The eligibility tests, reporting differences and business considerations behind choosing SFRS or SFRS SE.
Luca Briefs1/8
Reporting framework
Eligible for SFRS SE? Still weigh the choice
SFRS SE simplifies reporting, but eligibility does not make adoption automatic.
Size tests
Meet at least two of three criteria
Within the current or prior two financial years: revenue no more than S$10 million, assets no more than S$10 million, and average employees no more than 50.
Public accountability
The entity must also meet these restrictions
1No public trading of shares or debt, or preparation for it.
2No deposit-taking or fiduciary asset-holding as primary business.
3Not a public company under the Companies Act.
4Not registered as a charity under the Charities Act.
Lease accounting
Operating leases are treated differently
SFRS 116 recognises right-of-use assets and lease liabilities. SFRS SE permits operating lease payments to be expensed on a straight-line basis over the lease period.
Quick check
Does SFRS SE require the ECL model?
No
SFRS 109 requires expected credit loss modelling. SFRS SE does not, but from 2027 it requires ageing analysis and an undiscounted cash flow breakdown of financial liabilities.
Framework choice
Eligible does not mean required
Qualifying for SFRS SE does not make it compulsory. The choice depends on stakeholder needs, future plans and compliance costs.
Business context
Weigh the reporting needs
1External investors and minority shareholders may benefit from SFRS.
2Listings, mergers or scale-ups within two years may favour SFRS.
3Assess compliance costs against the benefits to stakeholders.
