The Singapore Accounting Standards Council (ASC) announced in late May 2014 that all Singapore-incorporated companies on the Singapore Exchange (SGX) must apply a new financial reporting framework identical to the International Financial Reporting Standards (IFRS) for annual periods beginning on or after 1 January 2018. This translates into a lead time of more than 3 years to embrace the new financial reporting framework.
The SGX will be working closely with the ASC to engage SGX-listed companies on the transition to the new framework. The ASC will also continue working with the Monetary Authority of Singapore and the SGX on related issues, including whether and when to extend this new financial reporting framework to other entities listed on the SGX, such as real estate investment trusts and business trusts, as well as the transition arrangements for entities seeking to list on the SGX.
Full convergence of the Singapore Financial Reporting Standards with IFRS for Singapore-listed companies is a strategic direction that the ASC set in 2009. Following this, the ASC actively engaged and worked with the International Accounting Standards Board on a number of issues to enable full convergence with IFRS to be effected.
Commentators have noted that the move towards full convergence with IFRS will place SGX-listed companies on a level playing field with their counterparts in the IFRS community, allowing companies and investors alike to benefit from the comparability offered when global standards are applied, and eliminating any perception that such companies may be applying standards that are different from IFRS. SGX- listed companies also stand to benefit as a single set of accounting standards will allow such companies to reduce the costs of preparing financial statements, especially for companies that are listed or have operations in multiple jurisdictions.