Financial statements are documents which outline the financial performance, financial position, and cash flow of a company, and are useful for investors, lenders, customers, suppliers, and not least of all, government authorities. In Singapore, all business owners or entities are required to file their financial statements yearly. Depending on the size of your enterprise, you may have a more hands-on role in the filing of financial statements. This is often the case for small businesses as there are fewer employees and resources.
This blog will give you a brief outline of the necessary information to prepare you for the end of your financial year.
All businesses in Singapore are required by law to file their financial statements with the Accounting and Corporate Regulatory Authority (ACRA), but there are some exemptions:
If you are not any one of the above, you will be required to submit your financial statements in XBRL format, but the requirements do differ depending on your company’s nature and size. If you are considered a smaller and non-publicly accountable company, you only need to file the financial statements in the Simplified XBRL template along with a PDF copy of financial statements authorised by the directors of your company.
A smaller company is a company whose revenue and total assets for the current financial period are not more than $500,000 and $500,000, respectively.
You are considered a non-publicly accountable company if you are not:
For companies that do not fall under any of the 4 exemptions above and do not qualify as a smaller and non-publicly accountable company, you would be required to file your financial statements in Full XBRL template.
Your company can be exempted from audit as long as it meets the requirements of a small company.
A company qualifies as small if:
If your company is part of a group, the company must meet the above criteria as a small company and the entire group must be a “small group” to be eligible for audit exemption. A group cannot qualify as a small group if it meets less than 2 of the 3 quantitative criteria on a consolidated basis for the immediate past two successive financial years.
Similarly, a company will remain a small company for subsequent financial years until it is disqualified when:
The purpose of these financial statements is to give a true and fair view of a business’s financial position and performance. At a minimum, the financial statements should include the following:
The ACRA is a governmental body which oversees enterprises and businesses in Singapore. The filing of financial statements to ACRA is required by law, and failing to do so is considered an offence. It is important to keep your financial statements in compliance with the Singapore Financial Reporting Standards as well, at risk of being fined up to $50,000.
It is thus of utmost importance that these statements are prepared in accordance with Singapore Financial Reporting Standards (SFRS) and by qualified personnel. Only those with the necessary skills and knowledge can ensure that the statements are up-to-date, accurate and complete. Otherwise, inexperience and errors can easily be spotted by those in the know when your company submits the financial statements.
Starting a business in something you are passionate about can take your company off the ground in Singapore, but the financial and accounting aspects of it can use up a lot of time to learn and get used to. At Chartsworth, we can work with you to build up your financial statements as part of our accounting services. Our Chartered Accountants can handle all aspects of your financial management, offering advisory, tax and corporate secretarial services to help empower you and your organisation.
Get in touch with us here to learn more about our packages.