices and principles that ensure the integrity and conformity of corporate financial transactions. The standards were designed referring to the International Accounting Standards to promote consistent financial reporting. The purpose of the standards is to develop transparency and comparability between financial statements which promotes confidence in Singapore businesses.
In addition, establishing accounting standards makes compliance with reporting requirements easier for foreign corporations. The consistent recording and reporting also makes it easier for financial statement users to interpret financial information for the purpose of making valid decisions. For example, the general public can compare statements of different companies when making investment decisions. Thus, using established accounting standards helps trade creditors and the government better assess the true financial viability of an enterprise.
In-Depth and Thorough
The accounting standards are referred to as the Financial Reporting Standards (FRS) in the Companies Act. The standards are extensive and include a requirement of accrual based accounting and reporting. There are over 30 different accounting areas covered by the standards.
The Financial Reporting Standards, referred to by number, cover topics such as:
- Preparation and presentation of financial statements including the Profit and Loss Statement, Balance Sheet, Changes in Equity and Cash Flow Statement (FRS 1)
- Reporting of cash flow including cash, cash equivalents, revenue production, cash from operations, financing activities and investments (FRS 7)
- Accounting treatment of current and future tax consequences due to operations or settlements (FRS 12)
- Recognition of revenue through sale of goods and services or on a percentage of completion method (FR 18)
- Accounting for government grants , disclosure of any government assistance and disclosure of government participation in the enterprise on any basis including partial ownership (FR 20)
- Methods for disclosing financial instruments including measurement, initial recognition, classification and disclosure (FRS 32)
These are some the primary Financial Reporting Standards used by accountants and auditors in order to ensure appropriate, accurate and consistent financial accounting. The FRS are updated often. In 2011 the standards on consolidating financial statements (FRS 110), joint arrangements (FRS111), disclosure of interests in other entities (FRS 112) and fair value measurements (FRS 113) were revised.
Keeping Up To Date
The Singapore Accounting Standards Council is the agency responsible for developing, revising and issuing the accounting standards. Professional accountants keep track of the Council’s activities to ensure clients meet current Financial Reporting Standards at all times. Professional accounting and auditing services are essential to business success because they ensure a company produces reliable accounting records and statements for decision making purposes.