What the IT Sector Must Know about Financial Reporting
Unless exempted, every company in Singapore is required to file financial statements to ACRA. IT companies are no exception. These financial statements must comply with SFRS (Singapore Financial Reporting Standards) and present a true and fair picture of the performance and financial position of the company.
If you are running an IT company or have just started one, you should know about financial reporting in Singapore. Here are a few intricacies you’ll need to keep in mind:-
Based on your company’s financial transactions and activities like investment, operations, marketing efforts, assets, and liabilities, everything must be included in your annual financial statements according to the Financial Reporting Standards of Singapore.
If you are incurring a massive number of transactions each day, which most probably is the case since it’s the IT sector, accounting or bookkeeping softwares are highly recommended. These softwares act like your business’s journal and can help you record everything down to the first and last receipt, income, or expense.
Once your financial statements are ready, you’ll have to get these audited if your company meets any 2 of the below 3 conditions:-
- The total annual revenue is exceeding S$10 million
- The total assets are exceeding S$10 million
- The company has more than 50 employees
The Annual General Meeting (AGM)
Next, you need to hold an Annual General Meeting (AGM). ACRA, the accounting, and regulatory authority, has laid down several filing requirements for companies operating in Singapore. One of which states that every calendar year, the company’s directors must hold at least one AGM. Here are some general rules applying to AGM’s:-
- The first AGM must be held within 18 months of the company’s incorporation
- Two subsequent AGMs should not have more than 15 months time lapse between them
- Accounts or financial statements presented at the AGM must have a date of not more than 6 months before the meeting. For instance, if your AGM date is in September, the date of financial statements must not be prior to March.
- Only private companies are allowed to dispense with AGMs. However, to do that, all the company directors must pass a resolution to that effect.
The Filing of Annual Return with ACRA
Whether public or private, every company in Singapore must file an annual return with ACRA within 1 month of its AGM. Here’s what you need to include in the annual return:-
- Particulars of company officers or directors
- Registered address
- Auditors, if applicable
- Financial statements in the XBRL format
Need Help Preparing Financial Statements in the XBRL Format?
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