Making a painless transition in IFRS convergence in Singapore
June 8, 2014 Leave a comment
PUBLISHED JUNE 03, 2014
Making a painless transition in IFRS convergence
MAK KEAT MENG
ON May 29, 2014, the Singapore Accounting Standards Council (ASC) announced that Singapore-incorporated companies listed on the Singapore Exchange (SGX) will apply a new financial reporting framework identical to the International Financial Reporting Standards (IFRS) in 2018.
This landmark announcement is not surprising as it marks an important milestone for Singapore on the path towards full convergence together with other economies such as Australia and Hong Kong.
It is a timely move as IFRS has quintessentially become the de facto language for financial reporting around the world. Although the SFRS (Singapore Financial Reporting Standards) issued by the ASC are already closely aligned to the IFRS, this strategic initiative will further propel and establish Singapore entities in the global arena in line with other international players.
Numerous studies have demonstrated the benefits of a single global accounting standard for both developing and developed markets. The use of one set of high quality standards by companies globally will lead to an improvement in comparability and the transparency of financial information across different jurisdictions, and reduce the costs of preparing financial statements. A consistent and rigorous application of these standards will make the evaluation of similar companies across different countries by capital market participants easier and, in the process, enable better decision making.
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