Who Needs to File Financial Statements

ACRA Financial Statement Filing

All Singapore (SG) incorporated companies are required to file financial statements (FS) with ACRA, except for those which are exempted.

Financial Statements

Financial statements are essential tools that provide a clear picture of a company's financial health. They are formal records of the financial activities and position of a business. Here's a breakdown of the key aspects:

Purpose of Financial Statements:

Provide Information:
- They offer insights into a company's performance, financial position, and cash flows.
- This information is crucial for various stakeholders, including investors, creditors, and management.
Aid in Decision-Making:
- Financial statements help stakeholders make informed decisions about investments, lending, and business operations.
Ensure Transparency:
- They promote transparency and accountability by providing a standardized way to report financial information.

Key Types of Financial Statements:

Balance Sheet:
- A snapshot of a company's assets, liabilities, and equity at a specific point in time.
- It shows what a company owns (assets), what it owes (liabilities), and the owners' stake in the company (equity).
Income Statement (Profit and Loss Statement):
- Reports a company's revenues, expenses, and profits over a specific period.
- It reveals how much profit or loss a company has generated.
Cash Flow Statement:
- Tracks the movement of cash into and out of a company during a specific period.
- It categorizes cash flows into operating, investing, and financing activities.
Statement of Changes in Equity:
- This statement shows the changes in equity of the company over a stated period.

Importance:

For Investors:
- To assess a company's profitability and financial stability.
For Creditors:
- To evaluate a company's ability to repay debts.
For Management:
- To monitor financial performance and make strategic decisions.
For Regulatory Compliance:
- In many jurisdictions, companies are legally required to produce financial statements.

In essence, financial statements are vital for understanding a company's financial health and making informed decisions.

Who Needs to File Financial Statements - ACRA

Based on the information from the Accounting and Corporate Regulatory Authority (ACRA) of Singapore, here's a breakdown of who needs to file financial statements:

Singapore-incorporated companies:
- Generally, all Singapore-incorporated companies are required to file financial statements with ACRA, with some exceptions.
- The specific filing requirements, particularly concerning XBRL (eXtensible Business Reporting Language) format, vary depending on the company's size, nature, and whether it's an exempt private company (EPC).
- Specifically:
  - There are different rules for solvent and insolvent exempt private companies.
  - Companies in the banking, finance, and insurance sectors regulated by the Monetary Authority of Singapore (MAS) have specific filing requirements.
Exemptions:
- There are exemptions for certain companies, such as solvent exempt private companies, under certain circumstances.
Entities that do not file financial Statements with ACRA:
- Sole proprietorships, partnerships, limited liability partnerships, and limited partnerships are generally not required to file financial statements with ACRA.

Key points to remember:

XBRL filing is a significant aspect of financial statement submission for many companies.

XBRL Filing Requirements

Understanding XBRL filing requirements in Singapore, as mandated by ACRA, is essential for companies operating there. Here's a breakdown of the key aspects:

What is XBRL?

XBRL (eXtensible Business Reporting Language) is a standardized, electronic format for financial reporting. It allows for the efficient exchange of financial information.

Who Needs to File?

Generally, Singapore-incorporated companies are required to file their financial statements in XBRL format.
However, there are exemptions, particularly for certain solvent exempt private companies.
The specifics of filing depend on factors like company size and industry.

Key Filing Aspects:

Templates:
- ACRA provides various XBRL templates, including:
  - Full XBRL template: For more comprehensive reporting.
  - Simplified XBRL template: For smaller, non-publicly accountable companies.
  - Specific templates for sectors like banking and insurance.
BizFinx Tool:
- ACRA offers the BizFinx preparation tool to assist companies in creating their XBRL financial statements.
Filing Process:
- XBRL filings are typically submitted through ACRA's BizFile+ portal, often in conjunction with the company's annual return.
Important Considerations:
- The level of detail required in XBRL filings can vary.

Key Considerations:
- The extent of XBRL filing varies depending on the company's size and nature.
- There are specific requirements for companies in regulated sectors like banking, finance, and insurance.

