IFRS convergence by 2012
Nov / Dec 2008
Malaysia has set 1 January 2012 as the deadline for full convergence with International Financial Reporting Standards (IFRS) which will be applicable to all entities other than private entities. Approximately one thousand public-listed companies and 20,000 subsidiary and associate companies will be affected by full IFRS compliance.
All of the current Financial Reporting Standards (FRSs) issued by the Malaysian Accounting Standards Board (MASB) are already compliant with IFRS. Malaysia has had a comparatively easy journey towards convergence since it has been incorporating the provisions of international accounting standards into local accounting standards since 1978, said MASB chairman Dato' Zainal Abidin Putih.
In the interim, the MASB will adopt another two standards in the phased changeover to full convergence: IAS 39 or FRS 139, Financial Instruments: Recognition and Measurement and IAS 41, Agriculture. Although FRS 139 has been issued since 2006, the effective date of the standard is 1 January 2010, which will hopefully provide sufficient time for companies to prepare for the transition to fair value accounting. IAS 41 is also anticipated to have a tremendous impact on Malaysian companies, particularly plantation companies, given that Malaysia is still the world's largest palm oil producer and the third-largest rubber producer.
The phased changeover is designed to support companies in the transition to IFRS. 'Staged implementation would ease the burden of a big bang in the year 2012. Since FRS 139 is an important standard in the FRS series with linkages to many other standards and interpretations, deferring FRS 139 to 2012 would mean delaying a host of other standards related to FRS 139,' said Dato' Zainal, explaining the significance of the chosen dates.
Under Malaysia's two-tier reporting system, private entities can either opt to adopt the FRSs or continue to apply Private Entity Reporting Standards (PERs), the version of IASs issued up until 2003. PERs have proven to be a practical reporting alternative for non-public enterprises, catering to the specific needs of stakeholders who are typically owner-managers.
Malaysia has set 1 January 2012 as the deadline for full convergence with International Financial Reporting Standards (IFRS) which will be applicable to all entities other than private entities. Approximately one thousand public-listed companies and 20,000 subsidiary and associate companies will be affected by full IFRS compliance.
All of the current Financial Reporting Standards (FRSs) issued by the Malaysian Accounting Standards Board (MASB) are already compliant with IFRS. Malaysia has had a comparatively easy journey towards convergence since it has been incorporating the provisions of international accounting standards into local accounting standards since 1978, said MASB chairman Dato' Zainal Abidin Putih.
In the interim, the MASB will adopt another two standards in the phased changeover to full convergence: IAS 39 or FRS 139, Financial Instruments: Recognition and Measurement and IAS 41, Agriculture. Although FRS 139 has been issued since 2006, the effective date of the standard is 1 January 2010, which will hopefully provide sufficient time for companies to prepare for the transition to fair value accounting. IAS 41 is also anticipated to have a tremendous impact on Malaysian companies, particularly plantation companies, given that Malaysia is still the world's largest palm oil producer and the third-largest rubber producer.
The phased changeover is designed to support companies in the transition to IFRS. 'Staged implementation would ease the burden of a big bang in the year 2012. Since FRS 139 is an important standard in the FRS series with linkages to many other standards and interpretations, deferring FRS 139 to 2012 would mean delaying a host of other standards related to FRS 139,' said Dato' Zainal, explaining the significance of the chosen dates.
Under Malaysia's two-tier reporting system, private entities can either opt to adopt the FRSs or continue to apply Private Entity Reporting Standards (PERs), the version of IASs issued up until 2003. PERs have proven to be a practical reporting alternative for non-public enterprises, catering to the specific needs of stakeholders who are typically owner-managers.
posted by Toyers at
10:16 AM
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