Basics of financial year-end closing & compliance alert
As we approach year end, it’s again time to focus on the various procedures and important timeline to take note of to ensure compliance with filing requirements, especially with ACRA and IRAS.
To get you started, we’ve indicated in the following paragraphs, those areas which concerns companies registered with ACRA.
When you reach the end of an accounting period, you need to close the books. At a minimum, you will close your books annually as you have to file annual return with ACRA and estimate chargeable income and corporate tax return with IRAS annually, as well as prepare financial statements for this purpose.
It is important for companies to put proper procedures in place to ensure that they meet the compliance dates. When a company defaults, its directors may be held liable for fines and penalties, in addition to the late filing fees that are imposed on the company.
Key consideration needed to be attended to for year end closing
- Perform stock (Inventory) take and make necessary adjustments relating to inventory count and ensure all inventory-related transactions are recorded (if Company has inventories);
- Observing cut-off date in recording year-end adjustments and locking periods restricting any accounting entries in accounting software after specific dates;
- Counting petty cash as at 31 Dec 2016;
- Reconcile each bank statements to cash book (banking) transactions for the fiscal year;
- Send remainders to past due trade debts and making necessary arrangements for collection;
- Send debtors statements and reconciling any difference with your trade debtors;
- Request for creditors statements and reconcile your accounts payables any differences;
- Reconcile GST control accounts and revenue to GST F 5 forms;
- Review that all revenues and expenses are recorded in the relevant year and adopting appropriate cut off procedures;
- Pass accruals of expenditure including salary, Cpf, bonuses, director fees, unpaid bills;
- Accrual of income due / unbilled income / interest on fixed deposits;
- Make adjustments for prepayment, like Insurance, advance payments for services;
- Prepayment of income received in advance;
- Providing journal adjustments for any allowances (inventory obsolescence, specific bad debts), depreciations, Interest, etc.;
- Make adjustment for any revaluation of assets, impairments, fair value adjustments on assets, etc.;
- Compute Income tax payable and make adjustments;
- Consider any dividends need to be proposed and make adjustments.
- Completion and posting of Journal entries that relate to the financial year.
- Consider for any final adjustments if any.
- Printing all relevant ledgers and back up all accounting entries.
Key filing deadlines
Submission of estimated chargeable income (‘ECI’) / Corporate Tax Return
- For Financial Year ending 31 December 2016, ECI has to be submitted to IRAS within 3 months from the date of the Company’s year-end (i.e. by end of 31 March 2017). You can pay advance tax via installments.
- Form C or Form C-S (Corporate Tax Return), tax computation together with the audited/unaudited financial statements must be submitted to IRAS by 30 November every year (Singapore adopts a preceding year basis submission).
Annual General Meeting (“AGM”)
For financial year ending 31 Dec 2016, your company will be required to hold its AGM by 30 June 2017 pursuant to Sections 175, 197 and 201 of the Companies Act.
If the Company is unable to meet the deadline for filing of AR and accounts, an extension of time can be made with ACRA before 30 June 2017.
Accountants all know too well. It is a never ending cycle.
FOOD FOR THOUGHT – WORK NEVER ENDS BUT LIFE CAN!!!
Take a balanced work, life approach and keep stress level checked to enjoy year end holidays and work to the fullest.