Accounting is a very important aspect of a business. It is the process of recording, summarizing, analyzing, and reporting all financial transactions in a company or organization. By doing so, you can pinpoint where your business is currently standing and where it is heading. With this knowledge, you can adjust your business plans accordingly to optimize end results.
With these considerations, it is only necessary that regulators are requiring you to prepare and submit financial statements for your Singapore company. Your reports will paint them a picture on how your business is doing financially, whether it is thriving, sinking, or just getting by.
Since November 1, 2007, the Accounting and Corporate Regulatory Authority (ACRA) of Singapore has been requiring companies to file their financial statements using eXtensible Business Reporting Language (XBRL) format. It is a software standard introduced to enhance the communication of financial data. XBRL aims to make such information easier to collect, summarize, and share.
Indeed, technology has been advancing, even for the part of financial reporting. Let us learn more about Singapore’s XBRL requirements.
Who Are Required to File Financial Statements in XBRL format?
When you are preparing to file a financial statement for your Singapore company, you should be aware of all the regulations and guidelines that are applicable to you. After all, you do not want to be charged with some kind of penalty. It is best for you to study these policies.
Singapore’s ACRA said that all business organizations in the country should adhere to XBRL filing for financial statements. It applies to them whether they are unlimited or limited by shares, as long as the companies are incorporated. However, there are exemptions. The following are not required to do XBRL filings:
- The company is limited partnership or sole proprietorship.
- The company is dormant and compliant with the requirements mandated by Singapore Companies’ Act Section 201A.
ACRA finalized the guidelines in March 2014. With this, please note such guidelines when filing for tax compliance as an entrepreneur. It should also be noted that the earlier option for partial XBRL filing is no longer allowed.
What are Included in a Complete Set of Financial Statements?
Again, you want to know everything about filing a financial statement for your Singapore company to avoid missing out on important things. As a businessman, you should be thorough, ticking all the checks in the list all the time. Here are the reports that should be included in your financial statements:
- Statement of Financial Position. It summarizes information about your company’s assets, liabilities, and capital. It is also called a balance sheet.
- Income Statement. Also known as a statement of profit or loss, it covers comprehensive income, financing costs, capital gains and losses, overall revenues, and total expenses.
- Statement of Changes in Equity. It details the transactions related to the capitalization of the company, including changes to share capital, dividend declaration, and related matters.
- Statement of Cash Flow. This statement summarizes the inflow and outflow of cash and cash equivalents of the business. Cash flows are classified according to investing, operating, and financing activities.
- Financial Notes and Comparative Information. These are additional information that can support the financial reports.
Preparing the XBRL Financial Statements
ACRA introduced BizFinx, which is a preparation tool for XBRL financial statements. The tool allows filing of financial statements or highlights. The platform, which is available for download, has been launching several updates as well.
Learning how to open company in Singapore is just one thing. Maintaining a business is another aspect. If you need help for your company, reach out to 3E Accounting. They offer services in accounting, taxation, and business support.