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Following the issuance of the suite of consolidation standards, namely International Financial Reporting Standard (IFRS) 10, 11 and 12, the ISCA Financial Reporting Committee set up an IFRS 10 Working Group (the Working Group) in 2011, comprising experienced technical accounting professionals from the large public accounting firms. The Working Group was tasked to look into potential application issues of the consolidation standards (FRS 110, 111 and 112) in Singapore and also to undertake outreach efforts for the Singapore accountancy profession.
In November 2011, an introductory article on IFRS 10, 11 and 12 was published on ICPAS’ CPA Journal. Please click here to read more.
In March 2013, two seminars were organised for the general public and for companies with investments in unit trusts and funds, with the support of the Working Group members. Please click here to read more.
The Working Group has identified investments in Real Estate Investment Trusts (REITs) as one industry that would likely be significantly impacted upon adoption of the consolidation standards, largely due to its unique structure in Singapore as compared to that of other jurisdictions. Currently, most, if not all of the investments in REITs are not consolidated by their sponsors in Singapore under the requirements in FRS 27 (2009) Consolidated and Separate Financial Statements. However, this may not be the case under FRS 110 Consolidated Financial Statements which comes into effect for financial periods beginning on or after 1 January 2014.
In addressing this matter, the Working Group held several consultative dialogues with regulators and stakeholders from the REITs industry to better understand the challenges faced in the application of FRS 110. Robust discussions were also carried out within the Working Group. After due deliberations and considerations, the Working Group developed this guidance to help assess whether sponsors have control over REITs.
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