Accounting Standards for Businesses in Singapore

Accounting services in Singapore advise business owners to comply with the Standard Financial Reporting Standards (SFRS) by IRAS. These make sure that financial reporting in Singapore is compatible with international standards.

Following these standards assists businesses in measuring their financial health against the same yardstick. These standards are reflected in the business’ financial statements and come handy in gauging business' financial health. These statements are also useful to investors in taking investment related decisions.

Experts advise foreigners to appoint an experienced provider of accounting services in Singapore. These professionals remain updated and know the latest changes in the rules and regulations. They are in a position to help their clients in their legal compliance.

Importance of Financial Reporting

What is financial reporting and why businesses should follow it?

Every company's financial data is its private and sensitive information. However, companies incorporated in Singapore have to comply with rules of IRAS. They have to reveal this vital information through the act of financial reporting to the external and management stakeholders.

As part of their financial reporting, they have to prepare financial statements to show their company's performance over a particular period. A public company, listed on the stock exchange, need to prepare and publish a financial report for the benefit of its investors and the general public. A number of them, hire a reliable accounting firm Singapore for the purpose.

The report gives the company's management, investors, shareholders a fair idea about the company's financial position, cash flow or liquidity, and overall performance. At the time of preparing financial statements, the company has to be concise and clear about all of its financial decisions that could have impacted the course of its business.

International Financial Reporting Standards

The International Financial Reporting Standards (IFRS) are implemented to achieve consistent and transparent financial statements. They elaborate on maintaining and reporting of a company's accounts, the transaction types and other items with financial impact. They aim to help businesses in producing reliable and consistent financial statements that benefit all.

Singapore Financial Accounting Standard (SFRS)

Singapore Financial Reporting Standards are based on IFRS. They cover forty sections and starts from FRS 1. They elaborate on a specific topic. Of these, every business owner should know about accounting’s accrual basis. It gives them a better understanding of their assets and liabilities at the end of the accounting period.

The business owner should also know about how the accrual system and cash-basis system differ.

• The accrual system keeps track of the company's earnings and expenses incurred as they occur.
• In the cash-basis system, the profits are shown in the revenue statement when the expenses or earnings are obtained in the bank account of the company.

Accounting Standards for Singapore Small Businesses

Singapore small businesses have to follow a simplified version of the international standards. They are prepared by the IFRS Foundation to minimize the burden of financial reporting for them. It is also called as the SFRS for SE. Startups and companies that do not present their financial statements to external parties are eligible for using SFRS for SE.

Switching from SFRS for SE to SFRS

Singaporean small companies can follow SFRS for SE. However, they have to switch to full SFRS when they breach the size criterion for two successive reporting periods. Some companies do not enjoy the transition. The experts from accounting services in Singapore advise them to invest in educating their employees and should also invest in the latest accounting software.

Appoint Professional Accounting Firm Singapore

Many startups and small business owners who multitask choose to appoint experienced an experienced accounting firm Singapore. These professionals assist them in complying with the accounting standards in force in Singapore. They also advise them on the benefits of gaining deep insights into the financial working of their company for making better business decisions.