Unaudited Financial Statements in Singapore
What Every Business Needs to Know
Most businesses know they need to submit financial statements. Fewer understand what to include in financial statements, or what happens when something is missing.
A profit and loss report and balance sheet from Xero or QuickBooks are not financial statements. It is a useful tool, but it is not what ACRA and IRAS expect to see. Unaudited financial statements in Singapore must meet specific requirements under SFRS (Singapore Financial Reporting Standards), and the responsibility for getting this right sits with the directors, not the company accountant.
This article explains who needs to prepare unaudited financial statements, what to include in financial statements and what the consequences are when something falls short.
Who Must Prepare Unaudited Financial Statements in Singapore
Every company incorporated in Singapore must prepare financial statements. There are no exemptions from preparation.
To qualify for unaudited financial statements rather than a full statutory audit, your company must meet at least two out of three criteria under the small company framework for the past two consecutive financial years:
Annual revenue of S$10 million or less
Total assets of S$10 million or less
50 employees or fewer
You can verify the full criteria on the ACRA website.
If your company is part of a group, the entire group must also qualify as a small group on a consolidated basis. A Singapore subsidiary cannot claim the exemption if the wider group exceeds the thresholds.
Not Every Company Has To File with ACRA
Preparing unaudited financial statements and filing them with ACRA are two separate obligations. This is where many directors get confused.
All companies must prepare financial statements. But certain companies are exempt from filing them with ACRA. These include:
Dormant companies that have had no accounting transactions during the financial year
Solvent exempt private companies that meet specific criteria under the Companies Act
An exempt private company is a private company with no more than 20 shareholders, all of whom are individuals (not corporations). If it is solvent, an exempt private company may be exempt from filing unaudited financial statements with ACRA. However, it must still prepare those financial statements and maintain proper accounting records. Exempt status does not reduce the company’s obligation to keep accurate and complete financial records.
You can read more about ACRA's record keeping requirements here.
What to Include in Financial Statements in Singapore
This is where most businesses fall short. Knowing what to include in financial statements is not optional knowledge for directors. Under SFRS Singapore, specifically the Singapore Financial Reporting Standards for Small Entities, unaudited financial statements must contain six components:
1. Statement of Comprehensive Income
Your company's revenue, expenses and profit or loss for the financial year. This is what most people think of as the P&L, but it must be prepared to SFRS Singapore standards, not simply exported from your accounting software.
2. Statement of Financial Position
Also known as the balance sheet. A snapshot of your company's assets, liabilities and equity at the financial year end.
3. Statement of Changes in Equity
Shows how the equity in the business has moved during the year, including retained earnings and any distributions made.
4. Statement of Cash Flows
Tracks the actual movement of cash in and out of the business. This is separate from profit and loss and often reveals things about a business that the income statement does not.
5. Notes to the Financial Statements
This is where the detail lives. Notes explain the accounting policies used, break down significant line items and disclose anything material that affects how the statements should be read. Incomplete notes are one of the most common issues we see.
6. Director’s Statement
This one surprises most business owners. A director must sign a director’s statement confirming that the unaudited financial statements give a true and fair view of the company's affairs and that the company is solvent. This is a legal declaration, not a formality. The director responsibilities involved are significant and cannot be delegated.
Common Mistakes and What They Cost You
The most frequent issues we see:
Submitting a P&L export without understanding what to include in financial statements
Missing or incomplete notes to the financial statements
No director’s statement included
Figures that do not reconcile with tax filings or GST returns
Unaudited financial statements prepared under the wrong accounting standard
Exempt private company status assumed to mean no preparation is required
In the event of a tax audit, IRAS will use the company’s unaudited financial statements as the baseline for its review.
Inconsistencies between your statements, your ECI filing, Company tax filing (Form C/c-s) and your payroll records increase your audit risk significantly. Read more about what triggers an IRAS audit in Singapore.
Errors also affect your ability to secure bank loans, apply for government grants or demonstrate solvency to a prospective partner or investor.
When and Where Financial Statements Are Used
Unaudited financial statements feed directly into several compliance obligations:
Annual return filing with ACRA, completed within a set period after your financial year end
Corporate tax filing with IRAS, including your ECI submission and Form C or C-S. Read more in our corporate tax guide
Banking and financing applications, where lenders require a full set of statements prepared to SFRS Singapore standards
Government grant applications, which often require properly prepared unaudited financial statements
For a full picture of your filing deadlines, refer to our Singapore compliance calendar.
What This Means for Your Audit Risk
Incomplete unaudited financial statements are one of the most consistent factors behind an IRAS audit. When statements show unexplained fluctuations, missing notes or figures that do not align with other filings, they attract attention.
SFRS Singapore compliance is not just a technical requirement. It is what makes your statements defensible if IRAS asks questions. Read more about managing your audit risk in Singapore.
Free Checklist: Is Your Financial Statement Complete?
Before you file, use this checklist to verify your unaudited financial statements cover everything required:
Statement of comprehensive income prepared to SFRS Singapore standards
Statement of financial position included
Statement of changes in equity included
Statement of cash flows included
Notes to the financial statements complete and accurate
director’s statement signed by an authorised director
Figures reconciled against ECI filing and GST returns
Exempt private company or dormant status confirmed if claiming a filing exemption
Frequently Asked Questions
What to include in financial statements in Singapore?
Unaudited financial statements must include six components:
A statement of comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes to the financial statements
A director’s statement
A P&L report alone does not meet ACRA or IRAS requirements.
What is a director's statement?
A director’s statement is a signed legal declaration confirming that the unaudited financial statements give a true and fair view of the company's affairs and that the company is solvent. It is a required component of every set of financial statements in Singapore and cannot be delegated.
What is an exempt private company in Singapore?
An exempt private company is a private company with no more than 20 shareholders, none of whom are corporations. A solvent exempt private company may be exempt from filing unaudited financial statements with ACRA, but it must still prepare them.
What is SFRS Singapore?
SFRS Singapore refers to the Singapore Financial Reporting Standards. Most small companies use SFRS for Small Entities, a simplified version designed to reduce compliance burden without compromising accuracy. All unaudited financial statements must comply with this framework.
What happens if financial statements are wrong?
Inaccurate unaudited financial statements can trigger an IRAS audit, delay your annual return, affect access to banking facilities and expose directors to personal liability for signing an incorrect director’s statement.
Do I need an accountant to prepare financial statements in Singapore?
You are not legally required to use an accountant, but unaudited financial statements must comply with SFRS Singapore standards. Most directors do not have the technical knowledge to prepare compliant statements without professional support, and errors carry real consequences.
If you are unsure whether your unaudited financial statements are complete and compliant, book a complimentary call with one of our advisors. We will review your current position and tell you exactly what needs attention.