In a move designed to lower the compliance burden and promote cost-effective financial reporting, the Accounting Standards Council (ASC) has announced a significant amendment to FRS 119 Subsidiaries and Small Entities without Public Accountability: Disclosures.
This revision broadens the eligibility criteria for the standard’s reduced disclosure framework. Small entities that do not have public accountability and currently report under full Singapore Financial Reporting Standards (FRS) may now opt to apply FRS 119. The new eligibility thresholds are directly aligned with those used for the SFRS for Small Entities, creating a unified access point for simplified reporting.
Key Implications for Reporting Entities
The amendment presents two clear pathways for eligible entities to enhance their reporting efficiency:
- For entities already applying full FRS: Organisations that meet the revised criteria can immediately adopt FRS 119. This transition is expected to yield significant operational benefits by reducing the time, cost, and effort associated with preparing full disclosures. By focusing on the most material information, entities can produce financial statements that offer greater clarity on key performance aspects.
- For entities applying the SFRS for Small Entities: These entities now have a strategic option to one-time transition to the full FRS framework while utilising the reduced disclosures of FRS 119. This approach combines the simplicity of a disclosure exemption with the widespread recognition and comparability of the full FRS framework, which is often more familiar to investors, lenders, and other users of financial statements.
A Move Towards Proportionality
A spokesperson for the ASC stated that the amendment underscores a commitment to “proportionality in financial reporting.” The change acknowledges that the cost of preparing extensive disclosures can be disproportionate to the benefits for smaller entities without public accountability, while still ensuring the availability of high-quality, decision-useful information.
Key Takeaways:
- Amendment: FRS 119 eligibility criteria have been revised, effective immediately, and aligned with the SFRS for SE.
- Eligibility: Small entities without public accountability reporting under full FRS.
- Benefit: Significant reduction in reporting burden (time, cost, effort).
- Outcome: Enhanced clarity and focus on material information in financial statements.
Source: ASC, 18 August 2025.