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MF10/2012: MASB extends transitional period for agriculture and real estate companies |
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MF10/2012 |
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11 Jul 2012 |
Circular MF10/2012 |
TO ALL MEMBER FIRMS
MASB EXTENDS TRANSITIONAL PERIOD FOR AGRICULTURE AND REAL ESTATE COMPANIES
The Malaysian Accounting Standards Board (“MASB”) has, on 30
June 2012, announced to allow entities that are within the scope
of MFRS 141 Agriculture and / or IC Interpretation 15 Agreements
for Construction of Real Estate, including its parent,
significant investor and venturer (“Transitioning Entities”), to
defer the adoption of the Malaysian Financial Reporting
Standards (“the MFRS Framework”) for another year. Accordingly,
adoption of the MFRS Framework by Transitioning Entities will be
mandatory for annual periods beginning on or after 1 January
2014.
In November 2011, the MASB published the MFRS Framework which is
to be applied by all non-private entities with effect from 1
January 2012, with the exception of Transitioning Entities. The
Transitioning Entities have the option to select either the MFRS
Framework or the Financial Reporting Standard (“FRS”) Framework
as their financial reporting framework for annual periods
beginning on or after 1 January 2012.
When the MASB made the decision for the Transitioning Entities,
it was based on the International Accounting Standards Board’s
(“IASB”) October 2011 work plan. At that time, the IASB planned
that by second half of 2012, it would issue the new Revenue
standard, following which IFRIC 15 Agreements for Construction
of Real Estate (the equivalent of IC Interpretation 15) would be
withdrawn. They were also to finalise their decision on the
Agenda Consultation of which a limited amendment to IAS 41
Agriculture (the equivalent of MFRS 141) was listed as one of
the project suggestions.
However, according to recent development at the IASB, the new
Revenue standard is now expected to be issued by mid of 2013.
Furthermore, the MASB noted that it is unlikely that potential
amendments to IAS 41 in relation to bearer crops will be
finalised prior to 2013.
In view of these developments, the MASB has decided that
Transitional Entities will be given an option of another year to
continue with the existing FRS Framework so as to avoid the
possibility of repetitive material restatement in the financial
statements.
Please be guided accordingly.
HO FOONG MOI (MS)
Acting Chief Executive Officer
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