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MASB Approved Accounting Standards for Private Entities

Private entities shall comply with either:

  1. Malaysian Private Entities Reporting Standard (MPERS) in their entirety for financial statements with annual periods beginning on or after 1 January 2016; or
  2. Private Entity Reporting Standards (PERS) in their entirety for financial statements with annual periods beginning before 1 January 2016 (see Notice of Withdrawal dated 14 February 2014); or
  3. Malaysian Financial Reporting Standards (MFRS) in their entirety.

A Private Entity that has in the alternative applied FRSs as its financial reporting framework shall disclose when it will first present financial statements in accordance with the MFRS Framework or the Malaysian Private Entity Reporting Standard (MPERS). The entity shall not revert to apply FRSs if it has adopted the MFRS Framework or the MPERS even if it meets the criteria to do so (see Notice of Issuance dated 28 October 2015)

Private entities that have applied FRSs shall apply either MFRS or the MPERS for annual periods beginning on or after 1 January 2018.

Definition of a Private Entity

A private entity is a private company incorporated under the Companies Act 1965 that

  •  
is not itself required to prepare or lodge any financial statements under any law administered by the Securities Commission or Bank Negara Malaysia; and
  •  
is not a subsidiary or associate of, or jointly controlled by, an entity which is required to prepare or lodge any financial statements under any law administered by the Securities Commission or Bank Negara Malaysia.

On 28 February 2017, the MASB had revised the Private Entity definition with the coming into operation of the Companies Act 2016 and Interest Schemes Act 2016, both on 31 January 2017. The revised definition is as follows and shall be applied for financial statements with annual periods ending on or after 31 January 2017:

private entity is a private company as defined in section 2 of the Companies Act 2016 that –

  • is not itself required to prepare or lodge any financial statements under any law administered by the Securities Commission or Bank Negara Malaysia; and
  • is not a subsidiary or associate of, or jointly controlled by, an entity which is required to prepare or lodge any financial statements under any law administered by the Securities Commission or Bank Negara Malaysia.

Notwithstanding the above, a private company that is itself, or is a subsidiary or associate of, or jointly controlled by, an entity that is a management company as defined in section 2 of the Interest Schemes Act 2016 is not a private entity.

The meaning of ‘subsidiary’, ‘associate’ and ‘jointly controlled’ are as respectively defined and explained in MFRS 10 Consolidated Financial Statements / FRS 10 Consolidated Financial StatementsMFRS 128 Investments in Associates and Joint Ventures / 
FRS 128 Investments in Associates and Joint Ventures and MFRS 11 Joint Arrangements FRS 11 Joint Arrangements.

An entity may only be treated as a private entity in relation to such annual periods or annual periods throughout which it is a private entity.

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Copyright

These Standards contain material in which the International Financial Reporting Standards (IFRS) Foundation holds copyright and have been reproduced with the permission of the IFRS Foundation. Copyright in the International Financial Reporting Standards (including International Accounting Standards and Standing Interpretations Committee (SIC) and International Financial Reporting Interpretations Committee (IFRIC) Interpretations), International Accounting Standards Board (IASB) Exposure Drafts, and other IASB publications belong to the IFRS Foundation.

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