FRS 119 SUBSIDIARIES AND SMALL ENTITIES WITHOUT PUBLIC ACCOUNTABILITY: DISCLOSURES
Extending the benefits of reduced disclosures to more entities
By the Secretariat of the Accounting Standards Committee (ASC)
8 September 2025
Takeaways
The amended FRS 119 now allows small entities without public accountability to prepare financial statements with reduced disclosures.
These amendments are expected to help eligible entities reduce time, effort and costs involved in preparing financial statements while streamlining the financial statements for users.
Given the major update in the new edition of the Singapore Financial Reporting Standard for Small Entities, eligible entities may find it more cost-effective to transition to the full Singapore Financial Reporting Standards and take advantage of the reduced disclosure requirements in FRS 119.
WHAT IS FRS 119?
FRS 119 Subsidiaries without Public Accountability: Disclosures, a voluntary Standard issued by the ASC under the Accounting and Corporate Regulatory Authority (ACRA) in 2024, specifies the disclosure requirements that apply to a subsidiary which does not have public accountability and whose parent produces consolidated financial statements that are available for public use. A subsidiary that elects to apply FRS 119, which is substantially aligned with IFRS 19 Subsidiaries without Public Accountability: Disclosures issued by the International Accounting Standards Board (IASB), prepares financial statements in accordance with the recognition, measurement and presentation requirements in full Singapore Financial Reporting Standards (FRSs) and the reduced disclosure requirements in FRS 119.
The IASB performed an analysis of the effects of IFRS 19, which can be found here, and noted from its field test that IFRS 19 results in:
- Approximately 64% reduction in the disclosure requirements subsidiaries had to consider; and
- On average, 4.5 pages saved per subsidiary’s financial statements.
WHAT WERE THE CONSIDERATIONS FOR FRS 119 TO BE AMENDED?
We closely followed the IASB’s project on Subsidiaries without Public Accountability: Disclosures since its commencement as we saw an opportunity for entities other than subsidiaries, which were already within the project scope, to reap the benefits of preparing financial statements with reduced disclosure requirements. At the same time, the take-up rates of FRSs and the Singapore Financial Reporting Standard for Small Entities (SFRS for Small Entities) by Singapore-incorporated companies filing XBRL financial statements with ACRA were also closely monitored. It was observed that despite the introduction of the SFRS for Small Entities as an alternative financial reporting framework more than a decade ago, its take-up rate stayed very low. In comparison, the take-up rate of FRSs remained high over the years at an estimated 4 out of 5 Singapore-incorporated companies filing XBRL financial statements1.
The first group of Singapore-incorporated companies identified to be able to benefit from a set of reduced disclosure requirements in FRSs were those currently using the SFRS for Small Entities. In 2025, the IASB issued a major update to the IFRS for SMEs Accounting Standard to enhance alignment with full IFRS Accounting Standards, effective for annual reporting periods beginning on or after 1 January 2027. A similar update was issued by the ASC to the SFRS for Small Entities to reflect similar alignment to full FRSs. It may be more cost-effective in the longer term for these companies to transition to FRSs before 2027 and benefit from reduced disclosure requirements rather than incurring time and effort to assess the implications of the new and amended requirements in this major update, especially since future updates to the SFRS for Small Entities are expected to introduce requirements that would be more closely aligned with those of full FRSs.
A further analysis of the take-up rate of FRSs revealed that about a quarter of Singapore-incorporated companies that filed XBRL financial statements were estimated to be non-subsidiary companies that use FRSs with full disclosure requirements despite meeting the criteria to be eligible to apply the SFRS for Small Entities1. These companies, which made up a considerable proportion of Singapore-incorporated companies, could likewise benefit from a set of reduced disclosure requirements in FRSs.
Jurisdictions, such as Australia and New Zealand, utilised tiering systems whereby entities, usually those without public accountability and below a specified size threshold, could prepare financial statements in accordance with the recognition, measurement and presentation requirements similar to full IFRS Accounting Standards, but with reduced disclosure requirements.
While the actual effects and benefits will vary among entities, it is anticipated that eligible entities will experience a reduction in the costs of preparing financial statements, while still maintaining the usefulness of the information for users of those financial statements. Therefore, we would like to extend this option to a broader range of entities outlined below.
WHAT ARE THE 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 and made it available as an option to Singapore entities that prepare their financial statements in accordance with FRSs and fulfil the criteria to be small entities without public accountability. FRS 119 is effective for annual reporting periods beginning on or after 1 January 2027, with earlier application permitted.
The objective of the amendments is to extend the benefits of preparing financial statements with reduced disclosures to more entities.
