In Singapore, the Accounting Standards Council (ASC) formulates the country’s accounting standards. The accounting standards in Singapore are called Singapore Financial Reporting Standards (SFRS) and are based on the International Financial Reporting Standards (IFRS). SFRS are based on accrual-based accounting which means that when transactions occur, their effects are recorded at that time and not later when the cash is paid or received. These transactions are recorded and reported in the financial statements of the period in which they occurred. This accrual based system is beneficial to businesses as it informs users of the past transactions where cash was paid or received. Similarly, it also informs stakeholders about future obligations of receipt or payment of cash. SFRS are further categorized into: The full set of Singapore Financial Reporting Standards Singapore Financial Reporting Standards (SFRS) for Small Entities (SE) Small enterprises make up a major portion of Singapore businesses. To facilitate these SMEs who had difficulty complying with the full set of SFRS, the International Accounting Standards Board (IASB) formulated SFRS for SEs. These standards ensured transparency and quality for small entities and SMEs. to qualify for SFRS for SEs, companies must meet any two of the following three criteria: The total annual revenue of the company is less than S$ 10 million. The total gross assets of the company are less than S$ 10 million. The total number of employees in the company is less than 50. If a company meets any two of the three criteria for two consecutive years, it can qualify for SFRS for SEs. If a company grows, it must maintain that stature for two years to be able to qualify for the full set of SFRS.