Category / News

by Edgar

KPMG – Press Release – Sep 2008 – Summary


Mr Owi Kek Hean, Head of Tax Services at KPMG in Singapore highlighted the following key trends.

Firstly, indirect tax rates on the whole have not changed, while corporate tax rates have been
pushed steadily down.

Secondly, more and more governments are introducing indirect tax systems. There are currently
135 countries with these systems in place and more in the pipeline.

Thirdly, there is a steady expansion of the transactions that these taxes are applied to, and a new focus from tax authorities on efficient collection of indirect taxes through corporate tax
departments.

Fourthly – Enforcement is on the rise.
If your business is making GST supplies of S$1 billion or more, you are entitled to access its GST
Compliance Assurance Programme. This programme involves visits by specialist revenue authority officers to large businesses to assist with issues of GST accounting, record keeping and reporting.

Interesting facts on Asia Pacific countries:-
Corporate tax rates – Highest – Japan with 40%, Lowest – Macau 12%
Indirect tax rates – Highest – Pakistan 20%, Lowest – Japan 5% (Sweden – 25%)

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by Edgar

A step back for Fair Value?

Currently – Financial instruments are valued at mark-to-market ie. the price they would fetch if sold on the open market now.

To be adopted soon – They would be valued at historical cost if such financial instruments were to be held to maturity.

Who has adopted the change already?
Hong Kong, Taiwan and Europe. Quite a significant number already.

When is Singapore’s ASC expected to give their blessing?
By end of the week.

by Edgar

ACCA Conference 2008 – A Summary


My summary may not do justice to the quality and quantity of information being delivered by the many distinguished speakers from 9am to 5pm. As the Chairman of the afternoon session, I must admit that I tried to absorb as much as possible. The end result is that I have learned something more than at the beginning of the day. I am sure about 400 people who attended the conference too will agree with me.

Dato’ John Raslan, Exec. Chairman of PWC Malaysia

  • He is for convergence of IFRS.
  • But he urged all of us to participate actively in the convergence process whether at national or international level.

Mr Barmaky, Partner, Deloitte & Touche

  • He gave us a macro review of FRS changes to date and changes to come at IASB level.

Mr Tirumalai, Oracle

  • He briefed us on a solution in the form of platform which can enable us to implement the standards.

In the panel discussion chaired by Professor Pearl Tan of SMU, the following are my general feel of the panelists

  • Fair value should not be blamed for the current state of financial turmoil.
  • Global standards should not be tweaked too much to accomodate local market needs and culture as differing standards may lead to greater uncertainty to practitioners.
  • How can our voice from this region be heard in between the dominating noises from Europe and US?
  • FRS on SMEs/Private Entities – As there are significant differences between big and small business entities, they should thus be treated separately as apples and oranges.
  • Should we take on other non-FRS standards on board? – Officially perhaps no but there are invisible forces moving business entities towards taking on non-FRS stds like Corporate Social Responsibility (CSR) in their reporting.

Mr Kon Yin Tong, Partner, Foo Kon Tan Grant Thornton
He gave us a rundown of the many FRSs due for implementation in 2009.

Mr Tham Sai Choy, Partner, KPMG, spent “5 minuates” telling us about Clarity Project and possible implications to the audit committees.

Mr Sum Yee Loong, Partner, Deloitte & Touche explained why IRAS has collected more billions than expected (just kidding) and shared another billion ideas for us to be more tax efficient.

Ms Kala Anandarajah, Partner, Rajah & Tann gave us a lengthy review of 2 cases on auditor’s responsibility and director’s responsibility.

Finally, I reached the end of the conference, exhausted with adrenalin still pumping for many hours after.

by Edgar

Petition to Protect "Accountant" in Singapore

my investment

I had a meeting with a prospective client recently who complained about their existing “accountant”. The “accountant” has apparently allowed toner for office printer to be capitalised and depreciated over time. The client was flabbergasted that an accountant can make such mistake.

While I am not sure of the person’s credentials, I ended up trying to explain to the client that almost everyone in Singapore can call themselves an accountant without breaking any law.

Recently in UK, Mr Alan Shooter submitted a petition with 4,000 signatures to the Prime Minister to seek protection for the designation “accountant”.

There must be some regulation in this area to ensure that the integrity and professionalism of those who have dedicated years of their life in securing formal accounting training, are not eroded away by irresponsible individuals.

If you are serious about your profession, please say “Yes” when you post your message here.

by Edgar

The ACCA Annual Conference 2008

Global Standards – The Business Benefits: Engineering a Global Business Community
Friday, 17 October 2008, Raffles City Convention Centre

In the morning session, we will have the STRATEGIC segment. Mr Thomas Thomas of Singapore Compact will chair a series of presentations as follows:-

  1. Dato Johan Raslan, Executive Chairman, PwC Malaysia with the keynote address
  2. Mr Shariq Barnaky, Partner at Deloitte & Touche to give us a review of global IFRS Development
  3. Mr Joseph Alfred, our technical advisor for ACCA Singapore will present the findings of ACCA/CFO survey on Asia Pacific’s Road to Global Standards
  4. Mr Ravi Tirumulai of Oracle Corp will present their approach for enabling Global Standards
  5. Dr Pearl Tan of SMU will then lead a panel of distinguished professionals to discuss the pros and cons for Global Standards.

In the afternoon session, Edgar will have the honour of chairing the afternoon’s TECHNICAL segment.

Mr Kon Yin Tong of Foo Kon Tan Grant Thornton will kick off with FRS updates while Mr Tham Sai Choy of KPMG will do the Audit updates.

After the break, Mr Sum Yee Loong of Deloitte & Touche will then give us the Tax updates. Our anchor for the day will be Ms Kala Anandarajah, Partner of Rajah & Tann will address the legal issues that we need to know.

So for those who are interested, please check out more details here.
http://singapore.accaglobal.com/databases/events/singapore/171008

by Edgar

Suspending fair value accounting to save the world?

a little girl enjoying her ride, oblivious to sub prime

A friend who is in the know of markets told me that US is suspending fair value accounting for one year as part of its armoury of measures to contain the sub-prime crisis.

I exclaimed, “No way.” I am trying to search for the authoritative article that confirms my friend’s words. Can any help me on this?

My googling led to me to this article by Karey Wutkowski and Emily Chasan from Reuters dated Sep 19, 2008. It did not mention any outright suspension but instead presented the usual arguments for and against fair value accounting.

I would be very disappointed if it was true as the true value of any law/standard can only be realised if it is put through the baptism of fire of current sub-prime financial storm.

A critic highlighted an important “hole” in fair value accounting ie. the complete absence of any markets to provide an indication of value. So the Authorities may probably have to disappoint people like Edgar by suspending fair value accounting while they work furiously trying to calm the global markets to save thousands of jobs and a few hundred billions dollars.

The article mentioned that Fair Value Accounting took effect in US this year. So could it be that the new accounting standard has “encouraged” the revelation of sub prime storm to the current scale.

by Edgar

Windfall Tax on IPP reversed

wedding in progress

On Friday’s BT, I was duly surprised by the news that Malaysia’s tax department has decided to scrap the windfall tax on its Indepedent Power Producers that it announced only a few months ago. [Click here for background – http://taxwithedgar.blogspot.com/2008/07/tax-on-your-windfall.html%5D

Don’t pop the champagne yet. The windfall tax will however be replaced by a one-off payment.

Either way, the Government will still get the IPP’s monies. Renaming it to “one-off” would satisfy the rating agencies.

Another “one-off payment” next year? We will wait and see.

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