The Singapore government has implemented various support schemes, including salary support, to assist businesses in retaining employment during challenging periods. As businesses receive these funds, it is essential to uphold sound bookkeeping practices that balance operational efficiency with accounting professionalism.
Under the Singapore Financial Reporting Standards (SFRS)-20, there are two ways to present grant income received. Firstly, it can be shown separately as grant income or categorized under "other income." Alternatively, it can be deducted from the salary costs.
To promote transparency, it is advisable to present the grant income under the "other income" category rather than deducting it from the salary costs. This approach allows for clearer disclosure of the grant income received. However, it is crucial to consider the specific disclosure requirements that apply to your business.
Regarding tax implications, it is recommended to seek guidance from tax professionals or experts who can provide customized advice based on your unique circumstances. They can help you understand the tax implications associated with different presentation methods and advise on the optimal approach to meet the expectations of shareholders or investors.
By ensuring compliance with accounting standards, maintaining transparency in financial reporting, and seeking professional advice, you can effectively manage your finances and foster trust among stakeholders.
