Mastering the intricacies of financial reporting, particularly eXtensible Business Reporting Language (XBRL) filing in Singapore, presents a formidable challenge. This blog aims to demystify XBRL filing, offering a comprehensive overview encompassing its significance, filing requirements, and nuances as mandated by the Accounting and Corporate Regulatory Authority (ACRA). By the conclusion, readers will possess a thorough understanding of effectively reporting their company’s financial data.
Understanding XBRL Filing:
XBRL, or eXtensible Business Reporting Language, stands as a standardized format facilitating the exchange of financial data between companies and regulatory bodies. In Singapore, ACRA imposes stringent XBRL filing requirements, emphasizing the responsibility of company directors to submit precise financial statements. Since November 1, 2007, virtually all incorporated companies in Singapore have been mandated, with limited exceptions, to submit their financial statements to ACRA in XBRL format.
The implementation of the XBRL format streamlines financial reporting and analysis for both corporations and regulators. It fosters efficient data exchange, establishing a common platform for data comparison and assessment. This systematic approach promotes transparency and adherence to Singapore financial reporting standards (SFRS).
XBRL Filing Requirements in Singapore:
The Corporate Regulatory Authority (ACRA) plays a pivotal role in enforcing XBRL filing regulations within Singapore. Businesses operating within the jurisdiction are obligated to comply with these stipulations, regardless of whether they are limited or unlimited by shares.
The following sections delineate the specific requirements for various company types and the requisite financial statements to be filed in XBRL format.
Mandatory XBRL Filing:
With few exceptions, all incorporated companies in Singapore are obligated to file their financial statements in XBRL format with ACRA. This mandate, effective since November 1, 2007, ensures consistent and accessible reporting of financial data for regulators, investors, and stakeholders.
Non-compliance with XBRL filing mandates may result in penalties, including late filing fees ranging from $300 to $500, contingent upon the severity of the infraction. Moreover, repeated violations by companies and directors may lead to disqualification from directorship.
Exemptions from XBRL Filing:
XBRL filing exemptions are designed to alleviate regulatory burdens for specific business categories, such as dormant companies and insolvent Exempt Private Companies (EPCs). To qualify for the exemption, a company must meet the conditions stipulated in Section 201A of the Companies Act and fulfil the criteria for dormant status, indicating negligible income generation or trading activity.
Directors need to verify their company’s eligibility for exemptions to avert penalties for non-compliance with XBRL format requirements.
Required Financial Statements for XBRL Filing:
ACRA mandates the submission of specific financial statements in XBRL format, including:
- Balance sheet
- Income statement
- Cash flow statement
- Statement of changes in equity
These statements, commonly referred to as financial highlights, constitute essential components of comprehensive financial reporting, accurately reflecting a company’s financial performance and standing. Stakeholders derive invaluable insights into the company’s overall health by scrutinizing these financial highlights.
Adhering to the XBRL format for financial statement submission ensures facile accessibility and comparability of data for regulators, investors, and stakeholders. This standardized approach contributes to heightened transparency and compliance with SFRS.
XBRL Filing Deadlines:
XBRL filing deadlines in Singapore are contingent upon the company’s classification. Listed companies face a five-month deadline, while non-listed entities are afforded a seven-month timeframe. Failure to adhere to these deadlines may result in penalties, including late filing fees ranging from $300 to $500, depending on the gravity of the breach.
Companies seeking deadline extensions may initiate the process by accessing ACRA’s online VCC registration and filing Portal. Upon selecting the ‘Extension of Time’ option under ‘eServices,’ companies can submit their extension applications. The processing duration for these applications may extend up to 14 working days, underscoring the importance of meticulous planning to circumvent potential penalties.
Diverse XBRL Filing Formats:
ACRA offers four distinct XBRL filing formats to accommodate the varying needs of different industries and businesses. These formats include:
- Full XBRL
- Simplified XBRL
- XBRL FSH for Banks
- XBRL FSH for Insurance
Each format is tailored to specific reporting requirements, ensuring precise and compliant financial data submission. The subsequent sections delve into the intricacies of each XBRL filing format and elucidate their respective applications.
1. Full XBRL:
The Full XBRL template caters to companies necessitating comprehensive financial statement filing, incorporating primary statements and selected financial notes. Boasting approximately 210 data elements, this comprehensive template offers a detailed portrayal of a company’s financial performance and standing.
