GEARED TOWARDS EXCELLENCE
As the aviation industry grew, so did the demand for experts and specialists who are instrumental in developing technologies and imparting knowledge for new generations to build on.
In the same way, ISCA’s technical departments and committees work to promote higher excellence standards for the accountancy profession.
Through the work of ISCA’s technical departments and committees, the Institute contributes to technical excellence for the accountancy profession. Through our outreach efforts and technical resources, we facilitate the implementation and application of standards. We shape the formulation of accounting, auditing and ethical standards globally via comment letters on exposure drafts to the IASB, International Auditing and Assurance Standards Board (IAASB) and International Ethics Standards Board for Accountants (IESBA) for deliberation in their standard-setting process.
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ISCA’s Corporate Reporting Committee (CRC) seeks to play a leading role in raising awareness and understanding of SR and advancing the quality of SR in Singapore. The CRC’s objectives are executed through two working groups (WG) – the SR Awareness WG and the SR Quality WG. These WGs engage stakeholders through a range of initiatives to raise awareness, facilitate sharing of SR knowledge/experience and develop guidance to uplift the quality of SR in Singapore.
Below are some of ISCA’s key initiatives in championing sustainability.
ISCA SR Implementation Roadmap
ISCA, through its CRC and SR Quality WG, developed the Sustainability Reporting Implementation Roadmap to help new or early-stage SR adopters kick-start their SR journey. The SR Roadmap is designed to promote thinking and discussion around SR, and helps early adopters decide which aspects of sustainability are most important to their business. The SR Roadmap provides practical guidance on the implementation process, includes a compilation of questions asked by the early-stage SR implementers in the market, and provides step-by-step guidance by breaking down the process into six phases – planning, materiality assessment, target setting, date collection, report preparation and assurance.
Chief Financial Officers for SR – ISCA SR Roundtable and Sustainability Roundtable Report
ISCA, through its SR Awareness Working Group, held the CFO SR Roundtable, where CFOs from various organisations discussed the role of CFOs in spearheading sustainability within their organisations. It was also a platform for participants to discuss the challenges faced in spearheading sustainability and how these challenges can be overcome.
ISCA developed the ISCA Sustainability Roundtable Report – CFOs for SR to share the various takeaways gleaned from the roundtable. The report centred on seven areas – CFOs are well-placed to drive sustainability; Sustainability enhances and complements the CFO’s function; Challenges to sustainable business practices; Breaking down the silos; Sustainability is about survival; Education is crucial; and What makes a good sustainability report.
ISCA SR Seminar - The “How To” of Implementing SGX SR Guide
ISCA organised the 2017 SR Seminar “The ‘How To’ of implementing SGX SR Guide” on 18 September 2017. The aim of the CRC Seminar was to share the “how-to’s” of implementing the SGX SR Guide and the pivotal role that CFOs play in spearheading the sustainability practice in their organisations. In attendance were 190 participants, many of them finance professionals and representatives from listed and non-listed companies. The seminar featured a sterling line-up of speakers and panellists with a wealth of experience in SR.
Panel Discussion – The Value of Sustainability Reporting
ISCA held a panel discussion on SR titled: “The Value of Sustainability Reporting” at SAAC 2017. The panel discussion was held to shed light on the profession’s place within the SR eco-system, the value of assurance to the entire SR process, and what investors are looking out for.
For financial periods beginning on or after 1 January 2018, full IFRS Convergence is required for Singapore-incorporated companies listed on SGX. Although the existing Singapore Financial Reporting Standards (SFRS) are closely modeled after IFRS, there may be a need for companies to adjust prior years’ financial numbers when they make the switch from SFRS to IFRS. This is because IFRS Convergence requires the adoption of IFRS 1 First-Time Adoption of International Financial Reporting Standards, a standard that specifies how an entity should transition to IFRS. Thus, as a first step towards IFRS Convergence, listed companies would need to assess the impact of IFRS 1 on their financial statements.
ISCA, through its Financial Reporting Committee (FRC) Core Sub-Committee, developed the IFRS Convergence 2018 Implementation Roadmap in collaboration with the Singapore Institute of Directors to provide guidance on how to navigate the maze of accounting change that the IFRS Convergence exercise requires. The roadmap includes a bird’s eye view of IFRS Convergence and a step-by-step application guide of IFRS 1 on areas that would impact entities the most – business combination; attribution of total comprehensive income, including deficit balances, to controlling interests; goodwill and fair value adjustments arising on acquisition of foreign operations; cumulative translation differences; deemed cost exemption for property, plant and equipment and investment property; and capitalisation of borrowing costs on qualifying assets.
