Singapore’s Accounting Standards Committee (ASC) has issued a steady flow of new and amended standards since 2024. Some are already in force and others start on 1 January 2027. The ASC has kept FRS and SFRS(I) effective dates in step with the IASB’s dates for the matching IFRS Accounting Standards. This article sets out what has changed, when each change applies and what finance teams of private companies should do now.
At a glance: key changes and effective dates
| Standard | Change | Effective for annual periods beginning on or after | Who is affected |
|---|---|---|---|
| FRS 1 / SFRS(I) 1-1 | Classification of liabilities as current or non-current; non-current liabilities with covenants | 1 January 2024 | Companies with borrowings, especially loans with covenants |
| FRS 116 / SFRS(I) 16 | Lease liability in a sale and leaseback | 1 January 2024 | Seller-lessees in sale and leaseback deals with variable payments |
| FRS 7 and FRS 107 | Disclosures on supplier finance arrangements | 1 January 2024 | Companies using reverse factoring or supply chain finance |
| FRS 21 | Lack of exchangeability | 1 January 2025 | Companies with transactions in currencies that cannot readily be exchanged |
| FRS 109 and FRS 107 | Classification and measurement of financial instruments | 1 January 2026 | Companies settling payments electronically, or holding loans with ESG-linked or similar features |
| FRS 109 and FRS 107 | Contracts referencing nature-dependent electricity | 1 January 2026 | Buyers of solar or wind power under power purchase agreements |
| Various | Annual Improvements to FRSs, Volume 11 | 1 January 2026 | All FRS reporters (minor clarifications) |
| FRS 118 / SFRS(I) 18 | Presentation and Disclosure in Financial Statements, replacing FRS 1 | 1 January 2027 | All FRS and SFRS(I) reporters |
| FRS 119 (as amended) | Subsidiaries and Small Entities without Public Accountability: Disclosures (optional reduced disclosures) | 1 January 2027 | Eligible subsidiaries and small private companies |
| FRS 21 / SFRS(I) 1-21 | Translation to a hyperinflationary presentation currency | 1 January 2027 | Groups with operations in hyperinflationary economies |
| SFRS for Small Entities (third edition) | Revised small-entity framework aligned with the third edition of the IFRS for SMEs | 1 January 2027 | Companies reporting under SFRS for Small Entities |
The changes that matter most for SMEs
1. Loan covenants and current/non-current classification (2024)
A liability is non-current only if, at the reporting date, the company has a right to defer settlement for at least 12 months. Covenants that must be met after year-end do not affect that classification, but the company must disclose information that helps readers judge the risk of the loan becoming repayable early. Review facility agreements every year, because a breach at or before year-end can still move a loan into current liabilities.
2. Supplier finance disclosures (2024)
Companies using supplier finance or reverse factoring must disclose the terms of these arrangements, the amounts involved, the range of payment due dates, and the effect on cash flows and liquidity risk. Banks and investors want visibility of working capital that these arrangements may otherwise obscure.
3. Financial instruments amendments (2026)
The amendments clarify when a financial liability settled through an electronic payment system can be derecognised. They also explain whether loans with contingent features, such as interest rates linked to sustainability targets, still pass the “solely payments of principal and interest” test. New disclosures cover these instruments and equity investments designated at fair value through other comprehensive income. A related amendment helps buyers of renewable electricity under nature-dependent contracts apply own-use and hedge accounting.
4. Optional reduced disclosures under FRS 119 (2027)
This is likely the most useful change for many private companies. In August 2025 the ASC widened FRS 119 so that eligible small entities, not only subsidiaries, can use it. Qualifying companies keep full FRS recognition and measurement but present far fewer disclosures. A small entity qualifies if it has no public accountability, is not a public company or registered charity, and publishes general purpose financial statements. It must also meet at least two of three size tests: revenue of S$10 million or less, total assets of S$10 million or less, and 50 or fewer employees, in each of the two previous consecutive periods. Using FRS 119 is voluntary, and early application is permitted.
5. FRS 118 replaces FRS 1 (2027)
FRS 118 introduces defined subtotals in the profit or loss statement, disclosures for management-defined performance measures, and tighter rules on how information is grouped. Because 2026 comparatives will need to be restated, companies should start planning now. See our separate article on IFRS 18 for more detail.
Other developments to note
- In August 2025 the ASC issued the third edition of the SFRS for Small Entities, effective 1 January 2027. It follows the IASB’s third edition of the IFRS for SMEs, with revised sections on revenue, financial instruments, fair value measurement, consolidation and business combinations.
- In August 2026 the ASC issued amendments to FRS 28 on the fair value option for investments in associates and joint ventures. Check the effective date on the ASC website before applying them.
- The ASC withdrew Practice Statement 1 (Management Commentary) from the FRS framework with effect from 24 June 2025.
What to do now
- Review loan agreements and covenant tests, and make sure classification and disclosures in your 2025 and 2026 financial statements are complete.
- List any supplier finance, reverse factoring or electronic payment arrangements, and collect the data needed for disclosure.
- Check whether any loans or receivables have ESG-linked or other contingent features, and reassess their classification.
- Test whether your company meets the FRS 119 criteria for the two periods before 2027, and decide whether to adopt reduced disclosures, including early adoption.
- If you report under SFRS for Small Entities, assess the effect of the third edition, particularly on revenue recognition.
- Plan the move to FRS 118: map your chart of accounts to the new categories and prepare restated 2026 comparatives.
- Update accounting policies, financial statement templates and board reporting timelines.
How we can help
Every company’s circumstances are different. If you would like to discuss how these changes affect your financial statements and your next audit, please contact K.S. NG & Co at enquiries@ksng.com.sg.
Information in this article is correct as at October 2026.