19 May 2010
Meeting with REHDA on IC Interpretation 15
The Secretariat held a meeting specifically to discuss the notion of continuous transfer of control, risks and rewards in relation to IFRIC 15 Agreements for the Construction of Real Estate. The purpose of the meeting was to clarify differing views in Schedule G & H of the Housing Development Act between REHDA (Real Estate and Housing Developers Act) and MIA FRSIC Special Task Force in Property Development.
Several points with regards to the nature of risks and rewards in property development were discussed. These include:
• Capacity to use the real estate in its current state
• Change in the fair value of real estate
• Risk of the construction not being completed and rights of the buyer in the event of bankruptcy of the developer
• Risk over the construction itself
• Default of the buyer
• Control of timing of construction
Amongst the participants who took part in the meeting were representatives from MIA FRSIC, lawyers, REHDA, Bursa Malaysia, SP Setia Berhad, Sime Darby Berhad, Gamuda Land Berhad, MAZARS Malaysia and CTIM.