So says Ravi Menon, M.D of MAS on cryptocurrencies becoming mainstream in the future.
“Perhaps, (it could happen) if an algorithm can mimic the reaction function of a central bank and preserve the value of the cryptotokens better than central banks can do with respect to fiat (legal tender) currencies.”
Sounds like he has just pointed the way forward with that quote.
Just came across an interesting read with an alternative point of view on the fanfare surrounding blockchain and distributed ledger technology.
The article dissects the perceived uses of blockchain and highlights the impracticality of its current functionality in respect to existing systems in these areas :
And the author puts it succinctly towards the end,
"Blockchain enthusiasts often act as if the hard part is getting money from A to B or keeping a record of what happened. In each case, moving money and recording the transaction is actually the cheap, easy, highly-automated part of a much more complex system."
Perhaps the key to developing the killer app for blockchain lies with really understanding how things are being done today and what the end user truly values.
Interesting bit on cryptocurrencies and blockchain from our favourite talkshow :
While the impending GST hike is on everyone's mind, less fanfare is made about how our effective corporate tax rate, for some companies, has actually risen.
Honeymoon period over for start-ups
Having encouraged entrepreneurship for almost a decade by giving generous tax breaks, these have now diminished quite a bit for start-ups.
Where a start-up used to enjoy tax exemption on 100% of it's first $100K, this is now reduced to 75% instead, from YA202 onwards. The maximum exemption threshold has also been reduced from $200k to $125K.
Basically all start-ups that have been incorporated this year would be affected. For example, if your first YA is YA2019, you will still enjoy the pre-Budget 2018 tax reliefs. However, your second YA, which is YA2020, would be subjected to the new changes.
TIP : For start-ups that have been incorporated this year and expect to be profitable in the first year, do take note of your financial year end. Any financial year-end ending in 2019 would would be considered as YA2020 onwards.
Non start-ups not spared either
The partial tax exemption for companies has also decreased with Budget 2018, although this only affects companies having more than $200K chargeable income. The exemption is now capped at $200K chargeable income compared to $300K previously.
These changes, together with the expiry of the PIC scheme, does seem to increase business costs going forward. But at least the Wage Credit Scheme has been extended, so it's not all doom and gloom for businesses in this Budget.
Wishing all our clients and friends a very prosperous and successful Year of the Dog!
Our office will be closed from 15 February 2018 to 19 February 2018.
We are pleased to announce that we have reached Xero bronze partner status. We like to thank you, our clients, for your wonderful support and we look forward to continue our partnership with you well into the future.
In recent years, Big Data and the ability to analyse and use those data is touted as the Next Big Thing.
In the accounting industry, it is also becoming increasingly relevant. So much so the Big 4 has invested heavily and are setting up teams of data analysts and scientists to try and make core services like assurance become more efficient. But when it comes to financial data, most data scientists are not accounting professionals and while they can extract the data for you, they are most certainly not the right people to analyse it. In fact, data analytics team often have to work with the finance professionals to co-ordinate their efforts and make sure the output is relevant and useful to them. This not only is an inefficient allocation of resources but also a costly process for the client.
Connor (from Disruptive Outcomes LLP) in his article here, raised a very valid point: We, as accountants, are the people best equipped to analyse this data. And in order to lead the next wave of disruption, we should be training our accountants to be data scientists as well instead of looking to hire from outside the profession.
Singapore Financial Reporting Standards (FRS) 115 comes into effect this year and IRAS has just published an e-guide on the income tax treatment on the revenue recognised by the adoption of this accounting standard.
Generally, the accounting revenue, as determined in accordance with FRS 115, would be accepted as the revenue for tax purpose in most cases. However, there are two main exceptions to this rule, namely :
a) where specific tax treatment has already been: - (i) established through case law; or (ii) provided under the law ; and
b) in exceptional circumstances where the accounting treatment deviates significantly from tax principles, in the case of contracts with significant financing components
The first exception would mostly apply to property developers, who might have to use percentage of completion method of recognising revenue. They will be glad to know IRAS would still only tax them when the project is substantially completed regardless of the revenue recognition method adopted.
The second exception would mostly apply when there are significant financing components present in the contracts and adjustments to either interest revenue or interest expenses have to be made in accordance with the accounting standard. IRAS will ignore these adjustments as they are accounting constructs and do not represent actual receipt or payment.
Please refer to Annex 1 of the guide for examples.
As it is with any adoption of a new accounting standard, there would likely be prior period adjustments. IRAS has made the tax effect of these adjustments simpler by allowing the upward or downward transitional adjustments that are revenue in nature to be taxed, deducted against exempt income or allowed a deduction in the initial Year of Assessment (YA). For further ease of compliance, the transitional adjustments would also be taxed at the rate applicable to trade income being taxed in the initial YA.
If you require more information on the adoption of FRS 115 or would like to know how this new standard affects your current revenue recognition method, do reach out to us for more information.
Always rushing to file your company's annual returns to meet ACRA's deadlines?
Trying to avoid paying needless late filing fees and penalties?
Compilation of your financial statements is taking too long?
Paying too much to convert your financial statements to XBRL format?
Meet the audit exemption criteria but still need assurance for your financial statements ?
It's time you talk to the ECHTUAL professionals.
Call 6513 5871 or email us now and let us help you!
Came across this interesting article on how one's credit score could basically make or kill you in China. Would this go on to become a global phenomenon?
Can be quite scary, if you think about it.
Wishing all our clients and friends a very Happy and Wonderful New Year Ahead!
Tax Treatment of Virtual Currencies in Singapore
While somewhat more forward thinking than accounting standard setters, IRAS has already come up with a circular on how virtual currencies will be taxed in Singapore.
Read more about it here.
As we ponder over how proceeds from an ICO should be accounted for, we know now that if it is treated as revenue, there's a possibility it will be taxed at the virtual currency exchange rate. No big surprises there .
With Bitcoin's exponential rise in market value, everybody including your cleaning auntie is asking how to put money in it. Of course, bitcoin isn't the only cryptocurrency around and you might be considering the other alternatives out there.
These questions, extracted from the US SEC's public statement, will help guide you into making a sound investment decision:
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