Malaysian Private Entities Reporting Standard (MPERS)

1 I LEMBAGA PIAWAIAN PERAKAUNAN MALAYSIA Malaysian ACCOUNTING standards BOARD Malaysian Private Entities Reporting Standard ( mpers ) Malaysian Accounting standards Board (February 2014) ii This publication contains materials in which the IFRS Foundation holds copyright. Copyright in the International Financial Reporting standards (including International Accounting standards and SIC and IFRIC Interpretations), International Accounting standards Board (IASB) Exposure Drafts, and other IASB publications belong to the IFRS Foundation. All rights are reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means without the prior permission in writing to the MASB or as may be expressly permitted by law or under terms agreed with the appropriate reprographics rights organisation.

2 No part of the materials incorporated in this publication, the copyright of which is held by the IFRS Foundation, may be reproduced, stored in a retrieval system or transmitted in any form or by any means without the prior permission in writing to the IFRS Foundation or as may be expressly permitted by law or under terms agreed with the appropriate reprographics rights organisation. The Malaysian Private Entities Reporting Standard ( mpers ) is issued by the MASB in respect of its application in Malaysia. IFRS Foundation iii CONTENTS page Malaysian Private Entities Reporting Standard ( mpers ) Preface to the mpers 1 Section 1 Private Entities 5 2 Concepts and Pervasive Principles 7 3 Financial Statement Presentation 17 4 Statement of Financial Position 25 5 Statement of Comprehensive Income and Income Statement 29 6 Statement of Changes in Equity and Statement of Income and Retained Earnings 33 7 Statement of Cash Flows 35 8 Notes to the Financial Statements 41 9 Consolidated and Separate Financial Statements 43 10 Accounting Policies, Estimates and Errors 51 11 Basic Financial Instruments 57 12 Other Financial Instruments Issues 73 13 Inventories 81 14 Investments in Associates 87 15 Investments in Joint Ventures 91 16 Investment Property 95 17 Property.

3 Plant and Equipment 99 18 Intangible Assets other than Goodwill 107 19 Business Combinations and Goodwill 113 20 Leases 119 21 Provisions and Contingencies Appendix Guidance on recognising and measuring provisions 127 22 Liabilities and Equity Appendix Example of the issuer s accounting for convertible debt 137 23 Revenue Appendix Examples of revenue recognition under the principles in Section 23 145 iv IFRS Foundation 24 Government Grants 161 25 Borrowing Costs 163 26 Share-based Payment 165 27 Impairment of Assets 171 28 Employee Benefits 181 29 Income Tax 193 30 Foreign Currency Translation 205 31 Hyperinflation 211 32 Events after the End of the Reporting Period 215 33 Related Party Disclosures 219 34 Specialised Activities 225 35 Transition to the mpers 237 Glossary of Terms 243 v Style of the document The text of the mpers preserves the format and structure of Sections 2-35 of the International Financial Reporting Standard for Small and Medium-sized Entities (IFRS for SMEs) issued by the International Accounting standards Board (IASB) in July 2009.

4 Additions or deletions to the original text of Sections 2-35 of the IFRS for SMEs are explained in the Preface to the mpers and clearly identified in the following manner: If a new paragraph is added by MASB, that paragraph would be labelled with the preceding paragraph number followed by capitalised alphabets and would be shaded and underlined. If a paragraph is deleted by MASB, that paragraph would be clearly indicated as [Deleted by MASB] . The text of the deleted paragraph will be re-produced at the end of that Section for readers information and does not form part of the Standard . Additions or deletions made within a paragraph would be shaded and underlined or shaded and struck through respectively. Those additions and deletions which are underlined or struck through without shading are amendments made by the IASB.

5 Vi IFRS Foundation The Malaysian Private Entities Reporting Standard ( mpers ) is set out in Sections 1-35 and the Glossary. Terms defined in the Glossary are in bold type the first time they appear in each section. The mpers is accompanied by a preface. Preface IFRS Foundation 1 Preface to the mpers The MASB P1 The Malaysian Accounting standards Board (MASB) and the Financial Reporting Foundation (FRF) were established under the Financial Reporting Act 1997 (the FRA). P2 By virtue of section 7 of the FRA, it is the function of the MASB to issue accounting standards for financial statements that are required to be prepared or lodged under any law administered by the Securities Commission, the Bank Negara Malaysia or the Registrar of Companies.

6 P3 The objectives of the MASB are: (a) to develop, in the public interest, high quality, understandable and enforceable accounting standards that require high quality, transparent and comparable information in financial statements and other financial Reporting to help participants in the Malaysian capital market and other users make economic decisions; (b) to promote the use and rigorous application of those standards ; (c) in fulfilling the objectives associated with (a) and (b), to take account of, as appropriate, the special needs of Private Entities (defined and explained in Section 1 Private Entities ); and (d) to pursue a policy of convergence of Malaysian Financial Reporting standards (MFRSs) with International Financial Reporting standards (IFRSs) issued by the International Accounting standards Board (IASB).

7 P4 The governance of the MASB rests with the FRF. The FRF s responsibilities include overseeing and reviewing the MASB s performance, as well as all the financing arrangements for the operations of the MASB. MFRSs P5 The MASB achieves its objectives primarily by developing and publishing MFRSs and promoting the use of those standards in general purpose financial statements and other financial Reporting . Other financial Reporting comprises information provided outside financial statements that assists in the interpretation of a complete set of financial statements or improves users ability to make efficient economic decisions. The term financial Reporting encompasses general purpose financial statements plus other financial Reporting . P6 MFRSs set out recognition, measurement, presentation and disclosure requirements dealing with transactions and other events and conditions that are important in general purpose financial statements.

8 They may also set out such requirements for transactions, events and conditions that arise mainly Preface 2 IFRS Foundation in specific industries. MFRSs are based on the Conceptual Framework for Financial Reporting , which addresses the concepts underlying the information presented in general purpose financial statements. The objective of the Conceptual Framework is to facilitate the consistent and logical formulation of MFRSs. It also provides a basis for the use of judgement in resolving accounting issues. General purpose financial statements P7 MFRSs are designed to apply to the general purpose financial statements and other financial Reporting of Entities under the purview of section 26D of the FRA that do not meet the criteria of Private Entities .

9 General purpose financial statements are directed towards the common information needs of a wide range of users, for example, shareholders, creditors, employees and the public at large. The objective of financial statements is to provide information about the financial position, performance and cash flows of an entity that is useful to those users in making economic decisions. P8 General purpose financial statements are those directed to general financial information needs of a wide range of users who are not in a position to demand reports tailored to meet their particular information needs. General purpose financial statements include those that are presented separately or within another public document such as an annual report or a prospectus.

10 The mpers P9 The mpers is based on the IASB s International Financial Reporting Standard for Small and Medium-sized Entities (IFRS for SMEs) issued in July 2009 except for the amendments made in the following sections: (a) Section 1 Private Entities Section 1 has been modified to prescribe the applicability of the mpers in the Malaysian context. In this regard, all references to SMEs and public accountability in Sections 1-35 have been replaced by the term Private Entities and deleted respectively. (b) Section 9 Consolidated and Separate Financial Statements Section 9 requires the ultimate Malaysian parent to prepare consolidated financial statements regardless of whether its ultimate parent that is not incorporated in Malaysia prepared consolidated financial statements.