Financial Statements Singapore | SFRS Compliance & Year-End Accounts

A few months ago, I met a business owner in Woodlands who'd been running a wholesale trading company for three years. Revenue was about $600K annually. When I asked to see his financial statements, he pulled out a single Excel sheet with "Sales" and "Expenses" columns.

"This is what my bookkeeper gives me every year," he said. "Is this not a financial statement?"

No. That's not a financial statement. And when ACRA asked for his annual return filing, he found out the hard way. His Excel sheet got rejected. He had to pay $1,200 for someone to reconstruct proper financial statements, plus late filing penalties.

If you're running a Singapore company, you need actual financial statements. Not a profit and loss summary. Not a spreadsheet. Real financial statements that follow Singapore Financial Reporting Standards (SFRS).

This page explains what financial statements actually are, why they matter, and how to get them done properly without overpaying.

What Financial Statements Actually Mean in Singapore

Financial statements are three specific reports that show your company's financial position:

Balance Sheet: What you own (assets) and what you owe (liabilities) on a specific date. Shows if your company is solvent.

Profit and Loss Statement: Revenue minus expenses for the year. Shows if you made money or lost money.

Cash Flow Statement: Where money came from and where it went. Shows if you have cash problems even if you're profitable on paper.

Most small companies in Singapore only need the first two. The cash flow statement is required if you're a larger company or your revenue exceeds certain thresholds.

These statements must follow SFRS. That means specific formats, specific disclosures, specific notes. You can't just make up your own format.

Why You Need Financial Statements in Singapore

The Companies Act requires every Singapore company to prepare financial statements. Not optional. Every company, even if you made zero revenue unless your company is exempted.

Here's what happens if you don't have proper financial statements:

ACRA Annual Return: You can't file your annual return without financial statements in compliance with SFRS other accounting standards allowed by ACRA. Your XBRL filing will also need the financial statements. Late filing = $300-$600 penalty, plus your company gets flagged.

IRAS Tax Filing: Form C need financial statements attached. Form C-S is prepared using the information from the financial statements. No financial statements = can't file tax = estimated assessment = higher tax bill.

Bank Loans: Banks won't even look at your loan application without three years of proper financial statements. They want SFRS-compliant statements, not Excel sheets.

Investors: If you're raising money, investors want audited or at least properly prepared financial statements. A spreadsheet won't cut it.

Company Sale: Selling your business? Buyers will do due diligence. Messy or missing financial statements = lower valuation or deal falls through.

I saw a logistics company in Jurong lose a $2 million acquisition deal because their financial statements were incomplete. The buyer walked away. Three years of growth, gone, because they didn't maintain proper records.

SFRS vs FRS: What's the Difference?

Singapore Financial Reporting Standards (SFRS) replaced FRS (Financial Reporting Standards) in 2018. I

SFRS is based on International Financial Reporting Standards (IFRS). Singapore adopted IFRS with some local modifications.

For small companies, SFRS for Small Entities is simpler. Less disclosure requirements. But you still need to follow the framework.

Most accounting software (Xero, QuickBooks) can generate reports that look like financial statements. But those reports aren't SFRS-compliant because there are many other disclosures and information that has to be included in the financial statements. This is where chartered accountants come in.

Accounting Firm Standards: What Good Financial Statements Look Like

When we prepare financial statements at our firm, here's what's included:

Director's Statement: A signed statement by directors declaring the financial statements show a true and fair view. Required by Companies Act.

Balance Sheet: Properly classified assets and liabilities. Current vs non-current. Trade receivables, inventory, fixed assets, all presented correctly.

Profit and Loss: Revenue recognized properly. Expenses categorized correctly. Depreciation calculated. Tax provision included.

Notes to Financial Statements: Explanation of accounting policies, breakdown of significant items, related party transactions, contingent liabilities.

An accounting firm that knows what they're doing will prepare all this. A cheap bookkeeper who just uses Excel? They won't. You'll find out when ACRA rejects your filing.

I worked at KPMG and Deloitte. Big companies pay more than $50,000-$200,000 for financial statement preparation. But small companies don't need that level. You need SFRS compliance, proper formatting, and someone who knows the rules. That's what we provide.

Tax Preparation Service Requirements for Financial Statements

Your tax filing depends entirely on your financial statements. IRAS doesn't just take your word for how much profit you made. They want to see the numbers.

ECI Filing: Within 3 months of year-end, you estimate your chargeable income. That estimate should come from your management accounts or draft financial statements. Guessing randomly = trouble later.

Form C-S Filing: Simplified tax return. You need completed financial statements before you can file this. IRAS might not ask for the statements upfront, but they can request them anytime within 5 years.

