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MASB issues 4 amendments to FRSs, 1 technical release, 1 statement of principle and withdraws 1 FRS (15 September 2009)

The Malaysian Accounting Standards Board (MASB) today announced the issuance of amendments to Financial Reporting Standards (FRSs). The amendments to FRSs, which are word for word to those issued by the International Accounting Standards Board (IASB), are:

  • FRS 101 Presentation of Financial Statements
  • Amendments to FRS 132 Financial Instruments: Presentation
  • Amendments to FRS 139 Financial Instruments: Recognition and Measurement, FRS 7 Financial Instruments: Disclosures and IC Interpretation 9 Reassessment of Embedded Derivatives
  • Amendments to FRSs contained in the document entitled 'Improvements to FRSs (2009)'
The Standards, already effective internationally, are mainly improvements issued by the IASB after their consultative process with standard-setters worldwide and interested parties.
 
MASB also issues 2 technical documents from the Islamic Perspective. The Technical Release (TR) and Statement of Principle (SOP) issued are TR i-3 Presentation of Financial Statements of Islamic Financial Institutions and SOP i-1 Financial Reporting from an Islamic Perspective respectively. TR and SOP are developed within the framework of the law and MASB approved accounting standards to provide additional guidance on the application of MASB's pronouncements. 
 
With the issuance of TR i-3, the Board gives notice for the withdrawal of FRS i-12004 Presentation of Financial Statements of Islamic Financial Institutions. The issuance of TR i-3 is in line with the Board's policy that MASB approved accounting standards will apply to Islamic transactions and any additional guidance will be in the form of Technical Releases.

About the Standards
 
FRS 101 aims to improve users' ability to analyse and compare the information given in financial statements. It requires information in financial statements to be aggregated on the basis of shared characteristics to enable readers analyse transactions between the company and shareholders separately from transactions with external parties. FRS 101 also changes the titles of the financial statements to reflect their function more clearly, for example, balance sheet is renamed as statement of financial position amongst others.
 
Amendments to FRS 132 and FRS 139 aim to improve the accounting for financial instruments. The Amendments to FRS 132 will enable non-corporate shareholders' interests in open ended funds, closed ended funds, co-operatives and partnerships to be presented as equity rather than liabilities. The Amendments to FRS 139 was put in place by the IASB in response to the global credit crisis to restore confidence to financial markets. The amendment is made to permit entities to transfer certain financial assets held for trading to either the held to maturity, loans or available for sale categories. The amendment also allows transfers of certain financial assets from available for sale to loans category. To make transparent to users about the transfers, additional disclosures are required under FRS 7. 
 
Improvements to FRSs (2009) contain amendments to twenty two FRSs. These amendments are as a result of the IASB initiative to start an annual improvements project to address necessary but non-urgent amendments to existing International Financial Reporting Standards (IFRSs). Some of the improvements involve accounting changes to presentation, recognition or measurement whilst some are changes to terminology with little effect on accounting. In view of the IFRS convergence plan in 2012, MASB has accelerated the adoption due process of some of the Improvements to enable constituents to apply the latest improved version of the IFRS so as to be in the same level playing field with others internationally. 
 
TR i-3 retains the additional guidance in FRS i-12004 on presenting financial statements of Islamic financial institutions that is not provided in FRS 101. Among others, the additional guidance relates to disclosure of unusual supervisory restrictions imposed on an Islamic financial institution, disclosure of the distribution of investment accounts and their equivalent, and disclosure of the method of allocating income from various categories of deposits if the Islamic financial institutions co-mingle various types of deposits into a single pool of funds. This TR is to be read in conjunction with FRS 101.
 
SOP i-1 sets out the principles that MASB believes should underlie its future pronouncements on financial reporting from an Islamic perspective. It is concerned with the display and presentation of information that, from an Islamic perspective, should form part of financial reporting. The deliberations will form the basis upon which future pronouncements on financial reporting from an Islamic perspective will be developed. This Statement complements, and is to be read in conjunction with, the Framework for the Preparation and Presentation of Financial Statements. The main principle in SOP i-1 is that Shariah compliant transactions and events shall be accounted for in accordance with MASB approved accounting standards, unless there is a Shariah prohibition.
 
The new pronouncements are available from MASB website (http://www.masb.org.my) or can be purchased in booklet form from MASB office.

Click here for the Notice of Issuance.

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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