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MASB outlines new private entities financial reporting framework

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02 Mar 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.

Currently, private entities are using either the MASB’s Private Entity Reporting Standards (PERS) or the Malaysian Financial Reporting Standards (MFRSs), which are equivalent to IFRSs, for their financial reporting. In the roadmap, the MASB proposes an outline for a differential reporting regime for private entities, which requires medium-sized private entities (annual revenue at or above RM500,000) to use the FRS for SMEs and all other private entities that do not meet the criterion of a medium-sized entity to continue to use the existing PERS framework. Both medium- and micro-sized private entities would still have the option to use full MFRSs.

The IASB is currently developing guidance suitable for micro-sized entities that are applying IFRS for SMEs. When the guidance becomes available, the MASB will evaluate and consider if changes need to be made to its policy decision on micro-sized entities.

Comments for the questions raised in the roadmap are due by 6 May 2013.

The press release and the roadmap are available on the MASB website:

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