Knowledge Highlights 10 December 2020
On 4 December 2020, the Accounting and Corporate Regulatory Authority (“ACRA”) issued Financial Reporting Practice Guidance No. 2 of 2020 on “Areas of Review Focus for FY2020 Financial Statements Under ACRA’s Financial Reporting Surveillance Programme” (“Practice Guidance”) to publish the areas of the Financial Reporting Surveillance Programme (“FRSP”) review focus for FY2020 financial statements (“FS”) which will assist to guide directors in reviewing and approving the upcoming FS.
Under the FRSP, ACRA reviews FS of Singapore-incorporated companies for compliance with the prescribed accounting standards in Singapore.
In view of the economic and financial effects resulting from the Covid-19 situation as outlined in the Practice Guidance, ACRA’s review on FY2020 FS will focus on:
- judgements or estimates made in the areas impacted by the Covid-19 pandemic;
- assessment of the going concern assumption;
- adequacy of impairment charge and assumptions made in the assessment; and
- valuation of investment properties and financial instruments.
The overall objective of the FS is to provide financial information that is comparable and useful to a wide range of users in making economic decisions. In the current climate, directors are expected to deal with more uncertainties, particularly when making estimates or assessing cash flows/financial position. Directors are also encouraged to make disclosures beyond the requirements in the accounting standards, to inform the users of FS of the areas significantly impacted by the Covid-19 pandemic. The Practice Guidance sets out questions that can help directors identify accounting issues and deal with them.
In addition, we have a cross-disciplinary Covid-19 Legal Task Force consisting of Partners across various practice areas to provide rapid assistance. Should you have any queries, please do not hesitate to get in touch with us at firstname.lastname@example.org.