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Malaysia

Financial Reporting Framework in Malaysia

Companies registered in Malaysia are required to prepare statutory financial statements in accordance with the approved accounting standards issued by the Malaysian Accounting Standards Board (MASB). Foreign companies listed on a stock exchange in Malaysia may prepare financial statements in accordance with certain internationally recognised accounting standards such as the IFRSs.

MASB has two sets of approved accounting standards, namely:

  • MASB Approved Accounting Standards for Entities Other than Private Entities – Financial Reporting Standards (FRSs); and
  • MASB Approved Accounting Standards for Private Entities – Private Entity Reporting Standards (PERSs).

On 1 August 2008, the Financial Reporting Foundation, which oversees the operations of MASB, and MASB issued a statement on their plan for full convergence of the FRSs with IFRSs as issued by IASB by 1 January 2012. The staff of MASB has issued a proposed calendar that provides a tentative adoption timeline of IFRSs issued by IASB as at 19 June 2009. Private entities that apply PERSs will continue to do so until such time the MASB decides otherwise.

On 17 November 2011, the MASB issued a new MASB approved accounting framework, the Malaysian Financial Reporting Standards (MFRS Framework), which is a fully IFRS-compliant framework and equivalent to IFRSs. The MFRS Framework comprises Standards as issued by the International Accounting Standards Board (IASB) that are effective on 1 January 2012. It also comprises new and revised Standards recently issued by the IASB that will be effective after 1 January 2012 such as Standards on financial instruments, consolidation, joint arrangements, fair value measurement and employee benefits, among others. The adoption of the MFRS Framework will allow Malaysian entities to be able to assert that their financial statements are in full compliance with IFRSs.

The MFRS Framework is to be applied by all Entities Other Than Private Entities for annual periods beginning on or after 1 January 2012, with the exception of entities that are within the scope of MFRS 141 Agriculture (MFRS 141) and IC Interpretation 15 Agreements for Construction of Real Estate (IC 15), including its parent, significant investor and venturer (called 'Transitioning Entities'). Transitioning Entities will be allowed to defer adoption of the new MFRS Framework for an additional one year. Consequently, adoption of the MFRS Framework by Transitioning Entities will be mandatory for annual periods beginning on or after 1 January 2013.

Related news

  • MASB outlines new private entities financial reporting framework

  • Mar 02, 2013

  • The Malaysian Accounting Standards Board (MASB) has issued a roadmap outlining a new financial reporting framework for private entities. The roadmap proposes a framework that sees private entities transitioning to the MASB’s ‘Financial Reporting Standards for Small and Medium-sized Entities’ (FRS for SMEs). The FRS for SMEs is expected to be issued during the first half of 2013 and be effective for annual periods beginning on or after 1 January 2016. The FRS for SMEs is virtually identical to the International Financial Reporting Standard for Small and Medium-sized Entities (IFRS for SMEs) as issued by the IASB in July 2009.

  • Report from recent IFASS meeting released

  • Jan 17, 2013

  • A report has been issued summarising the discussions at a meeting of the International Forum of Accounting Standard Setters (IFASS, formerly the NSS) held in Zurich on 22-23 October 2012. The meeting covered a broad range of topics, including the future relationships between the IASB and regional and national standard setters, topical issues in financial reporting, reports from regional groups and administrative matters.

  • MASB releases feedback statement on discussion papers on Islamic finance transactions

  • Jan 04, 2013

  • The Malaysian Accounting Standards Board (MASB) has published a feedback statement on three discussion papers exploring the accounting treatment of a number of Islamic financial transactions. For the time being, the MASB will refrain from issuing Technical Releases (TRs) based on the discussion papers and the feedback received although it had originally intended to do so because it wants to avoid the impression of creating local interpretations.

  • Outcomes from the fourth AOSSG meeting

  • Dec 13, 2012

  • The Asian-Oceanian Standard-Setters Group (AOSSG) has released a communiqué from its meeting held in Kathmandu, Nepal on 28 and 29 November 2012. Highlights include plans for an ‘IFRS Centre of Excellence for a Developing Country’ (IFRS COEDC) in Nepal that would help Nepal to build its standard-setting capacity, the need for rapid finalisation of the IASB's project on 'bearer biological assets', and discussion on Islamic finance accounting issues.

