The Malaysian Accounting Standards Board (MASB) has revised the Private Entity definition with the coming into operation of the Companies Act 2016 and Interest Schemes Act 2016, both on 31 January 2017.
In a statement, MASB Chairman Encik Mohamed Raslan said, “The Private Entity definition has been revised in view of the changes to interest schemes introduced by the Companies Commission of Malaysia. The revised definition retains the Board’s original intent that all management companies of interest schemes shall be prohibited from applying the MPERS (Malaysian Private Entities Reporting Standard).”
“The revision applies to financial statements with annual periods ending on or after 31 January 2017, which is coterminous with the operation date of the Companies Act 2016 and Interest Schemes Act 2016,” he added.
Elaborating on the Board’s position, Ms Tan Bee Leng, Executive Director of MASB, explained, “Under the Companies Act 1965, only public companies were permitted to be registered as a management company of an interest scheme. However, under the Interest Schemes Act 2016, private companies are permitted to be registered as the management company of a small interest scheme.”
A Private Entity has the option to apply either the MPERS (Malaysian Private Entity Reporting Standard) which is based on the IFRS for SMEs, or the MFRS (Malaysian Financial Reporting Standards) which is word-for-word the IFRS (International Financial Reporting Standards).
The International Accounting Standards Board has intended the IFRS for SMEs for use by small and medium-sized entities (SMEs) that do not have public accountability; while the IFRS is designed for other types of profit-oriented entities.