The demand for accounting services Singapore has increased exponentially over the years. Several aspiring entrepreneurs are working with the best accounting firm in Singapore to maximize their business’ profitability and revenue. Majorities of the small and medium enterprises are leveraging accounting services to their leverage to procure a profitable revenue, and so far, the results have been astronomical.
The accounting services or accounting standards in Singapore are customized to meet the requirements of businesses according to their business size. The accounting standards are particularly titled “Singapore Financial Reporting Standards” (SFRS), and it is a derivative of the standards implemented by IFRS. Starting company incorporation in Singapore requires you to comply with SFRS to compile your financial data for financial reporting.
A large percentage of businesses in Singapore follow accrual-based accounting for preparing their financial information, and it requires the accountants to follow the accrual basis of accounting for preparing financial statements. Furthermore, SFRS comprises of payroll services, secretarial services, and corporate tax services to help businesses with their accounting needs.
Accounting Standards in Singapore for Small Businesses:
It is no wonder that accounting standards in Singapore have become complicated over the years. It requires businesses to work with the best accounting firm in Singapore to take care of their accounting firm. However, they also need to familiarize themselves with the accounting standards implemented by the SFRS to practice their business legitimately.
While corporate businesses benefited from the implementation of SFRS, majorities of the small entities weren’t pleased with the policies of the accounting standards; therefore, they found it challenging to adhere to the standards of SFRS. They believed that complying with SFRS took a toll over their resources that kept them from enabling the growth of their businesses.
To address the concern, the international SMEs ISAB implemented an IFRS for SMEs in the year 2009. It resulted in the Accounting Standards Council (ASC) Singapore to create a subsidiary of Singapore Financial Reporting Standards (SFRS) for small businesses in November 2010.
The accounting sector in Singapore is ruled by both categories of SFRS; however, the SFRS for small entities acted as a substitute for the SFRS for corporate businesses in Singapore. SFRS for small entities is approved by IFRS for small entities, and its issuance was confirmed after having a comprehensive consultation session with the stakeholders.
The SFRS for SE dictated policies and accounting standards to help small businesses utilize their resources properly. For instance, company incorporation in Singapore meets the criteria to apply for SFRS for SE under the given circumstances:
- The firm is not publicly accountable
- The firm is responsible for issuing general-purpose financial statements
- The firm qualifies to be a small entity; if its annual revenue doesn’t exceed more than $10 million, the total gross assets do not exceed more than $10 million, and it has a personnel size of 50 employees.