MASB issues amendments to MFRS 101 regarding the classification of debt with covenants

The Malaysian Accounting Standards Board (MASB) has today issued Non-current Liabilities with Covenants (Amendments to MFRS 101 Presentation of Financial Statements). 

The Amendments is word-for-word Non-current Liabilities with Covenants (Amendments to IAS 1 Presentation of Financial Statements) issued by the International Accounting Standards Board (IASB). 


Amendments to MFRS 101 clarifies how conditions with which an entity must comply within 12 months after the reporting period affect the classification of a liability.

MFRS 101 requires an entity to classify debt as non-current only if the entity can avoid settling the debt in the 12 months after the reporting date. However, an entity’s ability to do so is often subject to complying with covenants. 

Amendments to MFRS 101 specifies that covenants to be complied with after the reporting date do not affect the classification of debt as current or non-current at the reporting date. Instead, the Amendments requires an entity to disclose information about these covenants in the notes to the financial statements.

The Amendments is expected to improve the information an entity provides about long-term debt with covenants by enabling investors to understand the risk that such debt could become repayable early.

Amendments to MFRS 101 shall apply for annual reporting periods beginning on or after 1 January 2024. Earlier application is permitted. 

The “Notice of Issuance” can be downloaded here


For enquiries, please contact:

Malaysian Accounting Standards Board
Unit 13A-1, Menara MBMR
No. 1, Jalan Syed Putra
58000 Kuala Lumpur
Tel: 03-2273 3100
Fax: 03-2273 9400