Every businessman or prospective business man should already be familiar with the requirements of XBRL filing and ACRA filing in singapore. Singapore is widely celebrated for its business environment and has a reputation for being a tax haven. Furthermore, Singapore is ranked second in the World Bank’s ease of doing business indicator. As such it is imperative that Singapore does its best to keep an efficient and transparent corporate environment to maintain its reputation and bolster confidence in its business sector. It does so by imposing strict requirements such as the requirement of filing financial data through XBRL format, i.e XBRL filing, for all unlimited or limited companies in Singapore and these requirements come under the greater requirements imposed by ACRA, i.e ACRA filing in Singapore.
What is ACRA
ACRA (Accounting and Corporate Regulatory Authority) is the main regulatory authority for corporations existing in Singapore. It’s charged with the registration of business entities in Singapore, gathering of financial and corporate information of all these business entities, compiling and storing this financial data, then making sure all financial regulations and compliance measures are being met by the corporations, and then appropriately advising the government on any changes which should be made in registration or regulations until finally providing the public access to some of this financial and corporate data for greater corporate transparency.
ACRA’s objective is to provide greater transparency throughout Singapore, and therefore create a more efficient and sustainable business environment. It also acts as a sort of watchdog over the many corporations in Singapore making sure that there’s compliance to all of Singapore’s financial laws.
Benefits Gained by Businesses due to ACRA (acting as a regulatory authority)
ACRA’s presence in Singapore serves to galvanize the business sector and grants many benefits to the corporate sector in Singapore.
· Transparency in the Corporate Environment: as mentioned before, Singapore is massively acclaimed for having an excellent corporate environment. This is partly because of ACRA’s involvement as a watchdog above Singapore’s corporate world. All businesses have to register to ACRA and have to file their financial and statements to ACRA. ACRA for its part makes sure that all compliance measures are being met throughout Singapore.
This corporate transparency means that all current and prospective businesses can rest assured that no underhanded practices will happen in the corporate environment. The constant filing of financial statements means that the chances of grease-payments and other corruption measures getting caught are high which acts as a deterrent. This high corporate transparency creates confidence among businessmen and investors, encouraging business growth in Singapore and fostering the corporate environment
· Corporate transparency for the public: part of ACRA’s mandate is to provide limited financial and corporate information to the public. This increases corporate transparency for the public, once again fostering corporate growth. Furthermore, the public can easily gain and verify accurate information about business entities which increases their trust in the corporations, increasing investment into businesses and encourages different transactions and spending.
XBRL filing in Singapore
XBRL or eXtensible Business Reporting Language is an XML-based language format in which financial reporting can be standardised and therefore financial statements can be filed conveniently. Since 2007 ACRA has made XBRL filing mandatory for all unlimited and limited corporations for the purpose of collection of financial data and the storage of said data in a central repository. These measures were taken to increase corporate transparency. XBRL format is used for this financial reporting as it’s a standardised format that allows information to be succinctly and accurately compiled in the form of a financial statement, which can then be easily stored in a centralised repository and then the aggregated data can be easily read by the authorised personnel.
XBRL filing is mandatory for all limited and unlimited companies, except for those which are sole proprietorship, partnership, limited liability partnership, limited partnership or those companies which have received exemption.
Characteristics of XBRL filing in Singapore
· Compliance: XBRL filing is a matter of statutory compliance and must be filed by all businesses working in Singapore. It’s a requirement that must be fulfilled by all businesses which wish to countinue operating in Singapore and gain from its business environment. So any business that wishes to set up or countinue in Singapore must file their financial statements through the XBRL format and failure to do so will be non-compliance and cause actions to be taken against the offending business.
· Easy storage and transfer of information: XBRL format allows information to be compiled in a standardized form. This standardized format allows easy storage and transfer of data. As such, this data can easily be transferred through the internet to multiple agencies and be easily stored.
· Increases corporate transparency: XBRL filing gives the accurate financial information of a corporation to ACRA. Some of this data is then released to the public to increase corporate transparency. This information can then be analyzed by private citizens or financial analysts. This increases transparency and the confidence of private citizens in the business sector and therefore increases spending and investment in the business sector.