Full XBRL filing empowers companies to:
- Upload primary statement and selected notes data
- Ensure precise financial data reporting
- Facilitate accessible data retrieval for regulators, investors, and stakeholders
2. Simplified XBRL:
Tailored for smaller enterprises and non-publicly traded companies, the Simplified XBRL template offers a more streamlined filing option. Encompassing approximately 120 data elements, this format provides a succinct avenue for filing essential financial data in XBRL format, complemented by a full set of financial statements in PDF format.
Employing the Simplified XBRL template affords flexibility to businesses requiring expedient financial statement filing, thereby conserving time and resources.
3. XBRL FSH for Banks:
XBRL FSH for banks represents a specialized XBRL filing format catering to the unique reporting requisites of banks in Singapore. Comprising approximately 80 data elements, this format ensures a structured and standardized presentation of financial data pertinent to banks, facilitating regulatory compliance and operational transparency.
4. XBRL FSH for Insurance:
Designed to enhance reporting efficacy for insurance firms, XBRL FSH for insurance furnishes a template featuring approximately 80 data elements. This format comprehensively captures financial performance and standing information, facilitating seamless and expeditious reporting for insurance companies.
Leveraging XBRL FSH for insurance offers the following benefits:
- Regulatory compliance facilitation
- Standardized financial data presentation
- Enhanced data comparability and analysis for regulators, investors, and stakeholders
XBRL Filing Process in Singapore:
XBRL filing in Singapore adheres to a systematic process encompassing financial statement preparation in XBRL format via the BizFinx preparation tool, followed by document submission through the FS Manager. This structured approach ensures compliance with ACRA’s XBRL filing directives, culminating in accurate and accessible financial data reporting.
The BizFinx preparation tool, a complimentary application provided by ACRA, aids companies in preparing their financial statements in XBRL format. By following the provided workflow, companies, including foreign entities, can populate the XBRL templates for income statements and other financial statements. Once the financial statements are meticulously prepared in XBRL format, companies can initiate the submission process through the FS Manager, a web-based application enabling XBRL financial statement submission to ACRA.
Embracing this step-by-step approach ensures precise financial data reporting and adherence to Singapore’s XBRL filing stipulations. Moreover, it facilitates streamlined financial reporting and seamless access to financial information for all pertinent stakeholders.
Documentation for Full XBRL Financial Reporting:
Full XBRL reporting necessitates the preparation of specific documents, including:
- Balance sheet
- Auditor’s reports
- Income statement
- Cash flow statement
- Director’s report
These documents comprehensively encapsulate a company’s financial performance and standing, ensuring accurate and compliant data submission.
To prepare financial statements for Full XBRL reporting, companies must execute the following steps:
- Map the line items in their financial statements to the pertinent concepts within the ACRA Taxonomy
- Download the BizFinx preparation tool from ACRA’s official website
- Follow the provided workflow to complete the fields in the XBRL templates for income statements and other financial statements
This meticulous approach to document preparation for Full XBRL reporting ensures:
- Precise financial data reporting
- Accessibility for all pertinent stakeholders
- Standardized data format enhancing transparency and compliance with Singapore financial reporting standards
Outsourcing XBRL Filing:
Pros and Cons: Outsourcing XBRL filing entails enlisting a third-party provider or employing reliable accounting software to manage the preparation and submission of financial statements in XBRL format. While this approach can yield time and resource savings, fees may vary based on the provider and service level. However, outsourcing may also entail certain drawbacks, including diminished control over the process, potential for errors, and additional costs.
The benefits of outsourcing XBRL filing encompass:
- Workload reduction
- Cost-effectiveness
- Access to XBRL expertise
- Ability to focus on core business activities
- Expense reduction
By engaging a third-party provider, foreign companies can mitigate the burden of XBRL filing and ensure compliance with Singapore’s regulatory directives.
Before outsourcing XBRL filing, companies should meticulously weigh the advantages and disadvantages vis-à-vis their specific requirements and resources. This holistic assessment facilitates informed decision-making, ensuring accurate and compliant financial reporting.
In summary, comprehending and adhering to XBRL filing requisites in Singapore is imperative for companies to guarantee precise and transparent reporting. By exploring diverse filing formats, such as Full XBRL, Simplified XBRL, and XBRL FSH for banks and insurance companies, businesses can opt for the most suitable option aligned with their needs. Adhering to the step-by-step XBRL filing process, companies can ensure meticulous reporting of financial data, readily accessible to regulators, investors, and stakeholders. Whether opting for outsourcing or in-house handling of XBRL filing, companies must meticulously evaluate the pros and cons to arrive at the optimal solution for their organization.