Foreword Full pg1

LEMBAGA PIAWAIAN PERAKAUNAN MALAYSIA
MALAYSIAN ACCOUNTING STANDARDS BOARD

Foreword to Financial Reporting Standards

Introduction

 

  • This Foreword explains the authority, scope and application of approved accounting standards issued or adopted by the Malaysian Accounting Standards Board (MASB). The Foreword also considers the procedures by which the MASB develops, issues and adopts accounting standards.

  • The Financial Reporting Act 1997 (the Act), established the Financial Reporting Foundation (FRF) and the MASB. Briefly, under section 4 of the Act, the function of the FRF is to be responsible for all the financing arrangements for the operations of the MASB, review the performance of the MASB, and provide its views on any matter that the MASB seeks to implement or undertake. The MASB is an independent statutory body and its aim is to continually improve the quality of external financial reporting in Malaysia and to contribute directly to the international development of financial reporting. The primary responsibility of the MASB1 is to issue new accounting standards, revise or adopt existing accounting standards, issue statements of principles, develop a conceptual framework and undertake public consultation in the determination of (the contents of its pronouncements.

  • The structure of the framework for the development and issue of financial reporting standards in Malaysia is premised upon broad participation by the business community. The membership of the FRF and MASB demonstrate that the responsibility for the setting of accounting standards is not the domain of the accounting profession but is spread across the broad spectrum of business in Malaysia. The FRF membership comprises of leading businessmen in Malaysia, heads of regulatory authorities such as the Securities Commission, the Bursa Malaysia Berhad, the Registrar of Companies, financial analysts and the accounting profession. The membership of the MASB is also broad and includes senior members of the accounting profession, financial analysts, finance directors, a senior representative from Bank Negara Malaysia and the Accountant-General.

  • The MASB initially adopted 24 of the extant International Accounting Standards (IASs) and Malaysian Accounting Standards (MASs) issued prior to the creation of the MASB by the Councils of the Malaysian Institute of Accountants (MIA) and the Malaysian Association of Certified Public Accountants (MACPA). Adoption by the MASB gave these IASs and MASs the status of approved accounting standards2. This status will apply until each IAS or MAS is amended, rescinded or replaced by a new Financial Reporting Standard.

  • Accounting standards issued by the MASB are designated as Financial Reporting Standards. The extant IASs and MASs approved by the MASB will continue to be known as IASs or MASs until each standard is amended, rescinded or replaced by a new Financial Reporting Standard.

  • By virtue of section 7 of the Financial Reporting Act 1997, it is the function of the MASB to issue accounting standards. Further, section 27 of (the Act requires that where financial statements are required to be prepared or lodged under any law administered by the Securities Commission, the Central Bank (Bank Negara Malaysia) or the Registrar of Companies, such financial statements shall be prepared in compliance with MASB approved accounting standard.

  • The MASB supports international harmonisation of financial reporting and as a consequence, its standards are developed with reference to) the work of other national standard setters such as Australia, Canada, New Zealand, the United Kingdom, the United States of America, as well as the International Accounting Standards Board (IASB). Accordingly, the Financial Reporting Standards are broadly consistent with present international practice. The standards are developed in accordance with the principles, objectives and concepts presented in the MASB's Discussion Paper 1, A Proposed Framework for Preparation and Presentation of Financial Statements (Proposed Framework). The objective of this Proposed Framework is to provide guidance for the consistent and logical formulation of individual accounting standards. Discussion Paper 1 also provides a basis on which other interested parties can exercise judgement in resolving accounting issues.

  • Under the Act, the MASB may issue technical pronouncements other than Financial Reporting Standards, including Statements of Principles, Urgent Issues Abstracts and Technical Releases. These technical pronouncements, constructed with due regard to local and international developments, provide views as to the appropriate accounting treatment for any particular issue within the framework of the law and the principles established in the MASB's Proposed Framework and other statements issued by the MASB. The technical pronouncements should be regarded as part of the corpus of practices forming the basis for determining what constitutes a true and fair view and should be read in conjunction with the Financial Reporting Standards. (These technical pronouncements are the subject of a separate section, entitled Foreword to Other MASB Technical Pronouncements, of this Foreword.)

    1 The functions of the Board are set out in Section 7(1) of the Financial Reporting Act 1997

    2 Financial Reporting Act 1997 defines "approved accounting standards" as statements of standard accounting practices, used for the preparation of financial statements, which are issued or approved by the Board.

 

 

Page | 1 2 3 4 5

Contact Us     |     Career     |     Disclaimer     |     Useful Links     |     FAQ

This site is best viewed with a resolution of 1024x768 (or higher) and supports Mozilla Firefox, Google Chrome and Safari. From the feedback we received, IE users may experience some interruptions when browsing this site.