Singapore’s Accounting and Corporate Regulatory Authority (ACRA) has opened a consultation on a proposed financial reporting framework for co-operative societies.
The consultation is being conducted jointly by the Registry of Co-operative Societies (RCS) and ACRA’s Accounting Standards Committee (ASC).
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They are seeking views from Singapore co-operatives on the accounting framework they should use when preparing financial statements.
The Accounting Standards Council has issued four financial reporting frameworks tailored to different entity types.
They are- Singapore Financial Reporting Standards (International) (SFRS(I); Singapore Financial Reporting Standards (SFRS); Singapore Financial Reporting Standards for Small Entities (SFRS for SEs); and Charities Accounting Standard (CAS).
The Co-operative Societies Act requires co-operatives to apply the relevant frameworks issued by the ASC.
However, the ASC has not previously set a specific framework for co-operatives.
Most co-operatives currently use SFRS, while only a small number use the small entities standard.
The RCS and ASC have proposed making SFRS the single financial reporting framework for all co-operatives.
The proposed effective date will be decided after the consultation. Co-operatives would receive at least two years’ notice before the requirement comes into force.
Co-operatives that currently apply the small entities standard and want to continue doing so would be allowed to do so until the ASC issues further advice.
The bodies have also proposed incorporating IFRIC 2 Members’ Shares in Co-operative Entities and Similar Instruments1 into SFRS.
The proposal is part of the ASC’s broader aim to align its financial reporting frameworks with IFRS Accounting Standards. It could require some co-operatives to reclassify members’ shares from equity to financial liabilities.