As FRS 119 is a voluntary Standard, eligible entities should make their own assessment of the expected benefits versus the associated costs of applying FRS 119 to decide whether to apply FRS 119 or not. Overall, the ASC expects the amendments to FRS 119 to result in the following benefits:
| Eligible entities currently using FRSs | Eligible entities currently using the SFRS for Small Entities | |
|---|---|---|
| Preparers | Reduced disclosure requirements which will save time, costs and effort in preparing and reviewing financial statements. | A major update was made to the SFRS for Small Entities and more are anticipated in the future; may be more cost-effective to transition to FRSs and benefit from reduced disclosure requirements in FRS 119. |
| Users of financial statements | More streamlined financial statements with direct focus on the more relevant and material information about entity’s financial performance. | Investors are more familiar with FRSs and would find financial statements prepared using FRSs with reduced disclosures easier to appreciate and more comparable across entities using FRSs. |
WHAT IS A SMALL ENTITY WITHOUT PUBLIC ACCOUNTABILITY?
Under the amended FRS 119, an entity is a small entity without public accountability if it satisfies (i) all of the qualitative criteria and (ii) at least two quantitative criteria:
| Qualitative criteria | Quantitative criteria |
|---|---|
|
|
In addition to the above, the following criteria for applying FRS 119 have to be met:
- For the initial application of FRS 119, a small entity without public accountability has to satisfy, for each of the previous two consecutive reporting periods before the reporting period in respect of which FRS 119 is sought to be used, (i) all of the qualitative criteria and (ii) at least two quantitative criteria.
- After the initial application, FRS 119 ceases to be applicable to a small entity without public accountability if:
- That small entity without public accountability ceases to meet all of the qualitative criteria for the full reporting period in respect of which this Standard is sought to be used; or
- For the previous two consecutive reporting periods before the reporting period in respect of which this Standard is sought to be used, that small entity without public accountability did not meet at least two of the three quantitative criteria at the end of both of those reporting periods.
Where FRS 119 ceases to be applicable to a small entity without public accountability, FRS 119 may be applicable to that small entity without public accountability again if it subsequently meets the criteria for initial application.
WHY ARE THE CRITERIA BASED ON SFRS FOR SMALL ENTITIES?
The following were considered before FRS 119 was amended to be available to small entities without public accountability, i.e., entities eligible to use the SFRS for Small Entities:
- While the objective is to extend the benefits of reduced disclosure requirements to more entities, they should not be applicable to larger entities — the full disclosure requirements in FRSs are already tailored to such entities to ensure that useful information is provided to users of their financial statements.
- As mentioned above, a considerable proportion of Singapore-incorporated companies use FRSs despite being eligible for the SFRS for Small Entities and would, therefore, qualify for the reduced disclosure requirements if this set of criteria were to be used.
- The criteria to use the SFRS for Small Entities are substantially aligned with the criteria for a small company to be exempted from audit which can be found here. Using consistent criteria to assess eligibility for relief for both regulatory compliance and financial reporting minimises confusion and facilitates the assessment. In addition, practitioners have experience or knowledge on the criteria to be eligible for the SFRS for Small Entities as well as the small company audit exemption, further easing the application of FRS 119.
- As mentioned above, a major update was made to the SFRS for Small Entities to enhance alignment with full FRSs, and further alignment is expected in the future. The amended FRS 119 offers entities, which are considering to transition to FRSs from the SFRS for Small Entities, an opportunity to transition directly to FRSs while benefiting from the reduced disclosure requirements in FRS 119.
HOW WOULD THE AMENDMENTS BE RELEVANT TO MY ORGANISATION AND/OR CLIENTS?
| Subsidiaries eligible for current version of FRS 119 | Entities currently using FRSs | Entities currently using the SFRS for Small Entities |
|---|---|---|
| No impact. | If the new criteria in FRS 119 to be small entities without public accountability are satisfied, these entities can elect to apply FRS 119 and prepare financial statements with reduced disclosures. | These entities can choose to transition to FRSs and elect to apply FRS 119 to prepare financial statements with reduced disclosures. |
WHERE CAN YOU DOWNLOAD FRS 119 AND WHAT RESOURCES ARE AVAILABLE?
FRS 119 is available for download here. The following are useful resources pertaining to IFRS 19 which FRS 119 is substantially aligned to:
- Technical highlight on IFRS 19 by the Institute of Singapore Chartered Accountant which can be found here.
- IFRS 19 disclosure tracker by the IASB which can be accessed here (registration required).
- Practice Aid on Disclosures – IFRS 19 versus full IFRS Accounting Standards requirements by PwC which is available for download here.
2 An 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).
