The management of Echtual will like to wish all our clients a very Happy New Year!

We will like to thank all of you for your wonderful support and we look forward to serving you again in 2020!

MAS just released a consultative paper on digital token derivatives. 
Read more about it here.

A friend recently asked me how SoftBank can get away with not reporting WeWork's massive losses in its books if it is treated as an associate rather than a subsidiary. 

I told him much of the rationale comes from an accounting rule called "equity accounting" and this article briefly explains how this is done.

But what the article didn't expound on is the concept of "de facto" control, which is the principle behind the reason why an entity holding an 80% stake in another entity gets to classify it as an associate rather than a subsidiary.
In this case, majority of the voting power now lies with WeWork's board, and SoftBank says they don't have majority of the board of directors, and therefore, no de facto control.

However, if they have the power to appoint and remove directors from the board, it would be hard to prove that they really don't have "de facto" control. 
​
Having issues grappling with the concept of "de facto control"? Speak with the Echtual Experts today!

One major headache of an ICO has always been how to mange the tax burden of the proceeds. If not managed properly, an entity not only faces an income tax charge upfront of the entire proceeds that is meant to fund a few years of development, but also reverse charge on GST on the proceeds if the stipulated threshold are met (assuming the customer was not charged GST on the onset during the sale of tokens).

Truth be told, GST is not an easy area to navigate for ICOs and one which most entities fail to address before the launch. So its great to see that IRAS has come up with a draft e-tax guide on GST on Digital Payment Tokens, In this guide, IRAS also address some of the more complicated issues (e.g. determining belonging status of customers).

Key takeaways from the proposed changes :

• Supply of cryptocurrencies that qualifies as a "digital token payment" will longer be treated as a taxable supply from 1 January 2020. Currently, this is considered a supply of services and hence the GST rules will apply accordingly.
• Coins that are pegged to or denominated in any currency are not considered to be a "digital token payment" under these new changes but they might be able to qualify as an exempt supply under financial services.
• Clearer guidelines in determining belonging status of customers; e.g. proxies that can be used for determination of status
• Clarification on transactions with miners and mining activities
• Clarification on transactions with digital payment token intermediaries (e.g. exchanges)

A helpful summary of the changes can be found in Appendix A of the guide.
IRAS is also currently inviting feedback on these changes and we urge all stakeholders to weigh in on these changes as soon as possible.
​

We are proud to announce that we are now a Benefits Partner of Doerscircle!
Doerscircle is the first platform uniting self-employed people for better conditions. Read more about them here.

KPMG just announced that they are planning to create an independent audit firm regardless of any decision by the British regulators to break-up the Big Four accounting firms.

​We first took note of this development last year and it looks like the British regulators are serious about shaking up the Big Four to improve independence in the industry.

If this sounds familiar its because we have seen this before; back in the days of the Enron scandal which resulted in the existing big accounting firms segregating their consulting arm from the main audit business. But in the years that followed after that, it seems like this they have slowly reverted back to pre-Enron days.

It would be interesting to see how this develops and how it would affect the accounting industry.

It has been a long time waiting, but OCBC bank feeds are finally available for Xero! With OCBC joining the ranks, Xero now has bank feeds for ALL the local banks. 

So what are you waiting for? Sign up with us now before 15 March and enjoy big discounts off your subscription for 12 months!

Wishing all our clients and friends a very Happy and Prosperous Year of the Pig!

Our office will be closed from 4 February to 7 February 2019 during this festive period.

The elephant in the room when we look at cloud accounting solutions has always been direct bank feeds. And for the longest time, Xero has prevailed over its competitors here simply because of its stranglehold in this area.

The reason for its importance is rather simple; you can diligently do your data-entry for book-keeping but all these hard work won't matter for real-time reporting if your book's bank balance does not reconcile to your physical bank balance. And only with direct bank feeds, can you truly reconcile on a real-time basis efficiently. It's strange why the other players didn't challenge Xero in this aspect.

​So when the Start Digital initiative got the press coverage a few days ago, I had expected Xero to dominate the accounting solutions offered. I was quite surprised when this wasn't so.

In fact, the trend seems to be moving towards banks offering direct bank feeds to their own "preferred" accounting solutions partner. Financio has direct bank feeds to Maybank and DBS but not UOB and OCBC, and SAP One only has direct bank feeds from UOB. Surprisingly, most banks in the initiative offer other solutions over Xero. In fact, Xero is only present in the solutions offered by OCBC and only as one of the options. Which is quite ironic, as they still don't have a direct feed to Xero as of today.  

So while Xero is still the only solution with the most direct bank feeds, alternatives are appearing on the horizon. But the bad news is that the competition might not be as open as we hope for.

To find out more about how we can help in your digital journey, contact us today!

Wishing all our clients a very Happy New Year!

It's been a busy 2018 and we wish to thank all our clients for their wonderful support. We look forward to serving you again in 2019.

​Our office will be closed on 1 January 2019 and we will resume business on 2 January 2019.

​Surprised and humbled by the turnout despite being the last speaker on the last day of the Accounting and Finance show.  Thank you for your show of support and I hope the session (Bookkeeping Automation - Top 5 Things To Consider) was useful to you.

And in case you've missed it and want to find out more, drop us a line here.

Our Founder, Vincent Lee will be speaking at the inaugural Accounting & Finance Show Asia in Singapore on Day Two, 17 October 2018.
He will be speaking about "Bookkeeping automation: The top 5 things you need to consider" in the Accounting & Bookkeeping Theatre at 15:30 (3:30pm).
Come and learn more about the digital revolution happening in the industry and let us help you begin your digital journey today!

Wishing all our Muslim clients and friends Selamat Hari Raya Aidiladha!