Unaudited Financial Statements in Singapore Accounting Service

Unaudited Financial Statements in Singapore

Unaudited financial statements are essential for businesses in Singapore to maintain transparency and meet regulatory requirements without undergoing a full audit. These statements provide an overview of a company’s financial health and are often required for annual filing, bank loan applications, and business planning.

What Are Unaudited Financial Statements?

Unaudited financial statements are financial reports that have not been examined by an external auditor. They typically include:

• Statement of Financial Position (Balance Sheet): A summary of a company’s assets, liabilities, and equity.
• Statement of Comprehensive Income (Profit & Loss Statement): A record of revenues, expenses, and net profit or loss.
• Statement of Changes in Equity: Displays movements in the company’s equity during a specific period.
• Cash Flow Statement: Tracks cash inflows and outflows from operating, investing, and financing activities.
• Notes to Financial Statements: Additional details and disclosures about financial data.

Why Are Unaudited Financial Statements Important?

1. Compliance with ACRA Requirements
   • Companies in Singapore must file unaudited financial statements as part of their Annual Return submission to the Accounting and Corporate Regulatory Authority (ACRA).
2. Simplified Financial Reporting
   • Small and medium enterprises (SMEs) that qualify as exempt private companies (EPCs) are not required to conduct statutory audits, making unaudited financial statements a cost-effective alternative.
3. Business Decision-Making
   • These statements help business owners assess financial performance, manage expenses, and plan for growth.
4. Loan and Grant Applications
   • Banks and financial institutions often require unaudited financial statements when reviewing loan or financing applications.
5. Tax Compliance
   • The Inland Revenue Authority of Singapore (IRAS) requires accurate financial statements for corporate tax filing and GST reporting.

Who Needs Unaudited Financial Statements?

• Exempt Private Companies (EPCs): Companies with fewer than 20 shareholders and no corporate shareholders.
• Small Companies: Companies that meet at least two of the following criteria:
  • Annual revenue of SGD 10 million or less.
  • Total assets of SGD 10 million or less.
  • Fewer than 50 employees.
• Startups and SMEs: Businesses that are not legally required to conduct audits but still need financial transparency.
• Foreign Companies with Local Branches: To comply with Singapore’s financial reporting regulations.

How to Prepare Unaudited Financial Statements

1. Organize Financial Records
   • Gather all transaction records, including invoices, receipts, and bank statements.
2. Prepare the Profit & Loss Statement
   • Categorize revenues and expenses to determine net profit or loss.
3. Compile the Balance Sheet
   • List all assets, liabilities, and equity to reflect the company’s financial position.
4. Draft the Cash Flow Statement
   • Document all cash transactions to track liquidity and financial health.
5. Ensure Compliance with Singapore Financial Reporting Standards (SFRS)
   • Follow local accounting guidelines to maintain accuracy and transparency.
6. Engage a Professional Accountant
   • Hiring a qualified accountant or accounting firm ensures accuracy and compliance with ACRA and IRAS regulations.

Why Engage Professional Accounting Services?

• Accuracy & Compliance: Professional accountants ensure financial statements adhere to Singapore Financial Reporting Standards (SFRS).
• Time-Saving: Businesses can focus on operations while experts handle financial reporting.
• Risk Mitigation: Reduces errors and prevents non-compliance penalties.
• Expert Advice: Accountants provide financial insights to enhance decision-making.

Conclusion

Unaudited financial statements are essential for businesses in Singapore to maintain compliance, assess financial performance, and secure funding. Engaging professional accounting services ensures accurate and compliant financial reporting. For expert assistance with unaudited financial statements, visit Singapore Accounting Service.