Significance of a Company’s Financial Year End (FYE)
Financial statements provide a snapshot of company financial insight at the particular period and it prepared based on the financial year end .
Financial year end play important role in the following area :
- Company Tax Exemption Planing
- Company Decision Making
- Company structure reporting level
- Company statutory reporting compliance
FINANCIAL YEAR END IN COMPANY TAX EXEMPTION
All profit generated by Company is subject to company tax . (17%) .
In Singapore , all newly setup company is granted for tax exemption for the 1st 100k chargeable income for the period of first 3 consecutive years .
IMPORTANT : to enjoy the COMPANY TAX EXEMPTION for the first 3 consecutive years, company is advise to have 12 months accounting year end.
FINANCIAL YEAR END IN DECISION MAKING
Presentation of financial statement will help management to judge company financial insight .
It ease the management to decide :
- budget control
- control and manage operation cost within targeting period
- planning for the company future
Company allowed change in financial year end subject to ACRA approval.
FINANCIAL YEAR END IN COMPANY STRUCTURE
It is important for a group companies to have same financial year end . So easy to consolidate the whole set of account for better reporting and control.
FINANCIAL YEAR END IN COMPLIANCE FILING DUE DATE
Reporting with ACRA
- every company is required to hold AGM within 6 months from the financial year end date
- every company is required to file annual return with in 7 months from the financial year end date
Reporting with IRAS
Company is required to file ECI within 3 months from the financial year end
Related Article : How to fixed Financial Year End