With less than one year to go before deadline (January 2018), it seems many Singapore-based companies are still scratching their heads on how to adopt the new accounting standards that will shake up how they report their revenue.
 
Based on an EY poll of 53 finance executives based in Singapore, only 2% said they were ‘ready’ for FRS 115 adoption. Over half (60%) admitted they had yet to decide how they are going to tackle it.
 
FRS 115 is the Singaporean version of  international equivalent IFRS 15. It basically aims to tackle inconsistencies in how companies recognise revenue for contracts set up with their customers.
 
“This is different from the current risks-and-rewards model that requires different treatments depending on the type and form of the transactions,” EY wrote in a February 16 report based on the survey.

According to EY, when companies adopt FRS 115 in 2018, they will need to restate the “affected comparative financial information as though they have always applied FRS 115 (the full retrospective approach) unless they elect the option of not restating comparative information (the modified retrospective approach)”.  The latter option is only available to non-listed Singaporean companies.

Respondents to the poll were mostly concerned about implementating management and financial reporting processes, with one third raising the flag.
 
“Respondents also believed that apart from the finance and tax functions that need to be active in the implementation, other teams such as internal and external auditors (17%), sales and marketing (12%) and IT (11%) will need to be involved in the process as well,” EY said.