Form C Filing: Full tax return. You must attach financial statements, tax computation, and supporting schedules. No financial statements = can't file.

Tax Audit: If IRAS audits you (and they do random audits), they'll ask for your financial statements and supporting documents. If your statements are messy or don't match your tax filing, you're in trouble.

One client in Tampines filed Form C-S for three years without proper financial statements. Just estimated everything. IRAS audited them. Found discrepancies. Assessed additional tax of $12,000 plus penalties. All because they tried to save $1,500 per year on proper accounting.

Bookkeeping Service vs Financial Statement Preparation

Bookkeeping and financial statement preparation are different things.

Bookkeeping: Recording transactions daily or monthly. Categoriwing expenses. Reconciling bank accounts. Tracking who owes you money. Ongoing work.

Financial Statement Preparation: Taking a full year of bookkeeping data, making adjusting entries, calculating depreciation, recognizing revenue properly, preparing the three statements in SFRS format. Year-end work.

You need both. Good bookkeeping makes financial statement preparation faster and cheaper. Bad bookkeeping means we spend extra time cleaning up your data, which costs you more.

If you're doing monthly bookkeeping with us, your year-end financial statements take about 7 days to prepare. If you hand us a shoebox of receipts in November, it takes more than 4 weeks and costs triple.

One e-commerce seller in Bedok did not do any bookkeeping for the entire year. Sales through Shopee, Lazada, own website. PayPal, bank transfers, credit card payments. No records. When we tried to prepare financial statements, we had to reconstruct everything from marketplace reports and bank statements. Cost him $3,000 in accounting fees for what should have been $800.

Why do you need Singapore Chartered Accountants to prepare your Financial Statements

We know SFRS: The standards change. New pronouncements come out. Interpretation changes. We attend annual training. We know what's required.

We know what IRAS and ACRA want: We've dealt with hundreds of filings. We know what triggers questions. We know how to present items to avoid issues.

I've seen financial statements prepared by non-qualified "accountants" that had:

• Amounts don't cotninue properly from the closing numbers from prior year
• Missing disclosures
• Expenses combined together to avoid more work
• No depreciation on fixed assets
• Related party transactions not disclosed
• Director's loans not properly recorded

When IRAS or ACRA caught these, the companies faced penalties. The "accountant" said "not my fault." The company paid the price.

With a chartered accountant, if there's an error, we fix it at our cost. That's the difference.

Different Types of Financial Statements for Different Companies

Not all companies need the same level of financial statements.

Dormant Companies: No transactions all year. You still need financial statements showing zero activity. Simple, but must be done unless your company is exempted.

Small Companies (Revenue < $10M): Can use SFRS for Small Entities. Simpler disclosure requirements. This covers most SMEs.

Medium/Large Companies: Must use full SFRS. More complex disclosures. Usually require audit.

Listed Companies: Must use full SFRS and get audited. Not relevant for most SMEs.

Consolidated Statements: If you own subsidiaries, you might need group financial statements. This is complex. Most small companies don't need this unless they have holding-subsidiary structures.

I had a client with three related companies doing similar business. They thought they needed consolidated statements. We reviewed the structure and determined they didn't meet the consolidation criteria. Saved them $5,000 in unnecessary work.

Common Mistakes in Singapore Financial Statements

Here are mistakes I see regularly:

Wrong Financial Year End: Statements prepared for wrong period. This happens when directors change FYE without realising the implications.

Missing Director's Statement: Must be signed by at least two directors (or one director if only one director). Otherwise, you are not meeting ACRA's requirements

XBRL Errors: Format doesn't match ACRA's taxonomy. Common when people try to prepare XBRL themselves without proper software.

Revenue Recognition Issues: Recording sales before goods delivered or services completed. Big issue for construction and project-based companies.

No Depreciation: Fixed assets just sit on the balance sheet forever with no depreciation. Wrong under SFRS.

Personal Expenses in Company: Director's personal expenses recorded as company expenses. This inflates expenses and reduces profit artificially. Tax risk.

No Provision for Tax: Profit and loss should include a provision for income tax. Many DIY statements miss this.

A renovation company in Geylang prepared their own financial statements for two years. When they applied for a bank loan, the bank rejected it. Reason? The statements didn't comply with SFRS. The bank couldn't use them for credit assessment. They had to pay us to redo two years of statements. Cost $4,000. Could have been $2,000 total if done right the first time.

How Long Does Financial Statement Preparation Take?

Depends on your record-keeping.

