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FOREWORD [REVISED (JULY 1999)]
The Foreword to MASB Standards and Other Technical Pronouncements (Foreword) explains the authority, scope and application of approved accounting standards and other technical pronouncements issued or adopted by the Malaysian Accounting Standards Board (MASB). The Foreword also deals with the procedures and due process by which the MASB develops and adopts accounting standards.
By virtue of section 27 of the Financial Reporting Act 1997, financial statements that 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, shall be prepared in compliance with MASB Standards.
According to Section 166A of the Companies Act 1965, approved accounting standards are to be applied in relation to any published accounts of commercial, industrial or business enterprises in Malaysia and of overseas subsidiaries and associated corporations where those accounts are to be incorporated in consolidated accounts in Malaysia. For the purposes of the Companies Act 1965 and the Financial Reporting Act 1997, MASB Standards issued, IASs and MASs adopted, by MASB are approved accounting standards.
The MASB initially adopted 24 of the extant International Accounting Standards (IASs) and Malaysian Accounting Standards (MASs) issued by the Malaysian professional accountancy bodies prior to the creation of the MASB. Adoption by the MASB gave these IASs and MASs the status of approved accounting standards until each of these standards is amended, rescinded or replaced by a new MASB Standard.
MASB Standards are developed in accordance with the principles, objectives and concepts presented in the MASB's A Proposed Framework for the Preparation and Presentation of Financial Statements. In addition, MASB 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, and the International Accounting Standards Committee (IASC). As such, MASB Standards are broadly consistent with present international practice. The due process for the development of MASB Standards is provided in Due Process Chart.
The MASB may issue technical pronouncements other than MASB Standards, including technical pronouncements such as Statement of Principles, Technical Releases and Interpretation Bulletin. Nothing in the technical pronouncements is to be construed as amending or overriding the MASB Standards or other statements issued by the MASB. These technical pronouncement are developed with due regard to both local and international treatments and within the framework of the law and the standards prescribed in MASB Standards and other statements issued by the MASB. The purpose of a technical pronouncement is to provide guidance on the application of generally accepted accounting principles to the resolution of a particular accounting issue. The issue of a pronouncement may also represent an interim measure prior to the issue of a MASB Standard.
The MASB's Standards are framed with due consideration of the balance between the benefit and cost of providing information. In recognition of this balance, the MASB may grant exemptions to selected enterprises from either the whole or nominated sections of a MASB pronouncement.