The Malaysian Accounting Standards Board (MASB) has issued Clarifications to MFRS 15 Revenue from Contracts with Customers. The amendments are word-for-word Clarifications to IFRS 15 as issued by the International Accounting Standards Board (IASB). They are effective for annual periods beginning on or after 1 January 2018 and early application is permitted.
The amendments clarifies how certain principles should be applied in: identifying whether performance obligations are distinct; determining whether an entity is a principal or an agent; and assessing whether revenue from a license of intellectual property is recognized over time or at a point in time.
“The amendments arises as a result of discussions of the Joint Transition Resource Group set up by the IASB and the US national standard-setter, the Financial Accounting Standards Board, to assist companies with implementing the new Revenue Standard,” says MASB Chairman Encik Mohamed Raslan. “The amendments do not change the underlying principles of MFRS 15.”
The amendments also introduces two additional new practical expedients to simplify transition in response to stakeholders’ requests for further transition relief to reduce the effort and cost of initial application of MFRS 15.