The Statement of Financial Position, often referred to as the balance sheet, is a core financial statement that details a company’s financial standing at a specific date. For Singapore companies, this statement is prepared in compliance with the Singapore Financial Reporting Standards (SFRS). It provides comprehensive insights into what the company owns (assets), owes (liabilities), and the shareholder interests (equity), enabling stakeholders to assess financial health, liquidity, and capital structure accurately.
Overview of Singapore Financial Reporting Standards
The Singapore Financial Reporting Standards (SFRS) set forth by the Accounting Standards Council (ASC) and regulated by the Accounting and Corporate Regulatory Authority (ACRA) ensure that financial reporting is transparent and consistent across companies in Singapore. These standards largely align with the International Financial Reporting Standards (IFRS), with specific adaptations for local regulations.
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The guideline for the Statement of Financial Position presentation is SB-FRS 1: Presentation of Financial Statements (effective from January 2023), which outlines the format, classification, and disclosure requirements for the statement.
Core Elements of the Statement of Financial Position in SingaporeAssets
Assets represent resources controlled by the company, expected to generate future economic benefits. Assets are classified into:
- Current Assets: Assets expected to be converted into cash or consumed within 12 months or one operating cycle, whichever is longer. This includes:
- Cash and cash equivalents (e.g., bank balances, petty cash)
- Trade and other receivables (amounts owed by customers)
- Inventories (goods held for sale)
- Prepaid expenses (payments made in advance)
- Non-Current Assets: Assets with a useful life extending beyond one year, not intended for sale in normal business operations:
- Property, Plant & Equipment (PPE) such as buildings, machinery, and vehicles
- Intangible assets like trademarks, patents, and goodwill
- Long-term investments and deferred tax assets
| Asset Category | Description | Singapore Examples |
|---|---|---|
| Current Assets | Resources liquid within 12 months | Cash, Trade Receivables, Inventory |
| Non-Current Assets | Long-term assets held over a year | Buildings, Machinery, Intangible Assets |
Liabilities
Liabilities indicate the company’s financial obligations, split into:
- Current Liabilities: Debts and payments due within 12 months, such as:
- Trade payables (amounts owed to suppliers)
- Accrued expenses (incurred but unpaid costs)
- Short-term borrowings or bank overdrafts
- Non-Current Liabilities: Obligations payable beyond 12 months, including:
- Long-term loans and debentures
- Deferred tax liabilities
- Lease liabilities under lease accounting standards
| Liability Type | Description | Singapore Examples |
|---|---|---|
| Current Liabilities | Obligations settled within 12 months | Trade Payables, Short-term Loans |
| Non-Current Liabilities | Debts payable over longer than 12 months | Long-term Bank Loans, Deferred Taxes |
Equity
Equity represents the owners’ residual interest in the business:
- Share Capital: Funds raised from issuing shares to shareholders
- Retained Earnings: Accumulated profits reinvested instead of distributed as dividends
- Other Reserves: Includes revaluation surplus, share premium, and translation reserves
Detailed Example: Singapore Company’s Statement of Financial Position (in SGD)
| Assets | Amount (SGD) | Liabilities and Equity | Amount (SGD) |
|---|---|---|---|
| Cash and Cash Equivalents | 800,000 | Trade Payables | 380,000 |
| Trade Receivables | 520,000 | Accrued Expenses | 120,000 |
| Inventories | 450,000 | Short-Term Loans | 140,000 |
| Property, Plant & Equipment | 1,500,000 | Long-Term Debt | 710,000 |
| Intangible Assets | 550,000 | Share Capital | 900,000 |
| Retained Earnings | 1,160,000 | ||
| Total Assets | 3,820,000 | Total Liabilities & Equity | 3,820,000 |
This statement aligns with the SB-FRS 1 presentation format, reinforcing transparency and consistency across Singapore’s financial reporting ecosystem.
Importance of the Statement of Financial Position for Singapore Businesses
- Compliance with Singapore Laws and Regulations: Singapore companies must comply with requirements set by ACRA and ASC to uphold corporate governance and statutory transparency.
- Management and Investor Decision-Making: The statement enables assessment of liquidity ratios like current ratio, leverage ratios (debt to equity), and informs strategic decisions such as capital restructuring or investment planning.
- Financial Health Monitoring: By regularly reviewing assets and liabilities, businesses can proactively manage cash flows, debt servicing, and growth capital.
- External Reporting and Tax Filing: Accurate financial statements compliant with SFRS form the basis for tax filings with the Inland Revenue Authority of Singapore (IRAS) and fulfil audit services and reporting requisites.
According to ACRA’s 2025 reports, upwards of 87% of Singapore-registered companies consistently meet statutory financial reporting deadlines, reflecting the critical role of quality financial statements in local business operations.
Advanced Reporting Considerations in Singapore
- Consolidated Statements: For business groups, consolidated Statements of Financial Position are mandatory, reflecting the aggregate assets, liabilities, and equity while eliminating intra-group balances.
- Fair Value and Impairment Testing: Singapore’s SFRS incorporates fair value measurement, especially for investment properties and financial instruments. Impairment reviews ensure asset values reflect current market conditions.
- Lease Accounting under SFRS(I) 16: Lessees must recognise lease liabilities and right-of-use assets on balance sheets, which materially affect liabilities and asset profiles.
- Deferred Tax Accounting: Detailed disclosure of deferred tax assets and liabilities is required, emphasising timing differences between accounting profits and taxable income.
Conclusion
The Statement of Financial Position prepared under Singapore’s SFRS framework is integral for accurate financial disclosure, regulatory compliance, and business strategy formulation. For Singapore businesses seeking expert guidance on preparing or enhancing these critical reports, DTL Accounting Group offers professional tax and accounting services, together with advisory services tailored to local regulatory demands.
Take your financial reporting to the next level by visiting us and engaging our experts today. Proper financial statements empower your company to thrive confidently in Singapore’s competitive market landscape.
