Applicability Malaysian Financial Reporting Essay

Question:

Discuss About The Applicability Malaysian Financial Reporting.

Answer:

Introduction

On 15 March 2018, the Malaysian Accounting Standard Board (MASB) has issued Plan Amendment, Curtailment or Settlement under MFRS 119. It needs to be mentioned that International Accounting Standard Board (IASB) is responsible for this issue of MFRS 119 Employee Benefits plan. According to this amendment, a business entity is required to the updated actuarial assumptions for the determination of current cost of service and the amount of new interest for the remaining annual reporting period after the amendment of the plan, any curtailment and settlement at the time of the re-measurement benefit liability (masb.org.my, 2018).

Issue of Annual Improvements by MASB:

On 15 January 2018, MASB issued the Annual Improvements in some of the major MFRS standards for the financial year cycle from 2015 to 2017. The major standards under this amendment are MFRS 3 Business Combination and MFRS 11 Joint Arrangements for the amendment of previously held interest in a joint operation; MFRS 112 Income Taxes for the amendment of income tax consequences of payment on financial instruments classified as equity; and MFRS 123 Borrowing Costs for the amendments of borrowing costs eligible for capitalization. In this context, it needs to be mentioned that IASB is responsible for the issue of these amendments (masb.org.my, 2018).

Issue of Narrow-Scope Amendments to IFRS 9 and IAS 28 by IASB:

In 2017, IASB issued amendments related to IFRS 9 Financial Instruments and IAS 28 Investments in Associates and Joint Ventures for the ease in implementing these standards. With the assistance of the amendments in IFRS 9, business entities will be able in the measurement of particular pre-payable financial assets with the help of negative compensations at fair value or at the amortized costs through the comprehensive income in case of the meeting of the specified conditions. Apart from this, the amendment in IAS 28 provides the clarification that the companies are accountable for the long-term interest in the associates or the joint ventures in which there is no application for equity method by using IFRS 9 (masb.org.my, 2018).

Amendments to Private Entity Definition:

On 31 January 2017, MASB provided some major amendments in the definition of private entity. This amendment can be found in section 2 of the Companies Act 2016. According to this amendment, a private entity is a private company that has no requirement for the preparation of any financial statement under any law by Securities Commission or Bank Negara Malaysia. At the same time, no other company can make them subsidiary (masb.org.my, 2018).

Amendment for Financial Reporting by MASB: According to this amendment, all the private entities of Malaysia is required to comply with the principles and standards of Malaysian Financial Reporting Standards (MFRS) for the purpose of their annual reporting from the period beginning on or after 1 January 2018. This amendment has been issued as per Financial Reporting Act 1997 (Act 558) and Regulation 3 of the Financial Reporting Regulation 1999 (masb.org.my, 2018). It is required for all the private entities of Malaysia to comply with this amendment

References

Amendment to Private Entity Definition. (2018). Masb.org.my. Retrieved 1 April 2018, from

NOTICE – AMENDMENT TO THE EFFECTIVE DATE AND APPLICABILITY OF THE MALAYSIAN FINANCIAL REPORTING STANDARDS. (economy). Masb.org.my. Retrieved 1 April 2018, from

Welcome to MASB. (2018). Masb.org.my. Retrieved 1 April 2018, from

Welcome to MASB. (2018). Masb.org.my. Retrieved 1 April 2018, from

Welcome to MASB. (2018). Masb.org.my. Retrieved 1 April 2018, from

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