  • Accounting for Islamic finance

  • Nov 08, 2012

  • The Malaysian Accounting Standards Board (MASB) has published a two-part staff-prepared paper discussing Islamic finance, accounting treatments for various Islamic finance instruments, and the reasons why the MASB chose to require Islamic financial institutions to follow Malaysian Financial Reporting Standards, which are equivalent to IFRS. The paper concludes with a call for the IASB to consider Islamic accounting issues.

  • Malaysia continues the debate on private company reporting

  • Oct 26, 2012

  • The Malaysian Accounting Standards Board (MASB) has published a staff summary of the current considerations around the future for private company reporting in Malaysia. The summary, which is not an official MASB document, outlines the history of the MASB's consideration of the appropriate reporting framework for private entities, and outlines the options available going forward.

  • Malaysia defers IFRS adoption for agricultural and real estate entities

  • Jul 04, 2012

  • The Malaysian Accounting Standards Board (MASB) has announced a decision to allow agriculture and real estate companies to defer the adoption of the (IFRS compliant) Malaysian Financial Reporting Standards for a further year, to annual periods beginning on or after 1 January 2014. Consistent with previous deferrals, the deferral is in light of delays in the expected timing of the IASB's revenue recognition project, and the possibility of the IASB taking on a project on agriculture.

  • Report from recent IFASS meeting released

  • Jun 04, 2012

  • The International Forum of Accounting Standards Setters (IFASS) met in Kuala Lumpur on 29-30 March 2012. A detailed report of proceedings at the meeting has now been released, outlining discussions on numerous topics such as the relationship between standard setters and the IASB, the IASB's work programme and processes, and a report on the possible adoption of IFRS in the United States noting a possible "step back".

  • Australian FRC Chairman comments on global standards, floats idea of regional regulatory database

  • May 16, 2012

  • The Australian Financial Reporting Council (FRC) has published the text of a speech given by Ms Lynn Wood (FRC Chairman) to the 6th IFRS Regional Policy Forum held in Kuala Lumpur, Malaysia, on 26-27 March 2012. In the speech, Ms Wood comments on topics such as the possible adoption of IFRS in the United States and the steps needed by regulators to ensure global consistency in accounting standard interpretation, including the possible need for an enforcement database for the Asia-Pacific region.

  • Outcomes from March 2012 AOSSG meeting

  • Mar 28, 2012

  • The Asian-Oceanian Standard-Setters Group (AOSSG) has released a summary of matters discussed at its informal meeting held on 25 March 2012 in Kuala Lumpur.

  • Malaysia considers private company reporting

  • Mar 05, 2012

  • The Malaysian Accounting Standards Board (MASB) has issued a Request for Views (RFV) that aims to seek feedback from constituents on the financial reporting future of private entities in Malaysia.

  • AOSSG to meet in March

  • Feb 06, 2012

  • The Asian-Oceanian Standard-Setters Group (AOSSG) has announced it will hold an informal meeting co-hosted by the Malaysian Accounting Standards Board (MASB) on Sunday 25 March 2012, 2:30-5:30pm.

  • Malaysia finalises IFRS-compliant standards

  • Nov 22, 2011

  • The Malaysian Accounting Standards Board (MASB) has issued a new MASB approved accounting framework, the Malaysian Financial Reporting Standards (MFRS Framework), which is a fully IFRS-compliant framework and equivalent to IFRSs.

  • Emerging Economies Group established

  • Aug 02, 2011

  • On 26 July 2011, the Emerging Economies Group (EEG) of the International Accounting Standards Board (IASB) was established in Beijing. EEG founding members are all emerging economies from the G20 and Malaysia.

  • More than 70 jurisdictions apply ISAs

  • Jul 11, 2011

  • On June 30 2011, Prof. Arnold Schilder, the Chairman of the IAASB, delivered a speech on global progress in the use of the Clarified International Standards on Auditing (ISAs) at the 2011 annual conference on Accounting and Accountability for Regional Economic Growth in Latin America and the Caribbean (referred to as CReCER after its Spanish/Portuguese acronym).

  • Malaysia exposes proposals for full convergence with IFRS

  • Jun 29, 2011

  • The Malaysian Accounting Standards Board (MASB) has issued an exposure draft, MASB Exposure Draft 75 IFRS-compliant Financial Reporting Standards (FRS) as part of achieving full convergence of Malaysian accounting requirements with with IFRS on 1 January 2012.

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