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MASB publishes exposure draft on financial instruments (7 December 2009)

The Malaysian Accounting Standards Board (MASB) today announced the issuance of exposure draft on Financial Instruments (MASB ED 69) which provides guidance on the classification and measurement of financial assets. The exposure draft is word-for-word to IFRS 9 Financial Instruments, that was issued by the International Accounting Standards Board (IASB) in November 2009.

The proposals in IFRS 9 Financial Instruments were exposed by the IASB in July 2009 as part of their comprehensive review of financial instrument accounting, currently being prescribed under IAS39 Financial Instruments: Recognition and Measurement. The review of IAS 39 is in response to and is consistent with the recommendations and timetable set out by the G20 leaders and other international bodies. 
 
Publication of IFRS 9 represents the completion of the first part of a three-part project to replace IAS 39 with a new standard. This first part of the project addresses the requirements on the classification and measurement of financial assets in IAS 39. Proposals addressing the second part, the impairment methodology for financial assets were published for public comment at the beginning of November, while proposals on the third part, on hedge accounting, continue to be developed.
 
MASB ED 69 enhances the ability of investors and other users of financial information to understand the accounting of financial assets and reduces complexity – an objective endorsed by G20 and other stakeholders internationally. It uses a single approach to determine whether a financial asset is measured at amortised cost or fair value, replacing the many different rules in FRS 139. The approach in MASB ED 69 is based on how an entity manages its financial instruments (its business model) and the contractual cash flow characteristics of the financial assets. 
 
The proposed standard also requires a single impairment method to be used, replacing the many different impairment methods in FRS 139. Thus MASB ED 69 improves comparability and makes financial statements easier to understand for investors and other users.
 
Interested parties, including the business communities, are encouraged to study the Exposure Draft and provide feedback to MASB. 
 
The exposure period expires on 23 December 2009.  The Exposure draft is available on MASB website at http://www.masb.org.my. The public is encouraged to provide their comments electronically through ED Online on our website. Alternatively, electronic copies of the exposure draft in CD format is available free of charge from MASB office.

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For enquiries, please contact:
Malaysian Accounting Standards Board
Wisma UOA Pantai
Suites 5.2, Level 5
No. 11, Jalan Pantai Jaya
59200 Kuala Lumpur
Tel: 03-2240 9200
Fax: 03-2240 9300
Email: masb@masb.org.my