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MASB invites comments on 4 Exposure Drafts (27 February 2009)

The Malaysian Accounting Standards Board (MASB) released today for public comments four Exposure Drafts.  The Exposure Drafts are:

  • ED 61 Presentation of Financial Statements 
  • ED 62 Improvements FRSs
  • ED 63 Amendments to Standards on Financial Instruments 
  • ED i-3 Presentation of Financial Statements of Islamic Financial Institutions 

These Exposure Drafts are virtually identical to that of International Financial Reporting Standards (IFRSs).

ED 61 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 and to introduce a statement of comprehensive income. This proposal will enable readers to analyse transactions between the company and shareholders separately from transactions with external parties. ED 61 also proposes to change the titles of some of the financial statements to reflect their function more clearly ie balance sheet is renamed as statement of financial position amongst others. To maintain consistency among the Standards, the Board has also decided to amend its standard on presentation of financial statements of Islamic financial institutions. Towards this end, ED i-3 has been issued to mirror the changes proposed in ED 61.

ED 62 contains amendments to twenty Financial Reporting Standards (FRSs). These proposed amendments are as a result of the International Accounting Standards Board (IASB) initiative to start an annual improvements project to address necessary but non-urgent amendments to existing IFRSs. Some of the proposals may involve accounting changes to presentation, recognition or measurement whilst some may just involve changes to terminology with little effect on accounting. Among the more pertinent proposals is the accounting for government loans where such loans will have to be measured using market interest rate. 

ED 63, as the name describes, contains amendments to existing Standards on Financial Instruments: namely FRS 132 Financial Instruments: Disclosure and Presentation, FRS 139 Financial Instruments: Recognition and Measurement and FRS 7 Financial Instruments: Disclosures. The proposal on FRS 132 will improve the accounting for certain financial instruments with characteristics similar to ordinary shares but at present classified as financial liabilities. With this proposal entities will be able to classify them as equity if they have particular features and meet specific conditions.

The proposals to FRS 139 will permit the reclassification of non-derivative financial assets out of the 'fair value through profit or loss' and 'available-for-sale' categories in rare circumstances. This proposal was put in place by the IASB last year in response to the global credit crisis to restore confidence to financial markets. To make transparent to users about the reclassifications, additional disclosures are required under FRS 7. Under current FRS 139, reclassification of financial assets out of these categories is prohibited.

Dato' Zainal Abidin Putih, Chairman of the MASB, said, "Although these proposals are already effective internationally, the Board welcomes constructive comments from the public that will improve the Standards further. The Board is constantly in touch with the IASB whose mission is to develop, in the public interest, a single set of high quality IFRSs for general purpose financial statements."

Interested parties, including the business communities, are encouraged to study the Exposure Drafts and provide feedback to MASB. The exposure periods expire on 3 April 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.


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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