The Consolidated Financial Statements are the financial statements of a Group in which the assets, liabilities, income, expenses and cash flows of the ultimate parent entity and the constituent entities are presented as those of a single economic entity.
Preparing Group Accounts or Consolidated Financial Statements is very important if a group of companies want to get the benefits of Singapore’s Group Relief as regards to corporate taxation, as it enables companies to deduct unutilised capital allowances/ trade losses/ donations of one company from the assessable income of another company in the same group.
Outsource your accounting needs to an accounting and bookkeeping service provider who can also guide you on the benefits and reliefs with corporate taxation.
Group Relief System in Singapore
GR is a system which treats companies in the same group as if they are one single company. Under the GR system, the following items (referred to as “loss items”) of one company can be deducted from the assessable income of the other company of the same group:
- Current year unutilised capital allowances
- Current year unutilised trade losses
- Current year unutilised donations
Transfer of Loss Items
The company which transfers any of its loss items is called ‘transferor’. The company which receives the loss items is called ‘claimant’.
A transferor may transfer its loss items to a claimant to be deducted from the assessable income of the claimant. However, the transferor and claimant must be in the same group.
The transferor and claimant of the loss items have to:
- be Singapore incorporated companies;
- belong to the same group of companies and maintain 75% shareholding threshold; and
- have the same financial year end.
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Benefit from Singapore’s Group Relief scheme and file your group's consolidated financial statements to save on your corporate tax in Singapore.