Expanding the Scope of FRS 119 for Singapore Entities: Streamlined Disclosures for Subsidiaries and Small Entities

FRS 119 Subsidiaries without Public Accountability: Disclosures is a voluntary accounting standard issued in 2024 by the Accounting Standards Council (“ASC”) under the Accounting and Corporate Regulatory Authority (“ACRA”). The Standard sets out the disclosure requirements for subsidiaries that do not have public accountability and whose parent companies prepare consolidated financial statements available for public use. 

Subsidiaries electing to apply FRS 119 will continue to apply the full recognition, measurement, and presentation requirements of the Singapore Financial Reporting Standards (“FRSs”), while benefiting from reduced disclosure requirements under FRS 119.  

For instance, under FRS 119, an entity with transactions within the scope of FRS 102 Share-based Payment is not required to provide the detailed disclosure set out in paragraphs 44-52 of FRS 102. Instead, the entity would disclose information in accordance with paragraphs 31-34 of FRS 119 which require a summary including: 

• a description of share-based payment arrangements,  
• the number and weighted average exercise prices of share options,  
• the method used to measure the fair value of equity-settled share-based payment transactions; and 
• other general information about transactions in the scope of FRS 102.  

FRS 119 is substantially aligned with IFRS 19 Subsidiaries without Public Accountability: Disclosures, issued by the International Accounting Standards Board (IASB). 
 

Amendments to FRS 119 and the Expected Resulting Benefits 

In August 2025, the ASC amended the title of FRS 119 to Subsidiaries and Small Entities without Public Accountability: Disclosures. The Amendments to FRS 119 extend the scope of the Standard, allowing Singapore entities that prepare their financial statements in accordance with the Singapore Financial Reporting Standards (FRSs) and qualify as small entities without public accountability to apply it. 

Under the amended FRS 119, entities other than subsidiaries can now benefit from the option to prepare financial statements with reduced disclosure requirements. FRS 119 is effective for annual reporting periods beginning on or after 1 January 2027, with early adoption permitted. 

Since FRS 119 is a voluntary standard, entities are encouraged to carefully assess the potential benefits against the costs of adoption before implementation. For many entities, the application of FRS 119 can lead to more concise and focused financial statements, highlighting information that is truly relevant and material to their financial performance. 

FRS 119 helps streamline reporting processes and enhance clarity for users of financial statements. This approach promotes transparency and efficiency, allowing preparers to communicate financial results more effectively without unnecessary disclosure burden.
 

Small Entity without Public Accountability 

Under the amended FRS 119, an entity is a small entity without public accountability if it meets: 

• all of the qualitative criteria, and  
• at least two quantitative criteria outlined below. 

¹An entity has public accountability if:

• its debt or equity instruments are traded in a public market, or it is in the process of issuing such instruments for trading in a public market (a domestic or foreign stock exchange or an over-the-counter market, including local and regional markets); or

• it holds assets in a fiduciary capacity for a broad group of outsiders as one of its primary businesses (for example, banks, credit unions, insurance companies, securities brokers/dealers, mutual funds and investment banks often meet this second criterion).

Application Criteria
In addition to the above, the following rules govern the application of FRS 119 by small entities without public accountability: 

• Initial application

  • To apply FRS 119 for the first time, a small entity without public accountability must, for each of the two consecutive reporting periods immediately preceding the reporting period in which FRS 119 is to be applied, satisfy:

• Cessation of applicability

  • FRS 119 ceases to apply to a small entity without public accountability if:

    • It no longer meets all of the qualitative criteria for the full reporting period; or

    • For two consecutive reporting periods immediately preceding the current reporting period, it fails to meet at least two of the three quantitative criteria at the end of both periods.

• Reapplication of FRS 119

  • If FRS 119 ceases to be applicable, a small entity without public accountability may reapply FRS 119 once it again satisfies the criteria for initial application.
     

Conclusion

With the extended scope of FRS 119 to allow eligible small entities without public accountability to apply FRS 119, eligible Singapore entities should take the opportunity to adopt this new standard to streamline the disclosures in their financial statement and enhance the efficiency of the financial reporting process. Financial statements disclosures should be focusing on material information that is most useful and relevant for users’ decision making.

For more details on amendments to FRS 119, refer here on the publication released by ACRA.
 

Article contributed by Aileen Yap, Director, Knowledge & Professional Development