Companies	Requirements
Smaller and non-publicly accountable companies	To file FS in Simplified XBRL template, together with PDF copy of FS authorised by directors
All other companies	To file FS in Full XBRL template. Please attach a PDF copy of the FS authorised by directors as part of the Annual Return filing.
Smaller and non-publicly accountable exempt private companies (EPCs) that are insolvent	To file FS in Simplified XBRL template, together with PDF copy of FS authorised by directors
All other exempt private companies (EPCs) that are insolvent	To file FS in Full XBRL template
EPCs that are solvent	Not required to file FS.
Companies in the business of banking, finance and insurance regulated by MAS	To file FS in: XBRL FSH (Banks) template; or XBRL FSH (Insurance) template; together with PDF copy of the FS authorised by directors.
Companies preparing FS using accounting standards other than Singapore accounting standards or IFRS	To file only PDF copy of the FS authorised by directors.
Companies limited by guarantee	To file only PDF copy of the FS authorised by directors.
Branches	To file only PDF copy of the FS authorised by directors.

Definition of Smaller Company

In Singapore, when referring to "smaller companies" in the context of ACRA regulations, particularly regarding audit exemptions, it's defined by specific criteria. Here's a breakdown:

Key Criteria:
- A "small company" must meet the following two quantitative criteria for the financial year:
  - Total annual revenue of not more than $500,000.
  - Total assets of not more than $500,000.
Important Considerations:
- If a company is part of a group, the entire group must also meet "small group" criteria.

Therefore, the definition of a "smaller company" in this context is not simply based on a subjective assessment, but on these clear, measurable financial metrics.

Definition of Non-Publicly Accountable Company

According to information from ACRA, a "non-publicly accountable company" is defined as follows:

Core Definition:
- It's a company that is not:
  - Listed or in the process of issuing debt or equity instruments for trading on a securities exchange in Singapore.
  - A company whose securities are listed on an exchange outside Singapore.
  - A specified financial institution.
In simpler terms:
- Essentially, it refers to companies that are not publicly traded and are not within the regulated financial sector.

This distinction is important in the context of financial reporting requirements, as it often determines the level of detail and the specific format (like Simplified XBRL) required for financial statement submissions.

Definition of Solvent Exempt Private Company

When discussing "solvent exempt private companies" (EPCs) in Singapore, it's essential to break down the components of that term:

Exempt Private Company (EPC):
- This is a specific type of private company in Singapore. Key characteristics include:
  - Generally, having no more than 20 members.
  - No corporation holds beneficial interest in its shares.
  - A private company wholly owned by the Government can also be an EPC.
Solvent:
- This means the company is able to pay its debts as and when they fall due. In essence, it's financially healthy and not facing insolvency.

Therefore, a "solvent exempt private company" is an EPC that is financially capable of meeting its obligations.

Here's how this relates to ACRA filing:

Solvent EPCs have certain exemptions from mandatory financial statement filing.
Specifically, solvent EPCs are not required to file financial statements with ACRA. They are required to make an online declaration of solvency.
It is important to understand that if an EPC is insolvent, they will be required to file financial statements.

Key takeaway: The "solvent" aspect of the term is crucial, as it determines the company's filing obligations.

Where to Find More Information:

The most reliable source for detailed and current information is the official ACRA website (acra.gov.sg).

How Bestar can Help

Bestar offers a comprehensive suite of services designed to help businesses navigate the complexities of Singapore's regulatory landscape. Here's a breakdown of how we can assist:

Key Services:

Company Incorporation and Registration:
- Bestar guides businesses through the entire company incorporation process, ensuring compliance with ACRA's requirements.
- This includes handling necessary documentation, name reservation, and online submissions through the BizFile+ portal.
ACRA Filings:
- We assist with the preparation and filing of financial statements and annual returns with ACRA, ensuring adherence to deadlines and reporting requirements.
Corporate Secretarial Services:
- Bestar provides corporate secretarial services, which are essential for maintaining compliance with statutory obligations.
Accounting and Bookkeeping:
- We offer accounting and bookkeeping services to help businesses maintain accurate financial records.
Tax Advisory and Compliance:
- Bestar assists with corporate income tax filings and provides tax planning and optimization strategies.
- We also assist with GST compliance.
Audit and Assurance:
- We provide audit and assurance services.
Business Advisory Services:
- We give advice regarding many aspects of running a business in Singapore.

How Bestar Helps:

Expertise and Knowledge:
- We possess up-to-date knowledge of ACRA regulations, filing procedures, and compliance requirements.
Streamlined Process:
- We handle paperwork and online submissions, reducing the administrative burden for businesses.
Compliance Assurance:
- We ensure filings are accurate and timely, helping businesses avoid penalties.