CHAPTER 1

AN OVERVIEW OF THE
FINANCIAL REPORTING IN
MALAYSIA
OBJECTIVES
 Understand the development of financial
accounting and reporting practices in
Malaysia
 Understand the statutory
regulations/requirements of financial
reporting
 Understand the setting of accounting
standards in Malaysia
THE DEVELOPMENT OF FINANCIAL ACCOUNTING
AND REPORTING PRACTICES IN MALAYSIA

The origin of financial reporting in

M’sia(Financial reporting regulations)
1. Company Ordinances 1940,1946,1956
2. Companies Act 1965, Ninth schedule(the
revised Ninth schedule till now)

The origin of financial reporting in

M’sia(Accounting profession)
3. Malaysian Institute of Certified Public
Accountants(MICPA) 1958
4. Malaysian Institute of Accountants 1967
5. Securities Commission(SC) 1993
THE DEVELOPMENT OF FINANCIAL ACCOUNTING
AND REPORTING PRACTICES IN MALAYSIA

Current Financial Reporting Regime

1. Financial Reporting Foundation(FRF)
2. Malaysian Accounting Standards
Board(MASB)
Both bodies were established under Financial
Reporting Act 1997.
FRF acts as an overseeing body of the
operation and activities of the MASB.

FRF Function ??? refer pg 3

MASB Function??? refer pg 3
THE STATUTORY REGULATIONS /REQUIREMENTS
OF FINANCIAL REPORTING

1. The Financial Reporting Act 1997

2. The Companies Act 2016
3. The Income Tax Act 1967
4. The Securities Commission Act 1993
5. The Audit Oversight Board 2010 (established
under part 111A of SCA 1993)
6. Capital Market and Service Act 2007, Section 15
(Bursa Malaysia)
7. Banking and Financial Institutions Act 1989
(Bank Negara Malaysia)
BNM/GP3
BNM/GP8
THE SETTING OF ACCOUNTING STANDARDS IN
MALAYSIA
Before the current financial reporting regime:
1. MIA
2. MICPA
(Both bodies are private sector)
Role: to ensure widest compliance with the
approved standards in the published financial
statements.
THE SETTING OF ACCOUNTING STANDARDS
IN MALAYSIA
Under the current financial reporting regime:

Due process of the MASB before 2004

1. 1997 , MASB standards were developed with
reference to International Accounting
Standards Committee(IASC)
2. 1998 , MASB adopted 24 IASs and MASs
issued by MIA and MICPA.
3. 2004 , 32 MASB standards, 1 IAS, 3 MASs,
1 TR( technical release) were effective for
application.
THE SETTING OF ACCOUNTING STANDARDS
IN MALAYSIA
Due process of the MASB after 2003
1. 2004 , MASB standards were renamed as
Financial Reporting Standards (FRSs).
2. 2008, FRF and MASB had planned to bring
Malaysia to full convergence with IFRS in
2012.
3. 2011, name change from IFRS-compliant
Financial Reporting Standards to MFRS
Framework.
4. 1/1/2014, MFRSs = IFRSs. Refer pg 21
PRIVATE ENTITY REPORTING STANDARDS

All private entities in Malaysia should apply PERS. (effective

February 2006) or MFRS.
PERS – Private Entity Reporting Standards.

Due process,
1. 2013, MASB issued MASB Exposure Draft ED77 Malaysian
Private Entities Reporting Standard to propose a single
MPERS Framework for private entity reporting in
Malaysia.
2. February 2014, MPERS Framework was endorsed as a
Standard for application by private entities which is
based on IFRS for Small and Medium-Sized Entities.
3. Effective 2016, Malaysia will use MPERS(previously
known as PERS) for its private entities.
THE TERMS
 IFRS – International Financial Reporting
Standards
 MFRS – Malaysian Financial Reporting
Standards
 IAS – International Accounting Standards
 IC – Interpretation Committee
 IFRIC – International Financial Reporting
Interpretations Committee(IFRS
Interpretations Committee)
 SIC – Standard Interpretations Committee