On or about 6 November 2019, the Inland Revenue Board of Singapore (IRAS) has released the second edition of the e-Tax Guide Income Tax: Income Tax Treatment Arising from Adoption of FRS 109 – Financial Instruments. It replaces the first edition published on 22 November 2017.
The revised e-Tax Guide incorporates the following updates:
- amended paragraphs 1.1, 1.2 and 2.1, and added a new footnote 1 to clarify that FRS109 tax treatment also applies to entities that adopt SFRS(I)9.
- added a footnote 15 to clarify that the tax treatment at paragraph 6.19(b) also applies to those trade receivables, contract assets and lease receivables where the impairment losses of such receivables and assets are measured using the simplified approach provided under FRS109.
- presented the information at paragraphs 7.1 to 7.4 (i.e. value of assets to be used for Total Asset Method (TAM) computation purposes under various scenarios) in a tabular form, and the scenario of taxpayers transiting from pre-FRS39 tax treatment to FRS109 tax treatment.
- renumbered footnote 23 and amended it to clarify that a taxpayer that files Form C-S can submit a written election to the CIT to use historical cost of assets for TAM purposes.
- renumbered paragraphs 7.5 and 7.6 to 7.2 and 7.3 respectively.
- amended the table at paragraph 9.3 to clarify the tax treatment for financial asset on revenue account and to rectify the tax treatment for financial asset on capital account.
- amended Annex C to rectify and clarify the formulae for certain scenarios.
For more information, please visit the IRAS website.
Source: IRAS website, 6 November 2019.