In view of the directors’ crucial role in providing strategic direction and oversight to management, the roadmap provides key questions that directors should ask management and guides them on what they need to do to ensure management adopts the right thought processes and action plans. The roadmap also provides management, CFOs and their finance teams with actions required for IFRS convergence.
An ISCA poll conducted from August to September 2017 showed that many of the 235 listed companies surveyed still have some preparations to do to be ready for IFRS Convergence. The roadmap will help entities get back on track towards IFRS convergence. Both the poll results and the roadmap were featured at the SAAC 2017.
Revenue recognition for sale of uncompleted residential properties has always been judgmental, considering the unique structure of the industry and also existing regulations in Singapore. This Guidance discusses the application of the new Revenue standard (FRS 115) and the consensus reached by ISCA’s FRC, on the sale of uncompleted properties under the standard Sales and Purchases Agreement. The Guidance delves into “over time or point in time revenue recognition”, focusing on paragraph 35(c) of FRS 115. The areas discussed include whether the developer has an enforceable right to payment for performance completed to date, and the likely outcomes of revenue recognition for certain real estate sales commonly seen in Singapore.
FRS 115 introduces a new revenue-recognition model based on “transfer of control” instead of the existing “transfer of risk and reward”. FRS 115 is effective for annual periods beginning on or after 1 January 2018. The new revenue recognition model may change the existing revenue recognition policies and pose challenges to businesses with long-term contracts and/or contracts comprising multiple performance obligations.
In view of the impact this would have on various industries, ISCA’s FRC held dialogue sessions with representatives from the following industries – contract manufacturing, construction of industrial assets, real estate development, and transportation and logistics. These sessions were facilitated by ISCA’s FRC members and subject matter experts, Mr Reinhard Klemmer, Partner and Technical Head, KPMG Singapore; Ms Kok Moi Lre, Partner, PwC LLP; Ms Soh Lin Leng, Partner, Deloitte & Touche LLP; and Mr Tan Seng Choon, Partner, E&Y LLP. Participants from large conglomerates such as Keppel to corporates such as Hi-P International, City Developments and BW Marine had candid and lively discussions, sharing their existing market practices and how the application of FRS 115 might change the way revenue and related costs are currently accounted for.
2017 marks the third cycle of ISCA’s collaboration with ACRA on the review of Financial Statements under ACRA’s Financial Reporting Surveillance Programme (FRSP). ISCA and ACRA see mutual benefits in the sharing of expertise and resources through the collaboration to enhance the quality of corporate financial reporting in Singapore. The primary objective of the FRSP is to guide directors in complying with the prescribed accounting standards in Singapore.
On average, ISCA’s technical departments receive and respond to about 200 queries from members each year. In 2017, there was an increase of more than 40% in the number of queries received, of which 60% related to financial reporting, 29% related to audit and assurance, and the remaining 11% related to ethics and other technical matters. There was an increased number of queries on application of the new Revenue and Leases accounting standards, in addition to queries relating to business combinations, functional currency and financial instruments. Increasingly the queries pertain to more complex application of the accounting standard principles and require the exercise of judgement.
In addition, we issued 6 technical bites (tech bites) in 2017 to provide insights on some common topical issues encountered in the application of FRS 2, FRS 16, FRS 21, FRS 24, FRS 40 and FRS 110. These tech bites also feature the application of principles and the exercise of judgement in resolving those issues.
Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT)
ISCA continued to support the profession’s implementation of strong AML and CFT measures, which are part of Singapore’s efforts to combat money laundering and financing of terrorism. Arising from the Financial Action Task Force (FATF) Mutual Evaluation Report of Singapore, ISCA made some amendments to EP 200 to address the findings and clarify existing requirements and guidelines. ISCA also revised customer due diligence (CDD) templates and forms in EP 200 Implementation Guidance 2 to incorporate the new requirements and enhancements to make the templates more useful.
ISCA Ethics Seminar 2017
ISCA held the ISCA Ethics Seminar: Do the Right Thing – Get in Tune with the Latest Ethics Standards on 28 June 2017. Attended by about 260 participants, the Ethics Seminar covered current hot topics and developments in ethics and AML and CFT.
At the Ethics Seminar, participants were updated on upcoming developments to EP 100 ISCA Code of Professional Conduct and Ethics and current developments in ethics on the international front. In one of the segments, a legal expert covered the legal aspects of whistleblowing, such as whether current legislations accorded protection to whistleblowers. Given the recent amendments to EP 200, one of the seminar segments provided an update on the amendments to EP 200. Practical AML and CFT issues, such as the extent of due diligence checks for customers, were also covered in that segment.
A Question-and-Answer Session held at the end of the seminar gave participants an opportunity to seek clarification from the speakers.
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