MASB Field Test: Future of Financial Reporting for Private Entities
The Malaysian Accounting Standards Board (MASB) in February 2012 published Request for Views – Private Entities, the Way Forward (RFV) to seek views from interested parties about the future financial reporting framework for private entities. The options being considered by the MASB to replace the existing Private Entities Reporting Standards (existing PERS) are follows:
(i) MASB ED 52 Private Entity Reporting Standards
(ii) MASB ED 72 Financial Reporting Standards for Small and Medium Sized Entities (FRS for SMEs)
(iii) MASB ED 74 Amendments to Financial Reporting Standards arising from Reduced Disclosure Requirements (RDR)
(iv) The upcoming revised IFRS for SMEs (IASB target effective date: 2015)
In view of the importance of the private entities framework in the financial reporting chain, the MASB decided to field test the proposals contained in FRS for SMEs and RDR with small and medium practitioners (field testers). By field testing them, the MASB hopes:
Field testers are asked to:
(1) provide background information about the selected entities*;
(2) submit the selected entities most recent annual financial statements under their existing accounting framework;
(3) prepare pro-forma financial statements in accordance with the proposed FRS for SMEs for the same financial year;
(4) prepare pro-forma financial statements in accordance with the proposed RDR for the same financial year; and
(5) respond to a series of questions designed to identify specific problems encountered during the field test when applying the proposed FRS for SMEs and RDR.
* The private entities to be selected should comprise one larger private entity and another smaller private entity so as to field test whether there need to be more than one set of accounting standards for private entities, i.e. whether the Board should consider issuing 2 sets of framework for private entities, one for the micro and the other for small and medium to large private entities.
The MASB is conducting the field test in collaboration with the Malaysian Institute of Accountants (MIA). Practitioners interested in participating in the field test, a field tester, should contact Cik Nadiah Mohammad of MIA. Field testers would be awarded 20 MIA CPE hours.
As field testers would be using the financial statements of its selected clients to conduct the field test, please submit the field test results directly to MIA to maintain confidentiality. The MIA will compile and analyse the results before submitting to MASB.
Field testers are required to submit the financial statements and questionnaires to MIA by 30 November 2012 to:
Cik Nadiah Mohammad
Assistant Manager, Professional Standards and Practices
Malaysian Institute of Accountants
No. 2, Jalan Tun Sambanthan 3
50470 Kuala Lumpur
Phone: +603-2279 9200
Field test questionnaire
To access the field test questionnaire, please click here
Field test briefing webcast
The MASB in collaboration with MIA held a briefing on the field test on 20 July 2012. Please click here for the link to the archived video file.You will then be prompted to enter a user id and a password. The user ID is “masb” and password is “masb”.
Model financial statements
The MASB has compiled links of model financial statements for the proposed FRS for SMEs and RDR from various sources for reference purposes only. To access the model financial statements click here.
Weekly teleconference calls
To help field testers respond to the questionnaire and prepare the pro forma financial statements, a weekly teleconference will be held beginning the week of 20 August 2012. Please refer to the MASB Meeting Calendar.
The teleconference schedule was prepared based on best information available at the time and are subject to changes. Hence, the MASB reserves the right to reschedule or cancel the teleconference. Notice of such changes will be given when possible.
The teleconference dial-in details are:
Dial in number: +603-8885 2600
Pin number: 426808#
Frequently asked questions (FAQ)
Below are some of the questions that the MASB staff received from field-testers with regard to the field test. The answers to the following questions have been prepared by the MASB staff and are not necessarily the Board’s views.
(i) What are the criteria of a ‘large’ and ‘small’ private entity as mentioned in the field test document?
A ‘large’ private entity refers to the largest entity in your portfolio, which can either be an entity that applies most standards in the proposed FRS for SMEs and RDR, has a high volume of transactions, has complex transactions, potentially has the ability to be listed in the stock exchange or has borrowings with financial institutions for working capital purposes.
On the other hand, a ‘small’ private entity refers to the smallest entity in your portfolio, which can either be an entity that applies few standards mentioned in the proposals, has minimal number and non-complex transactions.
MASB staff contact