The Malaysian Accounting Standards Board (MASB) today issued limited amendments to the Malaysian Private Entities Reporting Standard (MPERS). These amendments shall be effective for annual periods beginning on or after 1 January 2017, but early application is permitted.
MASB chairman Encik Mohamed Raslan Abdul Rahman advises, “Although the amendments take effect in January 2017, private entities can choose to apply the amendments from January 2016, which is when the private entities will be mandated to first adopt the MPERS. I encourage the private entities to take time to review the amendments and consider the benefits of early adoption.”
Commenting on the adoption of MPERS by the private entities, the CEO of Suruhanjaya Syarikat Malaysia, Dato’ Zahrah Abdul Wahab Fenner said, “This is an important step towards preparing the private entities or the SMEs for globalisation. The SMEs will be able to create new opportunities and could also be facing enormous challenges through globalisation. It is therefore important and relevant that the SMEs in Malaysia adopt a global financial reporting language that is not only up-to-date, but also have been adopted by other 73 countries around the world.”
Effective for annual periods beginning on or after 1 January 2016, the MPERS is identical to the International Financial Reporting Standard for Small and Medium-sized Entities (IFRS for SMEs) except for the requirements on property development activities and some terminology changes.
The IFRS for SMEs was first issued by the International Accounting Standards Board (IASB) in 2009. To ensure the requirements stay relevant and updated, the IASB conducts a comprehensive review of the IFRS for SMEs once every three years.
Following such a review that started in 2012, the IASB has recently issued limited amendments to the IFRS for SMEs. These amendments are expected to improve the understanding of the existing requirements without having a significant effect on financial reporting practices and financial statements.
Therefore, to ensure the MPERS also remains relevant and updated, the MASB is adopting the limited amendments.
The most significant change is that private entities are allowed the option of revaluing property, plant and equipment. Private entities that are applying the revaluation model under the existing Private Entities Reporting Standards will certainly welcome this amendment because they can continue applying the revaluation policy when they adopt the MPERS.
The other amendments mainly clarify existing requirements or add supporting guidance, rather than change the underlying requirements in the MPERS.
Private entities that wish to apply the amendments early, instead of for annual periods beginning on or after 1 January 2017, must apply the amendments in their entirety.
The MPERS defines a private entity as a private company incorporated under the Companies Act 1965 that is not a company required by the Securities Commission or Bank Negara to prepare or lodge any financial statements. In addition, a private entity is not a subsidiary or associate of, or jointly controlled by, an entity that is required by the Securities Commission or Bank Negara to prepare or lodge any financial statements.
The MASB’s Notice of Issuance on the amendments can be downloaded here.
For enquiries, please contact:
Suite 5.2, Level 5 Wisma UOA Pantai,
No. 11, Jalan Pantai Jaya,
59200 Kuala Lumpur
If you require further information, please do not hesitate to contact us at +603-2240 9200, or fax at +603-2240 9300, or e-mail at email@example.com.