ACRA Financial Reporting Practice Guidance 2026: The Six Areas Directors Should Check Before Signing FY2026 Accounts

Short answer: On 6 November 2026 ACRA issued Financial Reporting Practice Guidance No. 1 of 2026. It names six areas directors should scrutinise in FY2026 financial statements: impairment, expected credit losses, fair value measurement, revenue recognition, provisions and going concern. For each area it lists questions to put to management and disclosures to check before signing.

The ACRA financial reporting practice guidance 2026 is written mainly for Audit Committees, but its questions work just as well for the two or three directors of an owner-managed company about to approve its accounts. This guide explains what the guidance says, how it links to section 201 of the Companies Act 1967, and what a non-accountant director should ask about each of the six areas.

Raffles Corporate Services works with a panel of experienced Singapore law firms who offer cost-effective and efficient legal service and advice. This article is general information only and is not legal advice.

What does the ACRA financial reporting practice guidance 2026 cover?

It is ACRA’s yearly note on what it will look at when it reviews FY2026 financial statements under its Financial Reporting Surveillance Programme. It picks out six accounting areas and, for each one, sets out questions to ask management and the key disclosures to look for.

Under that programme ACRA reviews selected lodged financial statements for compliance with Singapore’s accounting standards. The 2026 guidance describes itself as a guide for directors, particularly those on Audit Committees, in discharging their duties. ACRA links the focus areas to geopolitical, macroeconomic and climate-related uncertainty, including supply chain and energy disruption, tariffs and the effects of artificial intelligence on business models.

ACRA says the list is “not intended to be exhaustive”. It also asks directors to look beyond the Key Audit Matters in the auditor’s report and consider whether all significant judgements and sources of estimation uncertainty have been identified and explained, including those the auditor did not highlight.

You can read the full Financial Reporting Practice Guidance No. 1 of 2026 on ACRA’s site. If you want to know what happens when ACRA does select a set of accounts, our sister site explains how an FRSP review works.

Why does this matter to directors of a small private company?

Because the legal duty sits on every director, not only on Audit Committee members or the accountant.

Under section 201 of the Companies Act 1967, the directors must lay the financial statements before the company at its annual general meeting (section 201(1)), and those statements must comply with the Accounting Standards and give a true and fair view (section 201(2)). Section 201(7) also requires reasonable steps, before the statements are made out, on bad and doubtful debts, current assets that may not realise their book value, and overstated non-current assets. Those checks map onto two of ACRA’s areas: expected credit losses and impairment.

ACRA’s updated financial reporting duties for directors page (last updated 6 November 2026) adds that an audit-exempt company may present unaudited financial statements, while a company that is not exempt must present audited ones. Either way, the duties apply “regardless of your role or financial expertise”. ACRA expects directors to challenge treatments that do not match the substance of a transaction and to apply professional scepticism to management’s estimates.

The same page is direct about outsourcing: you can hand record-keeping and preparation to professional accounting providers, but directors remain legally responsible for the financial statements. For the general standard of care, see our guide to the director’s duty of skill, care and diligence.

What are the six areas, and how do they show up in an SME?

In a small company each of the six areas usually turns on a handful of familiar balances.

The guidance cites paragraphs of SFRS(I) standards. Many private companies prepare their accounts under a different Singapore framework, so ask your preparer which standard and paragraph governs each item in your own accounts. The SME examples are our illustrations.

What should directors ask about impairment and expected credit losses?

Ask whether the numbers reflect today’s conditions rather than last year’s assumptions. ACRA’s questions in both areas focus on forward-looking information, downside scenarios and whether conclusions are backed by evidence.

Impairment of non-financial assets

The guidance asks whether there are new or continuing impairment indicators, such as inflation or supply chain disruption. It asks whether the projections used for value in use rest on reasonable and supportable assumptions, and, where the headroom is small, whether it is highly sensitive to changes in revenue, margins, growth or discount rates. ACRA warns that a generic note such as “the recoverable amount was less than the carrying amount” is insufficient.

In practice: if the business using an asset has become less profitable, ask for the forecast that justifies its book value.

Expected credit losses

ACRA asks whether the expected credit loss (the allowance for amounts customers or borrowers may not pay) is an unbiased, probability-weighted estimate and whether forward-looking scenarios have been updated for current macroeconomic and borrower-specific risks. One question deserves attention in owner-managed groups: where the loss is assessed as immaterial, ACRA wants that conclusion supported by a robust assessment of all relevant factors, “rather than any single factor such as the absence of past defaults, borrower’s net asset position or history of timely repayments”. A loan to a sister company that has always been repaid is not, on its own, evidence that no allowance is needed.

What should directors ask about fair value and revenue recognition?

For fair value, ask how the valuation was done and whether anyone questioned it. For revenue, ask when each promise to the customer is satisfied and whether the company is selling as principal or agent.

