Home     Help     Sitemap   




Small Medium Enterprise (SME) Grant
> Brief History of Singapore
> Singapore Economy
> Why Setup in Singapore?
> Type of Business Entities
> Singapore EntrePass
> Singapore Employment Pass
> Singapore Immigration
> Travel To Singapore
> Accommodation In Singapore
> Hotels In Singapore
> Corporate Credit Cards
> Forex Exchange
> Stock Market
> Courier Services
> Cash Management
> Singapore Money Lenders
> Recover Bad Debts
> Wealth Management
> Risk Management
> Accounting Services
> Auditing Services
> Bookkeeping
> Corporate Secretarial Services
> Taxation Services
> Payroll Services
> Singapore Tax Rates
> Singapore Banking Services
> Singapore Web Hosting
> Singapore Exchange Cloud Hosting
> Singapore Virtual Office
> Singapore Serviced Office
> Home Office
> Singapore Offshore Company
> Singapore Offshore Banking
> Articles
> Resources
> FAQs
> Business Plan Resources
> Business Calculators
> Links
> Free Business Listing
> Blog
Simplified Financial Reporting For SMEs
  Small and medium-sized entities (SMEs) in Singapore may soon be using simplified versions of accounting standards. This will reduce their cost of financial reporting and improve timeliness of reporting.

The CCDG (Council of Corporate Disclosure & Governance) has issued the IASB's (International Accounting Standards Board) discussion paper in Singapore to discuss the approach to formulating a separate set of financial reporting standards for SMEs that do not have public accountability. Singapore SMEs can apply these simplified standards when they are adopted locally in the next one to two years.

Global Reporting Standards

In September 2003, the IASB surveyed national standard setters of the need to have a separate set of standards for SMEs. With near unanimity, the 30 standard-setters that responded said that the IASB should develop global standards for SMEs. The IASB has developed a list of some 25 disclosure and presentation simplifications and another 25 recognition and measurement simplifications already in place at the national level for SMEs in those 30 countries.

Paul Pacter, IASB's director for SMEs, who spoke at ACCA's (Association of Chartered Certified Accountants) Centenary Conference in Singapore in May this year, said that while the board's full International Financial Reporting Standards (IFRS) are suitable for all entities, the focus of users of SME financial statements can be different.

Mr Pacter said, "Users of financial statements of SMEs are interested more in current liquidity and short-term cash flows than long-term forecasts of cash flows and earnings. Interest coverage and related party transactions are also areas of concern for smaller companies."


Others have argued that a special set of accounting standards for SMEs may make sense, on the basis that one size does not necessarily always fit all, but are anxious that we are moving away from the international harmonization that is being sought. They fear there could be a rift between the entities preparing financial statements based on SME standards and those on the full IFRS (International Financial Reporting Standards) or IAS (International Accounting Standards) - resulting in a lack of comparability of financial statements even in the same industry.

The IASB will publish a single exposure draft of the 'SME versions' of all existing IFRSs (including IASs and Interpretations) rather than separate exposure drafts of individual IASB Standards for SMEs. The IASB will then issue one volume containing the definitive 'SME versions' of all IFRSs (including IASs and Interpretations), with a single effective date.

Subsequently, each new exposure draft of an IASB Standard or Interpretation for SMEs will go out at the same time as each exposure draft of an IFRS or draft Interpretation. The effective dates of the new or revised standards for SMEs would most likely be the same as the effective dates of the new or revised IFRSs (including Interpretations).

The CCDG (Council of Corporate Disclosure & Governance) in Singapore would most likely adopt IASB's SME standards and apply the same procedures for the issuance of these standards and the full IFRS.

'Bottom Up' Approach

While ACCA welcomes the fact that IASB has launched the discussion paper and hopes that it will stimulate debate about the type of accounting standards which should apply to SMEs, it is concerned that the resulting standards will not be relevant to a vast number of companies because there will be adaptations of international standards which apply to multi-national listed companies with different needs and resources.

Professor Robin Jarvis, Head of ACCA's Small Business Unit, said: "Rather than try to adapt the full IFRS, we would prefer to see a 'bottom up' approach where standards were written with SMEs very much in mind."

One major interest of SMEs would be to reduce the cost of preparing financial statements. For this purpose, the IASB has and will be introducing simplifications in presentations and disclosures, and recognition and measurement procedures. IASB has also stated that "any modifications to concepts or principles must be on the basis of the identified needs of users of SME financial statements and cost/benefit analysis."

Cost/benefit analyses would therefore play a crucial role in deciding the financial reporting requirements for SMEs. Nevertheless, preparers should not be surprised if there are additional disclosures and accounting requirements which address the special concerns of users of SMEs financial statements - for example short-term cash flows and liquidity issues.



> 12 Dos And Don'ts Of Successful Networking
> 7-Step Guide To Getting Your Business Premises
> Branding For Success
> Increase The Visibility Of Your Business
> Joining Associations To Network
> Paying A "Visit" To Your Competitors
> Test-Marketing Your Products
> The Art of Funding and What Investors Will Never Tell You
> The Critical Need For Software Asset Management
> Simplified Financial Reporting For SMEs
> Turn Contacts Into Relationships
> Types Of Market Research
> Ways To Venture Abroad
> How to Secure Business Funding for Start-Ups?
> How to Choose Right Credit Card?
> Investment Myths And The Forex Markets
> What Is Debt Consolidation?
> How Can I Eliminate Credit Card?
> What Is Short Refinance?
> What Is An Offshore Bank Acocunt?
> What Is Corporate Finance?
> What Is Office Hoteling?
> Business Printing and its Various Uses

Please email us if you would like to place your company ads here.
Microsoft Exchange 2013
AVG Internet Security
AVG Anti-Virus

Business Plan Pro
Singapore Business Formation © 2006 - 2013