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GTO Audit

Updated: Jan 19, 2022

Annual Gross Turnover (“AGTO”)

The AGTO refers to the annual fair value of the consideration received or receivable for licensable activities in relation to all licensable activities under the type of licence granted to the Licensee by the Licensor taking into account the amount of any trade discounts and volume rebates allowed by the Licensee.

Sales Audits for Rental of Retail Premises

As a general practice, a common rental structure companies offer to their tenants is a combination of both a fixed rent per square feet and a fixed share of the gross turnover (GTO). Sales audits are necessary only if the rent payable to the landlords comprises the variable component based on the tenant’s GTO. In the case where the tenant’s POS system is integrated into the landlord’s POS system, instead of submitting an annual audited sales report, the tenant can provide an upfront monthly undertaking by their director or Certified Public Accountant.

Independent Auditor’s Report on Annual Gross Turnover

The auditor will audit the Schedule of the AGTO in relation to all licensable activities under the type of licence granted to the Licensee by the Licensor (the “Schedule”) of the Licensee for the period. The Schedule will be prepared by the Licensee’s management based on the basis of accounting as described in the Basis of Preparation.

Management’s Responsibility for the Schedule

Management is responsible for the preparation of the Schedule and for such internal control as management determines is necessary to enable the preparation of the Schedule that is free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

The auditor's responsibility is to express an opinion on the Schedule based on his audit. He will conduct his audit in accordance with Singapore Standards on Auditing. Those standards require that he complies with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Schedule is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Schedule. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the Schedule, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of the Schedule in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control.

He will obtain sufficient and appropriate audit evidence to provide a basis for auditor's opinion.


The AGTO (totalling amount in the Schedule of the Licensee for the period will be prepared, in all material respects, in accordance with the Basis of Preparation, in relation to all licensable activities under the type of licence granted to the Licensee by the Licensor.

Basis of Accounting

The Basis of Preparation describes the basis of accounting. The Schedule will be prepared to assist the Licensee to meet the requirements of the Licensor in connection with the determination of the Licensee’s annual licence fee by the Licensor.

Retail premises

  • Restaurant, bars, pubs and nightclubs

  • Retail shops and services (e.g. supermarket, departmental store, gift store, salons, tailors, etc.)

  • Medical, dental, aesthetic and veterinary clinics

  • Commercial schools (e.g. tuition centres, child care/infant care centres, dance school, etc.)

  • Gyms, sports club and fitness centres

  • Entertainment centres (e.g. cinema, arcade centre and bowling alleys, etc.)

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