Fair value measurement

ACRA’s questions cover whether valuation techniques are appropriate and consistently applied, whether significant assumptions and unobservable inputs reflect current market conditions, and whether the current use of a non-financial asset is still its highest and best use. Disclosures include the fair value hierarchy level and, for Level 3 measurements, the significant unobservable inputs and their sensitivity.

ACRA adds a specific consideration for boards: where an external valuation expert was engaged, ensure management has assessed the expert’s competence, objectivity, scope, methodology and assumptions, and independently challenged the outcome “rather than simply accepting the valuation report”. Your auditor will be asking similar questions about its own experts; see our explainer on the new ACRA Code rule on auditors using external experts.

Revenue recognition

The guidance asks whether all promised goods and services have been identified as performance obligations, whether over-time or point-in-time recognition is supported by the contract, how variable consideration such as rebates, refunds, penalties and delay claims has been estimated, and whether the company acts as principal or agent, which decides whether revenue is shown gross or net. The notes should give entity-specific policies and the significant judgements made.

What should directors ask about provisions and going concern?

For provisions, ask whether every known obligation is recorded or disclosed. For going concern, ask to see the forecast and the downside case, and check that they are consistent with the rest of the accounts.

Provisions

ACRA asks whether each provision meets the tests of a present obligation from a past event, a probable outflow and a reliable estimate, and whether possible obligations have been treated as contingent liabilities instead. It also asks whether new developments have created obligations, and whether any contracts have become onerous because energy, freight, tariff or raw-material costs now exceed the expected benefits.

Going concern

The guidance asks whether management’s going concern assessment covers at least, but is not limited to, 12 months from the end of the reporting period, and is updated to the date the statements are authorised. It asks whether forecasts are consistent with budgets and with the assumptions used for impairment, expected credit losses and fair value, whether severe but plausible downside scenarios have been run, and whether events after the reporting date were considered. ACRA wants entity-specific disclosure of liquidity pressures, funding dependencies and management’s plans, “rather than boilerplate statements”.

A growth forecast used for going concern cannot sit alongside a gloomy one used for impairment. Our sister site’s guide to going concern assessments for directors covers support letters and evidence in more depth.

What changes when the revised going concern auditing standard applies?

For audited companies, the auditor will look further ahead and report on going concern in every audit report. ACRA devotes a section of the guidance to SSA 570 (Revised 2024) because it changes what the company must prepare.

On the effective date as ACRA states it, a company with a 31 December year end would first meet the revised standard on its financial year beginning 1 January 2027, not on its FY2026 audit; confirm the timing with your audit firm. For who needs an audit at all, see our guide to statutory audit requirements in 2026.

How should a small board use the guidance before signing FY2026 accounts?

Turn it into a short, minuted review meeting with whoever prepares the accounts. The steps below are our suggested process, built on ACRA’s questions.

1. Ask the preparer, before the draft is final, which of the six areas apply to your company and which balances they affect.
2. For each relevant area, put ACRA’s questions to the preparer or finance lead and ask for the supporting schedule: the impairment forecast, debtor ageing, valuation report, key contracts and going concern forecast.
3. Read the notes for each area and ask whether they describe your company’s own circumstances or could have been copied from any set of accounts.
4. Review events after the year end up to the signing date, including lost customers, new claims and changes to bank facilities.
5. If the company is audited, discuss the same points with the auditor early, including any judgements that are not Key Audit Matters.
6. Record the questions asked, the answers and the conclusion in the board minutes before the statements are approved.

If something is found after the accounts are filed, the cost rises sharply; our article on section 202B and defective financial statements shows how far a dispute with the Registrar can go.

Frequently asked questions

Is ACRA’s practice guidance legally binding?

No. It is guidance on ACRA’s review focus. The binding duties are in the Companies Act 1967 and the Accounting Standards, and the guidance shows how ACRA expects directors to approach them for FY2026.

Does the guidance apply to an audit-exempt company?

The guidance is addressed to directors generally, particularly Audit Committee members. Section 201(2) still requires an audit-exempt company’s statements to comply with the Accounting Standards and give a true and fair view, so the questions remain useful.

We outsource our accounts. Can the directors rely on the accountant?

Directors can use external help, but ACRA states they remain legally responsible for the financial statements, so they must still review and challenge the draft.

Which financial years does the 2026 guidance cover?

ACRA titles it “Areas of Review Focus for FY2026 Financial Statements”, so it is aimed at financial statements for financial years labelled FY2026.

Need help with this? Call, SMS or WhatsApp +65 8501 7133, or email [email protected]. Raffles Corporate Services works with a panel of corporate and employment law firms; this article is general information, not legal advice.

Last reviewed: 8 November 2026. The Editorial Team, Raffles Corporate Services.