The Accounting Standards Council (ASC) is empowered
under the Accounting Standards Act to prescribe accounting standards
for use by companies, charities, co-operative societies and societies.
The broad policy intention is to adopt the International
Financial Reporting Standards (IFRS) issued by the International
Accounting Standards Board (IASB). Convergence with international
accounting standards would achieve greater transparency and comparability
of financial information among companies and help lower compliance
costs for companies investing in Singapore as well as local companies
going overseas. However, while the ASC will track closely the
introduction of new IFRS for possible adoption in Singapore, it
will also take into account the local economic and business circumstances
and context, as well as the entity to which the IFRS would apply
to.
The ASC adopts a formal and rigorous process
in prescribing Financial Reporting Standards (FRS) so as to ensure
that the accounting standards prescribed are of a consistent high
quality. The various sectors and stakeholder groups are all given
adequate opportunities to express their views. The ASC also works
closely with the Accounting Standards Committee of the Institute
of Certified Public Accountants of Singapore (ICPAS’ ASC)
in reviewing new accounting proposals and prescribing accounting
standards.
The ASC believes it is useful to maintain good
communication with the IASB, through proactively surfacing views
relating to local specific issues on the IASB’s projects
for the IASB’s attention and consideration. These include
representation on the IASB Standards Advisory Council, participation
at standard setters meetings, reviewing and commenting on relevant
IASB’s research and improvement projects, and working with
IASB liaison representatives. The ASC also sees the benefit of
collaborating with national standard setters in the region in
reviewing convergence issues, especially where there are similar
concerns.
PROCESS FOR PRESCRIBING FRS (INCLUDING INTERPRETATIONS
OF FRS ALSO KNOWN AS INT FRS)
Exposure stage
1. When the IASB issues an Exposure Draft (ED)
on new IFRS/amendments to existing IFRS/International Accounting
Standard (IAS) or a draft Interpretation of the International
Financial Reporting Interpretations Committee (IFRIC)/amendment
to an existing Interpretation, the ASC also issues an equivalent
ED on the proposed equivalent FRS (ED FRS) or draft Interpretation
(ED INT FRS) in the name of the ASC on the ASC website, inviting
public comments. ICPAS also issues the ASC ED or draft Interpretation
concurrently at its website to seek its members’ comments.
2. The comments deadline for the ASC EDs usually
expires one month before the comments deadline imposed by the
IASB, to allow sufficient time for the collation of comments,
drafting of the comment letters to the IASB, reviewing of the
comment letters before submission to the IASB.
3. The ASC proactively seeks feedback from interested
email alert subscribers. To develop a list of interested parties,
the ASC taps on ICPAS’ list of about 50 interested parties,
comprising industry associations, Governmental bodies, listed
companies, banks, securities firms and academic institutions for
comments.
4. To gather more feedback from constituents,
the ASC may conduct separate public consultations to solicit comments
on specific areas covered in the ED FRS or ED INT FRS.
5. Respondents can forward their comments on
EDs to the ASC email account or by fax or post (as indicated in
every ED). The comments received will be channelled to the ASC
secretariat and representatives from ICPAS.
Reviewing of comments received
6. To facilitate an efficient and effective review,
the ICPAS’ ASC sets up standing subcommittees, comprising
both ICPAS members as well as representatives from certain key
affected or interested industries (e.g. banking, property, manufacturing,
insurance etc). These subcommittees form the core expert groups
to review and deliberate on accounting issues pertaining to their
industries.
7. After reviewing the comments received and
accounting issues in the ED, the ICPAS’ ASC subcommittees
will present their recommendations and propose draft comments
on the ED FRS or ED INT FRS to the ICPAS’ ASC for consideration.
Post exposure stage - submission of comments to the IASB
8. Upon deliberation, the ICPAS’ ASC will
forward the summary feedback and proposed comment letters to the
ICPAS Council and thereafter to the ASC for consideration.
9. Upon receiving ICPAS’ proposed comments
to the IASB documents, the ASC would then seek further feedback
from its four Committees (namely the Committee for “For-Profit”
Entities, the Committee for Charities, the Committee for Co-operative
societies and the Committee for Societies) before deciding whether
to approve the draft comment letter.
10. Once ASC approves the final draft comment
letter, the ASC secretariat will send the letter (via email) to
the IASB email account. The comment letter will also be posted
on the ASC website for public view. The ASC secretariat will send
email alerts to subscribers on the comment letters sent to the
IASB.
Issuance of final standards or interpretations
by IASB
11. After the exposure period, ASC and ICPAS
will continue to monitor the IASB’s developments to see
if there are any further changes to the proposed standard.
12. When the IASB issues the final Standard or
Interpretation, ICPAS’ ASC and its relevant subcommittees
will review the final Standard or Interpretation and consider
any changes from the earlier proposed Standard or Interpretation
during the ED stage, taking into account the impact on relevant
stakeholders and will advise the ICPAS Council and ASC on whether
the new Standard should be adopted in full or in part in Singapore.
13. The four ASC Committees will also consider
whether to adopt the standard or interpretation, in full, or with
modifications, and recommend accordingly to the ASC.
14 Upon due consideration and after seeking independent
counsel from a technical consultant, the ASC will decide whether
to prescribe the new standard or interpretation as accounting
standards in Singapore, in full or with modifications.
15. Following the ASC’s decision to adopt
an IFRS/IAS or Interpretation of IFRIC, the ASC secretariat will
also work with ICPAS in preparing the actual FRS or INT FRS to
be issued. The final approved FRS or INT FRS will be published
on the ASC website. The ASC secretariat will also send email alerts
to subscribers on the issuance of the new FRS or INT FRS.
Flowchart on prescribing accounting standards |
