On 20 April 2018, Section 202A of the Singapore Companies Act (the “Act”) was introduced to allow directors to voluntarily revise the defective financial statements on their own accord. Before section 202A was introduced, directors had to obtain a court order before they could file revised financial statements, which could be time-consuming and costly.
A company can now voluntarily revise its financial statements under section 202A, when it appears to the directors that the financial statements do not comply with the requirements of the Act (including compliance with the Accounting Standards).
Section 202B of the Act was also introduced on the same date to provides for the Registrar to apply to the Court for a declaration that the financial statements do not comply with the requirements of the Act (including compliance with the Accounting Standards), and for an order requiring the directors to revise the financial statements. The Court will then decide whether the financial statements comply with the requirements of the Act (including compliance with the Accounting Standards), and the Court may then give directions on the manner of revision.
Key requirements of sections 202A and 202B of the Act
- The revised financial statements are taken as having been prepared on the date of the original financial statements and accordingly, do not deal with events occurring after the date of the original financial statements.
- The requirements of the Accounting Standards that were applied in the original financial statements will continue to be applied in the revised financial statements.
- Relief from requirements granted by the Registrar on the original financial statements do not automatically apply to the revised financial statements and new directors’ statement. New applications must be made.
- A new directors’ statement and amended auditor’s report must be attached to the revised financial statements.
- Directors shall take reasonable steps to ensure that the revised financial statements, together with the new directors’ statement and the amended auditor’s report, are sent within 30 days after the date of revision, to:
– all persons who had received the original financial statements; and
– all persons entitled to receive the notice of general meeting as at the date of revision.
- The revised financial statements must be filed with the Registrar within 30 days after the date of revision.
- The revised financial statements must be laid at the next general meeting held after the date of revision.
For more information, please contact Linda Wong at email@example.com or Stella Lee at firstname.lastname@example.org.