Technical Update – March 2021
SINGAPORE
1. Financial Reporting
1.1 ISCA issues FRB 8 “COVID-19 Government Relief Measures: Accounting for Foreign Worker Levy Waiver & Rebate”
As part of the Solidarity Budget announced on 6 April 2020, the Singapore Government provided business employers who hire foreign workers on work permits and S-passes with Foreign Worker Levy (“FWL”) waiver and FWL rebate to ease the labour costs of such firms during the circuit breaker period. The FWL waiver and FWL rebate were extended and enhanced in subsequent Budgets and Ministry of Manpower Press Releases.
INTERNATIONAL
1. Audit and Assurance
1.1 International Auditing and Assurance Standards Board (IAASB) issues quality management standards
nternational Standard on Quality Management (ISQM) 1, Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements; ISQM 2, Engagement Quality Reviews; and International Standard on Auditing 220 (Revised), Quality Management for an Audit of Financial Statements. On 17 December 2020, the International Auditing and Assurance Standards Board (IAASB) released its three quality management standards. The three quality management standards are as follows: The standards are effective from 15 December 2022.
Click here for more information.
The Institute of Singapore Chartered Accountants (ISCA) issued Financial Reporting Bulletin (FRB) 8 on 24 December 2020 to provide accounting guidance and key considerations on how to account for the FWL waiver and FWL rebate granted.
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2. Financial Reporting
2.1 IASB proposes new IFRS Standard to give investors a more complete picture of the financial performance of rate-regulated companies
On 28 January 2021, the International Accounting Standards Board (IASB) published an exposure draft (ED) on proposals for a new accounting standard that would require companies subject to rate regulation to give investors better information about their financial performance. The proposed Standard would replace the IFRS 14 Regulatory Deferral Accounts. The deadline for comments on the ED is 30 June 2021. To access the ED Regulatory Assets and Regulatory Liabilities, click here. To access the overview of the proposals that introduces the proposed requirements, click here.
3. Ethics
On 14 January 2021, the International Ethics Standards Board for Accountants (IESBA) issued revisions to the International Code of Ethics for Professional Accountants, including International Independence Standards.
The revisions provide guidance that supports ISQM 2 in addressing the eligibility of an individual to serve in an engagement quality reviewer (EQR) role. These revisions address the objectivity of an EQR and other appropriate reviewers. This project dovetailed with the International Auditing and Assurance Standards Board’s (IAASB’s) development of International Standard on Quality Management (ISQM) 2, Engagement Quality Reviews, which was finalized in December 2020.
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3.2 IESBA proposes holistic approach to defining a public interest entity
On 29 January 2021, the IESBA released the Exposure Draft (ED), Proposed Revisions to the Definitions of Listed Entity and Public Interest Entity in the Code. The exercise is performed in collaboration with the International Auditing and Assurance Standards Board (IAASB) to seek convergence on related terms and concepts. The proposed revisions broaden the definition of a public interest entity (PIE) to include more categories of entities, given the level of public interest in their financial condition, for the purposes of additional independence requirements to enhance confidence in their audits. The IESBA invites all stakeholders to comment on the ED by visiting the IESBA website. Comments are requested by 3 May 2021 . To access the ED, click here.
