Accounting Standards Council Reminds Singapore-Listed Companies of Full IFRS Convergence in 2018 and Affirms Retention of Existing Frameworks for Other Companies

ACCOUNTING STANDARDS COUNCIL REMINDS SINGAPORE-LISTED COMPANIES OF FULL IFRS CONVERGENCE IN 2018 AND AFFIRMS RETENTION OF EXISTING FRAMEWORKS FOR OTHER COMPANIES

Singapore, 30 November 2016

The Accounting Standards Council (ASC) reminds Singapore-incorporated companies listed on the Singapore Exchange (Singapore-listed companies) of the requirement to apply a new Singapore financial reporting framework that will be identical to the International Financial Reporting Standards (full IFRS convergence) in 2018. The ASC further affirms that other Singapore-incorporated companies can continue to apply the existing financial reporting frameworks, including the Singapore Financial Reporting Standards (SFRS).

Singapore-listed companies: reminder of full IFRS convergence in 2018

2. In May 2014, the ASC announced full IFRS convergence for Singapore-listed companies. Singapore-incorporated companies that have issued, or are in the process of issuing, equity or debt instruments for trading in a public market in Singapore shall apply the new framework for annual periods beginning on or after 1 January 2018.

3. Notwithstanding paragraph 2, Singapore-incorporated companies that are in the process of issuing the aforementioned instruments are permitted to apply the new framework for annual periods beginning before 1 January 2018, if those companies are required to early apply the new framework in connection with an offer made pursuant to the Securities and Futures Act.

4. Singapore-listed companies, which are presently reporting under SFRS, will be required to apply all of the specific transition requirements in IFRS 1 ‘First-time Adoption of IFRS’ when they initially apply the new framework. It could lead to restatements of previously reported financial information in respect of the comparative periods, even though SFRS are substantially word for word IFRS. This is mainly because the transition requirements in IFRS 1 are often different from those specified in individual SFRS standards that were applied to the existing financial statements.

5. In addition, Singapore-listed companies applying the new framework will have to concurrently apply the new major IFRS standards on revenue recognition and financial instruments, which will become effective on the same date. They may also elect to early apply the new major IFRS standard on leases at the same time. These standards may have significant implications across different industries.

6. In the light of the imminent effective date, the ASC takes this opportunity to remind Singapore-listed companies to take the necessary steps to ensure that they are ready to implement the new framework and the new major IFRS standards. This entails company-specific assessment and decisions, with financial and other related implications.

Other Singapore-incorporated companies: affirmation of retention of existing frameworks

7. Other Singapore-incorporated companies may continue to apply the existing frameworks that include SFRS, or they may elect to apply the new framework.

8. Other Singapore-incorporated companies will be required to apply the new major IFRS standards as described in paragraph 5 alongside Singapore-listed companies, whether they are applying the new framework, or continuing to apply SFRS as those standards have been adopted as SFRS standards. The ASC also takes this opportunity to remind these companies to take the necessary steps to ensure that they are ready to implement these new major standards.

9. The ASC will monitor local and international developments on financial reporting and will conduct a review of the financial reporting frameworks, as necessary, in the light of these developments. The ASC is committed to ensuring that the financial reporting frameworks that it promulgates continue to be relevant and appropriate for Singapore.

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About the Accounting Standards Council

The Accounting Standards Council (ASC) is the independent accounting standard-setting body established under the Accounting Standards Act for companies, charities, co-operative societies and societies in Singapore. In carrying out its mandate, the ASC takes into account:

  • The information needs of the stakeholders of the entities;
  • Facilitation of comparability, disclosure and transparency;
  • Compatibility with relevant international standards; and
  • Singapore’s reputation as a trusted international business and financial hub.

For more information, please visit www.asc.gov.sg.

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