The Accounting Standards Council (“ASC”) has issued a separate set of accounting standards for use by smaller entities in Singapore. This set of standards, known as the “Singapore Financial Reporting Standard for Small Entities”, applies for accounting periods beginning on or after 1 January 2011.

Eligible entities have the option to apply the SFRS for SE or to continue to apply the full set of Singapore Financial Reporting standards (SFRS).

Q：	Who can apply SFRS for SE?
A：	An entity in Singapore is eligible to use the SFRS for SE it if is not “publicly accountable” and it is a “small entity” by virtue of satisfying 2 out of 3 of the quantitative criteria below: Total annual revenue of not more than S$10 million; Total gross assets of not more than S$10 million; Total number of employees of not more than 50.
Q：	What is “publicly accountable”?
A：	An entity is considered to be “publicly accountable” if: Its debt or equity instruments are traded in a public market or it is in the process of issuing such instruments for trading in a public market; or It is a deposit-taking entity and/or holds assets in a fiduciary capacity for a broad group of outsiders as one of its primary businesses. This is typically the case for banks, insurance companies, securities brokers/dealers, mutual funds and investment banks, or It is a public company defined under the Singapore Companies Act (Cap.50); or It is a charity defined under the Charities Act (Cap.37). An entity is eligible to apply the SFRS for SE only if it satisfied the above requirements for each of the previous 2 consecutive years. A newly incorporated company is eligible to use the SFRS for SE in the first 2 years of its incorporation provided it is not publicly accountable.
Q：	Main differences between SFRS and SFRS-SE.
A：	SFRS SFRS for Small Entities Associates Equity method required under FRS 28. Cost model available as an option. Investment Properties Cost model is available as an option but disclosure of fair value and fair value measurement required under FRS 40 and FRS 113, respectively. Cost model available as an option under property, plant and equipment if fair value measurement cannot be obtained without undue cost and or effort. No disclosure of fair value necessary if cost model is adopted. Property plant and equipment Required under FRS 1 and FRS 16. No prior year reconciliation of opening balance and closing balances required. Disclosure on financial risk management Required under FRS 107. Not required. There is also no requirement to disclose the foreign currency balances of financial assets and liabilities.
Q：	Full set of SFRS or SFRS for SE?
A：	It is very important for a business entity to do work out much in advance, whether they should be going for SFRS for SE or the complete set of SFRS. Companies must examine the following aspects before they make a decision. The Enterprise’s Growth Strategy – Find out if the company is about to surpass the size limit, Consider growth, associations, anticipate IPO, etc. Transition Costs – In case a company is already in compliance with the complete array of SFRS and is doing it well, then a switch-over to SFRS for SE would be expensive in terms of time, money and other resources. The Effect and Aftereffect – Changing to a less complicated edition of the SFRS can badly impact most of the accounting components. Also how it affects other holding enterprises or subsidiaries should also be considered. Lenders or shareholders – An enterprise should explain whether the financial lenders, institutions, or shareholders want the account as part of the complete set of SFRS. Only after this should they make a final decision.
Q：	If an entity qualifies as a small entity for any one financial year but is no longer a small entity from    the next financial year, what shall we do ?
A：	The entity has to transit to full SFRs for its financial statement for the financial year which is not qualified.