Financial Statements

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Struggling to understand what is and how to prepare financial statements?

Financial Statements are formal records of the financial activities and position of a business for the year which can be audited or unaudited. At Mi2u, we provide support in preparing the financial statements correctly to meet the regulatory and business needs.

What are the reporting standards?

Companies are required to prepare their Financial Statements in accordance with Singapore Financial Reporting Standards (“SFRS”) and International Financial Reporting Standards (“IFRS”).

I have done my profit/loss and balance sheet accounts, why do I need to prepare Financial Statements and what is this about?

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

Financial statements are written records that convey the business activities and the financial performance of a company.

Whereas the balance sheet provides an overview of assets, liabilities, and shareholders’ equity as a snapshot in time, they only form part of the Financial Statements.

The complete set of Financial Statements contains:

  • Statement by Directors
  • Statement of Financial Position as at the end of the year
  • Statement of Comprehensive Income for the year
  • Statement of Changes in Equity for the year
  • Statement of Cash Flows for the year
  • Notes to Financial Statements containing a summary of significant accounting policies and other explanatory information

My company is small and not making profit, why do I need this Financial Statements?

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

Directors’ Duties in relation to Financial Reporting

Under section 201 of the Companies Act, directors are responsible to present and lay before the company, at its annual general meeting, financial statements that:

  •  Comply with Accounting Standards issued by the International Financial Reporting Standards (IFRS); and
  •  Give a true and fair view of the profit and loss, and the state of affairs of the company. 

In addition, directors of a company incorporated in Singapore are responsible to maintain a system of internal accounting controls and keep proper accounting and other records that will enable the preparation of true and fair profit and loss accounts and balance-sheets under section 199 of the Act, respectively.

What is the difference between audited and unaudited financial statements?

Financial Statements can be prepared either audited or unaudited for the purpose of filing the Company’s annual tax returns to IRAS and annual returns to ACRA.

Audited Financial Statements has the audit opinion in it while unaudited Financial Statements do not include that.