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Include Left Circulars & Resources
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MF13/2012: MASB Issues New and Amendments to Standards |
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MF13/2012 |
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08 Aug 2012 |
Circular MF13/2012 |
TO ALL MEMBER FIRMS
MASB ISSUES NEW AND AMENDMENTS TO STANDARDS
The Malaysian Accounting Standards Board (“MASB”) has, on 31 July 2012, issued the following pronouncements which are equivalent to the International Financial Reporting Standards ("IFRSs") as issued by the International Accounting Standards Board (“IASB”):
Malaysian Financial Reporting Standards ("MFRSs")
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Amendments to MFRSs contained in the document entitled “Annual
Improvements 2009-2011 Cycle” |
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Consolidated Financial Statements, Joint Arrangements and
Disclosure of Interests in Other Entities: Transition Guidance
(Amendments to MFRS 10, MFRS 11 and MFRS 12) |
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MFRS 3 Business Combinations (IFRS 3 Business Combinations
issued by IASB in March 2004) |
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MFRS 127 Consolidated and Separate Financial Statements (IAS 27
Consolidated and Separate Financial Statements revised by IASB
in December 2003) |
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Financial Reporting Standards ("FRS")
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Amendments to FRSs contained in the document entitled
"Improvements FRSs (2012)" |
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Consolidated Financial Statements, Joint Arrangements and
Disclosure of Interests in Other Entities: Transition Guidance
(Amendments to FRS 10, FRS 11 and FRS 12) |
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The amendments to MFRSs are applicable to all Entities Other Than Private Entities while the amendments to FRSs are applicable to Transitioning Entities that have elected to continue applying FRSs in 2012 and 2013.
Entities are required to apply the amendments for annual periods beginning on or after 1 January 2013. Earlier application is permitted.
ABOUT THE PRONOUNCEMENTS
Annual Improvements 2009-2011 Cycle
Annual Improvements 2009-2011 Cycle makes amendments to the following five standards:
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MFRS 1 First-time Adoption of Malaysian Financial Reporting
Standards
- Repeated application of MFRS 1
- Borrowing cost |
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MFRS 101 Presentation of Financial Statements
- Clarification of the requirements for comparative information |
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MFRS 116 Property, Plant and Equipment
- Classification of servicing equipment |
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MFRS 132 Financial Instruments: Presentation
- Tax effect of distribution to holders of equity instruments |
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MFRS 134 Interim Financial Reporting
- Interim financial reporting and segment information for total
assets and liabilities |
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Similar amendments are also made to FRSs.
MFRS 1 First-time Adoption of Malaysian Financial Reporting Standards
The amendment clarifies that an entity that has stopped applying MFRSs or IFRSs may choose to either apply MFRS 1 or apply MFRSs retrospectively in accordance with MFRS 108 Accounting Policies, Changes in Accounting Estimates and Errors in order to resume reporting under MFRS.
Also, MFRS 1 is amended to clarify that, upon adoption of MFRSs, an entity that capitalised borrowing costs in accordance with its previous GAAP, may carry forward, without adjustment, the amount previously capitalised in its opening statement of financial position at the date of transition. Once an entity adopts MFRS, borrowing costs are recognised in accordance with MFRS 123 Borrowing Costs, including those incurred on qualifying assets under construction.
MFRS 101 Presentation of Financial Statements
The amendment clarifies that if an entity presents comparative information in addition to the minimum comparative financial statements, then that additional information need not be in the form of a complete set of financial statements. However, such information should be accompanied by related notes to the financial statements and should be prepared in accordance with MFRSs.
In addition, the third statement of financial position should be presented if a change in accounting policy, a retrospective restatement or a reclassification has a material effect on the statement of financial position. The related notes are not required to accompany the third statement of financial position.
MFRS 116 Property, Plant and Equipment
The amendment clarifies that items such as spare parts, stand-by equipment and servicing equipment shall be recognised as property, plant and equipment when they meet the definition of property, plant and equipment in MFRS 116. Otherwise, such items are accounted for using MFRS 102 Inventories.
MFRS 132 Financial Instruments: Presentation
The amendment clarifies that income tax relating to distributions to holders of an equity instrument and transaction costs of an equity transaction shall be accounted for in accordance with MFRS 112 Income Taxes.
MFRS 134 Interim Financial Reporting
The amendment clarifies that the requirements in MFRS 134 relating to segment information for total assets and liabilities for each reportable segment to enhance consistency with the requirements in MFRS 8 Operating Segments.
Total assets and liabilities for a particular reportable segment shall be disclosed only when the amounts are regularly provided to the chief operating decision maker and there has been a material change in the total amount disclosed in the entity’s previous annual financial statements for that reportable segment.
Consolidated Financial Statements, Joint Arrangement and Disclosure of Interests in Other Entities: Transition Guidance (Amendments to MFRS 10, MFRS 11 and MFRS 12)
The amendments explain that the ‘date of initial
application’ in MFRS 10 Consolidated Financial Statements
means ‘the beginning of the annual reporting period in which
MFRS 10 is applied for the first time’.
An entity would not be required to make adjustments to the
previous accounting for its involvement with entities if the
consolidation conclusion reached at the date of initial
application is the same as previous accounting or the entity
had disposed of its interests in investees during a
comparative period.
The amendments also clarify how an entity shall adjust
comparative period(s) retrospectively if the entity
concludes that it should consolidate an investee that was
not previously consolidated when applying MFRS 10 or it
should no longer consolidate an investee that was previously
consolidated. Additional transition relief is provided by
limiting the requirement to present adjusted comparative
information to the period immediately preceding the date of
initial application.
If, upon applying MFRS 10, an entity concludes that it needs
to consolidate an investee that was not previously
consolidated, and control was obtained before the effective
date of MFRS 3 Business Combinations and MFRS 127
Consolidated and Separate Financial Statements issued by the
MASB in November 2011, an entity can apply either the
earlier or the revised versions of MFRS 3 and MFRS 127. As a
result, the MASB has issued MFRS 3 (IFRS 3 issued by IASB in
2004) and MFRS 127 (IAS 27 as revised by IASB in 2003).
The amendments to MFRS 11 Joint Arrangements and MFRS 12
Disclosure of Interests in Other Entities provide similar
relief from the presentation or adjustment of comparative
information for periods prior to the period immediately
preceding the date of initial application. MFRS 12 is
further amended to provide additional relief by eliminating
the requirement to present comparatives for the disclosures
relating to unconsolidated structured entities for any
period before the first annual period for which MFRS 12 is
applied.
Similar amendments are also made to FRSs.
The new pronouncements may be downloaded from MASB's website
at http://www.masb.org.my or
can be purchased from MASB's office.
Please be guided accordingly.
HO FOONG MOI (MS)
Acting Chief Executive Officer |
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