november 2008 examination - The Malaysian Institute Of Certified ...

PROFESSIONAL NEWSMASB UpdateMalaysia’s Convergencewith IFRS in 2012In a press release dated August 1, 2008, the FinancialReporting Foundation (FRF) and the Malaysian AccountingStandards Board (MASB) issued a statement about theirplans to bring Malaysia to full convergence withInternational Financial Reporting Standards (IFRS) by 1January 2012.MASB’s chairman, YBhg Dato’ Zainal Abidin Putihsaid, “Since 1978, we have been incorporating the provisionsof the international standards into our local accountingstandards; and today we are convinced that by becomingfully IFRS compliant, Malaysia’s capital and financialmarket will be further enhanced.”Compliance with IFRS, which are used by more than ahundred countries around the world, will facilitatecomparability and increase transparency. He added,“However, we’re not jumping on the bandwagon for the sakeof joining the crowd. IFRS is really a robust set of standards.Because of the international consultative approach tostandard-setting, a lot of thought has gone into IFRS. It getsinput from literally hundreds of people with diverseexpertise, from diverse jurisdictions.”To facilitate a phased changeover to IFRS, the effectivedate for applying FRS 139 Financial Instruments: Recognitionand Measurement will be January 1, 2010. By 2012, allapproved accounting standards applicable to entities otherthan private entities will converge fully with IFRS. Thisconvergence plan will not affect private entities that arecurrently applying the Private Entity Reporting Standards(PERS). Private entities will continue to apply PERS until suchtime the Board decides otherwise.Dato’ Johan Raslan, chairman of the FinancialReporting Foundation (FRF), the oversight body of the MASB,explains the changeover milestones. He said, “Othereconomies, such as Korea, India and Canada haveannounced IFRS convergence by 2011,” he said. "With theadoption of FRS 139 in 2010, and a further 2 years to adoptthe remaining standards, 2012 is considered the right datefor convergence.”Dato’ Zainal advises, “We hope that with thisadvanced notice, companies will have sufficient time toprepare themselves for the changeover.” He understandsthat many of them have been preparing for the changeover.“All of our current standards have already incorporated IFRSprovisions anyway. Only a few more substantive standardsneed to be formally adopted between now and 2012, and wehave already discussed those with the affected parties.”Welcoming the decision, Securities CommissionChairman Dato’ Zarinah Anwar said, “Businesses operate inan increasingly global environment. Therefore, this movewill help to give Malaysian companies and our capitalmarket the recognition they deserve.”(Source: www.masb.org.my)Dear Readers,If you have any article, which inyour view, is suitable for inclusion inour columns, please send the article tothe Editorial Board at the address belowor via e-mail.We will be happy to review thearticle for publication in this journal.Kindly contact:Public Affairs &Communications ManagerThe Malaysian Institute ofCertified Public Accountants15 Jalan Medan Tuanku50300 Kuala LumpurE-mail: vic.pr@micpa.com.my26 | The Malaysian Accountant | August 2008 www.micpa.com.my