• Good records, monthly bookkeeping: 1-5 days
• Okay records, quarterly bookkeeping: 5-10 days
• Messy records, annual catch-up: 4 weeks

We promise completion within 28 days. Usually deliver in 7 days for companies with decent records.

If you're in a rush (bank loan deadline, investor meeting), we can do it faster. Add 25% for 3-week delivery, 50% for 2-week delivery, 100% for 1-week delivery.

Most companies can wait 28 days. Some can't. We give you the option.

What Financial Statement Preparation Actually Costs

• Small companies (< $200K revenue): $800-$1,500
• Medium companies ($200K-$1M revenue): $1,500-$3,000
• Larger companies (> $1M revenue): $3,000-$5,000+

This includes:

• Preparing balance sheet and profit and loss
• Preparing notes to financial statements
• Preparing director's statement

Not included:

• Bookkeeping (should be done separately)
• Audit (if required, that's separate)
• Tax filing (separate service)

If you do monthly bookkeeping with us, year-end financial statements are cheaper because the numbers are already clean. If you only come once a year, it's more expensive because we're doing 12 months of cleanup at once.

One F&B business in Ang Mo Kio paid $2,500 for financial statements because they had no bookkeeping done all year. Next year, they switched to monthly bookkeeping ($400/month). Their year-end statements dropped to $1,000 because everything was already organised. They actually spent less overall and got better visibility into their business monthly.

XBRL Filing Requirements

ACRA requires financial statements in XBRL format unless exempted

There are two XBRL options:

Full XBRL: Complete financial statements with all notes and disclosures. Required for larger companies.

Simplified XBRL: Abridged statements with minimal disclosures. Small companies can use this.

Most SMEs use Simplified XBRL. It's faster and cheaper.

You can't just convert a PDF to XBRL. The data must be tagged correctly according to ACRA's taxonomy. This requires proper software and knowledge of the taxonomy structure.

We handle XBRL filing as part of our financial statement service. You don't need to understand the technical details. We prepare the statements, convert to XBRL, and file with ACRA.

When You Need Audited Financial Statements

Most small companies don't need an audit. But you need audit if:

• Revenue > $10 million
• Assets > $10 million
• Employees > 50

If you meet two out of three criteria above, you need an audit.

Also, even if you don't legally need an audit, some situations require it:

• Bank loan requirement
• Investor requirement
• Parent company requirement (if you're a subsidiary)
• Voluntary audit for better governance

Audit is separate from financial statement preparation. We prepare the statements, then an audit firm audits them. Audit costs $5,000-$15,000+ depending on company size.

We don't do audits (we're not an audit firm), but we work with several audit firms. We prepare the statements properly so the audit goes smoothly. This saves you audit fees because auditors spend less time fixing errors.

Financial Statements for Different Industries

Trading Companies: Big focus on inventory valuation and cost of goods sold. Inventory count must be accurate at year-end.

Service Companies: Revenue recognition is key. When do you recognize revenue - when you invoice or when you deliver the service?

F&B Businesses: Cash handling, daily takings, inventory wastage. These need special attention in financial statements.

Construction Companies: Project-based revenue recognition. Percentage of completion method. Complex.

E-commerce: Multiple sales channels, returns, marketplace fees. Revenue must be recorded net of these fees.

Professional Services: Work-in-progress, unbilled services. These must be recognized in financial statements even if not yet invoiced.

Each industry has specific SFRS requirements for revenue recognition and expense treatment. A good chartered accountant knows these differences.

Getting Your Financial Statements Done Right

Here's what you need to provide us:

• Balance Sheet
• Profit and Loss
• Receivables listing Sales that have not been received yet
• Payables listing Expenses that have not been paid yet
• PPE listing What equipment/vehicles you bought, original cost, purchase date.
• Stock count Year-end inventory count (for trading companies).
• General Ledger and Trial Balance Money taken out or put into the company.

You can usually extract these from your accounting software or bookkeeping records.

We'll review everything, make adjusting entries, prepare the statements in SFRS format, and deliver within 7-28 days depending on data quality.

Then you review, sign the director's statement, and we file with ACRA.

Simple process if your records are organized. Painful if they're not.

Why Businesses Choose Us for Financial Statements

"My previous accountant took 6 weeks and I still had to chase them."

"You explained what every line in the balance sheet actually means."

"Bank accepted your financial statements immediately. They rejected the ones I prepared myself."

"You caught errors my old accountant made for two years."

We're a team of ACCA and SQP top graduates, ex-Big 4 audit managers, and Singapore Chartered Accountants. We know SFRS inside out. We respond within 1 hour, not 1 day. We deliver in 7 days, not months.