Who Needs to File in XBRL Format and Who Is Exempted?
Singaporean business ethos of transparency in corporations and technological change has seen mass usage of the XBRL (eXtensible Business Reporting Language) system of filing. XBRL filing, administered by Accounting and Corporate Regulatory Authority (ACRA), allows businesses to prepare their financial statements in a standardized machine readable format.
This transition to digital reporting assists in enhancing accuracy, efficiency and availability of financial data to regulators, investors as well as other stakeholders. Not every company in Singapore must however file in XBRL format. There are those which are exempt due to the size, structure, or the type of financial statements, which also relates to the importance of financial analysis for business decision making where proper reporting supports informed decisions.
To prevent unwarranted fines and regulatory compliance, it is important to learn who should and who should not comply with XBRL submission.
XBRL Filing overview in Singapore.
ACRA introduced XBRL filing to facilitate financial reporting and increase the comparability of the data in various industries. According to this system, a company registered in Singapore is required to submit its annual financial statements online, via BizFinx preparation tool or any other legitimate platform.
This would maintain consistency in the reporting and would enable ACRA to handle and process financial data efficiently. Most of the private limited companies will be expected to do so, however the specific filing requirements will be dependent upon many factors including what type of company it is, how its financial reporting structure should be and whether or not the company is a small or exempt company.
Who Must File in XBRL Format
The XBRL filing obligations for Singapore companies apply primarily to locally incorporated companies that are required to prepare and lodge their financial statements under the Companies Act.
Companies Limited by Shares
A majority of share limited companies are required to submit the complete or simplified XBRL financial statements to ACRA. These are both the public and the private companies except those specifically exempted.
Sleeping Companies Preparation of Accounts.
Even the dormant companies which have neither conducted any business nor have had any accounting transaction must prepare the accounts in accordance with the Companies Act. In case they are obliged to prepare financial statements, they should prepare them in XBRL format unless they are subject to one of the exemption categories.
Firms That Do Not Qualify to Exempt.
The entities that surpass the thresholds of ACRA in the amount of revenue they generate, total assets, or their number of employees are required to file in XBRL. These companies usually undergo full XBRL filing, which involves extensive tagging of the financial information components, that is, assets, liabilities, and revenue components.
Firms that have Moved to Singapore Financial Reporting Standards (SFRS).
Those businesses that prepare financial statements under SFRS or under SFRS for Small Entities are usually obliged to file under the XBRL. The system will make sure that ACRA is able to compare financial information effectively among the different entities that are subject to local reporting standards.
Types of XBRL Filing
ACRA provides various filing options to meet the needs of companies of various size and complexity:
- Full XBRL: Large or non-exempt companies are supposed to be fully filled.
- Simplified XBRL: Intended to serve smaller organisations that qualify within the small company category of ACRA.
- Financial Statements Highlights (FSH): This used to be available to some non-listed or publicly-traded companies, but is currently in the process of being phased out due to updated framework provisions by ACRA.
The appropriate format will guarantee compliance and avoid filing mistakes.
Exempted Persons of XBRL Filing.
Although the majority of the companies must be in line, there are some groups of entities that are not obliged per the ACRA. The exemptions from XBRL filing under ACRA regulations depend on the nature of the company and its reporting obligations.
The Solvent Exempt Private Companies (EPCs).
There are no solvent EPCs which have less than 20 shareholders and do not have corporate shareholder; such companies are not obligated to prepare financial statements in XBRL. Rather, they are expected to make online declaration of solvency on the BizFile+ portal of ACRA.
Foreign Companies and their Branch.
Foreign firms registering branches in Singapore are not obliged to submit XBRL financial statements. They are instead required to send copies of the financial statements of their parent company in their original format of which they are filed in their home country.
Firms Under the Special Statutory Authorities.
Banks, finance companies, and insurance providers are some of the regulatory bodies whose entities are required to file their financial information in other formats as required by the Monetary Authority of Singapore (MAS). These companies are not required to submit XBRL filing by ACRA to prevent duplication.
Those Companies that are not obliged to prepare financial statements.
Under the Companies Act, some small firms are even given the exemption in preparing financial statements. Consequently, they do not have to submit in XBRL format.
How to Know Your Obligation to File.
The decision on whether to file your company in XBRL format or not will depend on the nature of incorporation and financial reporting requirements. The following is a workable guide towards assessing the filing requirement of your company:
- Check Your Company Type: Is it a private limited, exempt private or foreign company?
- File Solvency Status: Solvent exempt private companies are not required to file in XBRL.
- Standards of review of financial reporting: Companies that use SFRS usually should file in XBRL.
- Varying References Australia: Taxonomy Guide: Check the alignment of the financial data of your company with the present reporting framework.
Before submitting your filing, it is always better to make sure that a professional accountant or corporate service provider verifies your status.
Why Accurate Filing Matters
XBRL is not simply a compliance programme, it is also instrumental in transparency, corporate governance and investor confidence. Timely and correct XBRL submissions will make sure that your company will not be considered by ACRA as a bad entity and show that it is devoted to the best reporting practices.
Wrong or delayed filings may attract financial and reputational risks. Moreover, the digital systems of ACRA allow automatically identifying the inconsistency of data or its absence, and therefore one must be attentive.
XBRL Compliance Best Practice.
News of ACRA, Keeping up to date.
ACRA changes its taxonomy and filing formats periodically. Updates should be checked on a regular basis by companies to maintain compliance.
Prepare using BizFinx Preparation Tool.
BizFinx tool, a product of ACRA, is easy to enter and validate and submit. It assists in guaranteeing accuracy in tagging and mapping of financial items.
Enlist Competent Professionals.
In case your team does not have the expertise of XBRL, then you may outsource to someone who has knowledge of the needs of ACRA. Service providers who are outsourced can make submissions that are up to all technical and regulatory standards.
Conduct Internal Reviews
Always check your XBRL file before it is submitted to ensure that characters match your auditing financials.
The way Exempt Companies ought to keep in compliance.
Even exempt companies are required to have proper accounting records and other statutory requirements met. As an example, solvent exempt private companies are required to maintain a proper set of books of accounts and submit an annual return.
Otherwise, this might result in compliance violations even though they are not required to be filled with XBRL. Good documentation and reporting in a timely manner would protect the reputation of your company and will prepare it in case of any audit or regulation.
Conclusion to Who Needs to File in XBRL Format and Who Is Exempted
The XBRL framework in Singapore is key in ensuring that financial transparency and consistency remain up to date in businesses. Although the vast majority of the local companies that have been incorporated in the country have to utilize the digital filing, certain organizations are exempted due to their size, solvency, or even regulatory position.
Knowing the XBRL filing requirements of Singapore businesses and the exemptions of XBRL filing with the regulations of ACRA, companies can be sure that they will comply with the requirements and will not face the avoidable fines. Be it a small exemption private company or a large corporation, it is always important to understand your obligations under the digital reporting regime of ACRA to ensure that there is no hustle and bustle in financial reporting in Singapore in a modern business environment.
