MASB seeks views on financial reporting by private entities (29 February 2012)

The Board is issuing the RFV in light of the comments received from its previous exposure drafts (ED), namely ED 52 Private Entity Reporting Standards, ED 72 Financial Reporting Standards for Small and Medium-sized Entities and ED 74 Amendments to Financial Reporting Standards arising from Reduced Disclosure Requirements. ED 52 was issued back in 2006 while ED 72 and ED 74 were issued in 2010.

The RFV focuses on soliciting comments on the following broad issues:

  • Whether the existing Private Entity Reporting Standards (PERS) should be replaced by ED 52, ED 72 or ED 74. Based on a survey conducted, ED 72 (which may be subject to review by the International Accounting Standards Board soon) was the preferred option. However there was also support for ED 74 given there will not be any recognition and measurement differences with the Malaysian Financial Reporting Standards (MFRSs).
  • Whether there are any immediate changes that the PERS framework requires if private entities continue applying it until the new standards are in place. Many have expressed concerns that the PERS have not kept pace with the changing business environment and MFRSs as it was developed based on 2003-version of International Accounting Standards. As a practical expedient, the Board may consider reviewing the PERS Framework if there are areas that need immediate improvement or amendment so as to mitigate the increasing concerns about the gap differences between PERS and MFRS reporting.
  • Whether the proposed timeframe is sufficient to enable a private entity to properly transition to the new financial reporting requirements.  Many private entities currently apply the PERS given it is a set of simpler standards. As a consequence time is required to conduct training and possibly system changes may be required to implement the new standards. The Board is proposing to replace the PERS with a new set of standards in 2015 to take effect for accounting periods beginning on or after 1 January 2016.

Taking into consideration these concerns and issues, and the important role that private entities play in the economy, the Board believes that it is critical for affected parties to provide its feedback on the future financial reporting framework for private entities in Malaysia.

The public is encouraged to provide their views on or before 29 June 2012 electronically through the "Comment Online" feature on our website by mail, fax or e-mail to:

The Technical Director

Malaysian Accounting Standards Board

Suite 5.02, Level 5 Wisma UOA Pantai

No 11 Jalan Pantai Jaya

59200 Kuala Lumpur

Fax: +603 2240 9300

Email: technical@masb.org.my

Click here to download the Request for Views