MASB issues 4 exposure drafts (9 October 2009)

The Malaysian Accounting Standards Board (MASB) today announced the issuance of 4 exposure drafts. The exposure drafts are:

  • ED 67 Improving Disclosures about Financial Instruments (Amendments to FRS 7)
  • [draft] IC Interpretation 4 Determining whether an arrangement contains a lease
  • [draft] IC Interpretation 18 Transfers of Assets from Customers
  • ED i-4 Shariah Compliant Sale Contracts
ED 67, [draft] IC Interpretation 4 and [draft] IC Interpretation 18 are word for word to those issued by the International Accounting Standards Board (IASB). 

About the Exposure Drafts
ED 67 contains amendments to the disclosure standard for financial instruments. The IASB issue the Standard as part of its response to the global financial crisis. The improvements also reflect discussions by the IASB's Expert Advisory Panel on measuring and disclosing fair values of financial instruments when markets are no longer active. Enhanced disclosure requirements result in disclosures that better enable users to evaluate an entity's exposure to liquidity risk arising from financial instruments and how the entity manages this risk.
[draft] IC Interpretation 4 gives guidance on determining whether arrangements that do not take the legal form of a lease (eg some take-or-pay contracts) should, nonetheless, be accounted for in accordance with FRS 117 Leases. The [draft] IC Interpretation specifies that an arrangement contains a lease if it depends on the use of a specific asset and conveys a right to control the use of that asset.
[draft] IC Interpretation 18 proposes to clarify the requirements of FRSs for agreements in which an entity receives from a customer a fixed asset that the entity must then use either to connect the customer to a network or to provide the customer with ongoing access to a supply of goods or services (such as a supply of electricity, gas or water) or to do both. In some cases, the entity may receive cash from a customer for the acquisition or construction of such fixed assets.
ED i-4 was issued in response to concerns about accounting for Shariah compliant sale contracts. In particular, it aims to clarify when an item should be recognised or derecognised in the statement of financial position, the treatment of a financing element that may arise, and how to account for a Shariah compliant sale contract that is part of a series of transactions. This ED was developed in close alignment with the principles laid out in Statement of Principles i-1 Financial Reporting from an Islamic Perspective.
Interested parties, including the business communities, are encouraged to study the Exposure Drafts and Draft Interpretations and provide feedback to MASB. 
The exposure period expires on 13 November 2009. The Exposure drafts are 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, copies of the Exposure Drafts are available free of charge from MASB office.


For enquiries, please contact:
Malaysian Accounting Standards Board
Wisma UOA Pantai
Suites 5.02, Level 5
No. 11, Jalan Pantai Jaya
59200 Kuala Lumpur
Tel: 03-2240 9200
Fax: 03-2240 9300
Email: masb@masb.org.my