CIRCULAR MF15/2011: MASB EXPOSES IFRS-COMPLIANT FINANCIAL REPORTING STANDARDS

29 June 2011

Circular MF15/2011

ALL MEMBER FIRMS

MASB EXPOSES IFRS-COMPLIANT FINANCIAL REPORTING STANDARDS

The Malaysian Accounting Standards Board (“MASB”) has, on 28 June 2011, issued MASB Exposure Draft 75 “IFRS-compliant Financial Reporting Standards” (“MASB ED 75”), which proposes to replace the existing Financial Reporting Standards (“FRS”) in conjunction with the plan to fully converge with International Financial Reporting Standards (“IFRS”) on 1 January 2012.

At present, MASB tentatively decided that the new IFRS-compliant FRS framework shall be applicable in the financial reporting by an entity that does not meet the definition of a “private entity”, and the definition of a “private entity” is as defined in the Notice of Amendment of MASB Approved Accounting Standards for Entities Other Than Private Entities released on 23 February 2006. When the proposals in MASB ED 75 are put in place for adoption in 2012, the FRS framework in Malaysia will be recognised as being IFRS-compliant, hence the financial statements that are drawn up in accordance with the new IFRS-compliant FRS framework will be equivalent to the financial statements prepared in accordance with IFRS. Therefore, entities adopting the new IFRS-compliant FRS framework for the first time in the accounting periods beginning on or after 1 January 2012 are required to apply FRS 1 “First-time Adoption of Financial Reporting Standards” to enable such entities to assert full compliance with IFRS as issued by the International Accounting Standards Board .

Whilst significant impact arising from full convergence with IFRS is not expected, MASB has also indicated the intention to deal with entities affected by FRS 141 “Agriculture” and IC Interpretation 15 “Agreements for the Construction of Real Estate” separately.

In conjunction with the issuance of MASB ED 75, MASB would like to hear the views regarding the proposed IFRS-compliant FRS framework and the possible implementation issues in complying with the standards under the new IFRS-compliant FRS framework. The said exposure draft is available for download on the MASB website at http://www.masb.org.my.

Members are encouraged to study the exposure draft and provide feedback to the Institute at technical@mia.org.my by 22 July 2011 for onward submission to MASB.

We look forward to receiving your comments.