Institute of Certified Public Accountants of Singapore launches financial guide for SMEs

The guide for financial reporting is an optional standard effective for annual periods beginning on or after 1 January 2011.

According to a release, to help business owners and preparers of financial statements understand the financial, accounting and operational implications of adopting a new, streamlined and simplified reporting standard for small and medium enterprises or SMEs, the Institute of Certified Public Accountants of Singapore (ICPAS) has published a user-friendly guide entitled “The Singapore Financial Reporting Standard (SFRS) for Small Entities – What You Need to Know”.

Issued by the Accounting Standards Council on 30 November 2010, the SFRS for Small Entities is an optional standard effective for annual periods beginning on or after 1 January 2011. Aimed at facilitating financial reporting, the standard gives qualifying entities an alternative to the existing SFRS and is more simplified and streamlined.

Produced by the Education Sub-Committee of ICPAS’ Financial Reporting Committee, the publication provides an overview of the adoption criteria, highlights key differences between the new standard and the full set of SFRS, and examines the issues in adopting the new standard from a business perspective, particularly the impact of the
adoption on a company’s bottom-line. It also contains case studies that illustrate possible scenarios in which business entities can meet the eligibility criteria for adopting the new standard. All CPA firms will receive a complimentary copy of the guide.

ICPAS President Dr Ernest Kan said: “This guidance provides a detailed summary of the benefits and challenges an entity should consider before deciding to adopt the SFRS for Small Entities. It is hoped that the guidance will assist our public accountants to better advise their clients and address some of the issues in the transition to the new
standard.”

The publication supplements the educational outreach efforts by the Institute to help the profession understand this new standard. Between March to November last year, before the roll-out of the standard, ICPAS held the seminars on IFRS for SMEs and SFRS for Small Entities, and a Technical Group Discussion to increase awareness of the
requirements of the new standard.

Other initiatives include a resource centre developed in the ICPAS Centre for Financial Reporting micro-site (https://www.icpascfr.org.sg/standards/singapore/sfrs-for-small-entities), and a three-day ‘Train-the-Trainer’ session conducted by IASB Member and Chairman of the SME Implementation Group, Mr Paul Pactor, to develop the capacity of regional trainers to provide subsequent training on the IFRS for SMEs in their own jurisdiction.

The SFRS for Small Entities is closely modelled after the International Financial Reporting Standard for Small and Medium-sized Entities (IFRS for SMEs). It is a selfcontained standard which follows the recognition and measurement principles that are based on the full SFRS, but has been simplified and pared down for small entities. At fewer than 200 pages, SFRS for Small Entities provides a significant reduction in reporting and disclosure requirements. The standard can be adopted by the small and medium enterprises that form the majority of enterprises in Singapore.