MASB Issues 4 Exposure Drafts

The Malaysian Accounting Standards Board (MASB) has announced the issuance of four exposure drafts. The exposure drafts are ED 67, IC Interpretation 4, IC Interpretation 18, and ED i-4.

 

According to the MASB, ED 67 contains amendments to the disclosure standard for financial instruments. The IASB issued the Standard as part of its response to the global financial crisis. The improvements also reflect discussions by the IASB’s Expert Advisory Panel on measuring and disclosing fair values of financial instruments when markets are no longer active. Enhanced disclosure requirements result in disclosures that better enable users to evaluate an entity’s exposure to liquidity risk arising from financial instruments and how the entity manages this risk.

 

The draft IC Interpretation 4 draft gives guidance on determining whether arrangements that do not take the legal form of a lease should, nonetheless, be accounted for in accordance with FRS 117 Leases. The draft specifies that an arrangement contains a lease if it depends on the use of a specific asset and conveys a right to control the use of that asset.

 

Meanwhile, the draft IC Interpretation 18 draft proposes to clarify the requirements of FRSs for agreements in which an entity receives from a customer a fixed asset that the entity must then use either to connect the customer to a network or to provide the customer with ongoing access to a supply of goods or services (such as a supply of electricity, gas or water) or to do both. In some cases, the entity may receive cash from a customer for the acquisition or construction of such fixed assets.

 

Lastly, the ED i-4 was issued in response to concerns about accounting for Shariah compliant sale contracts.  In particular, it aims to clarify when an item should be recognised or derecognised in the statement of financial position, the treatment of a financing element that may arise, and how to account for a Shariah compliant sale contract that is part of a series of transactions. This ED was developed in close alignment with the principles laid out in Statement of Principles i-1 Financial Reporting from an Islamic Perspective.

 

Interested parties, including the business communities, are encouraged to study the Exposure Drafts and Draft Interpretations and provide feedback to MASB.

 

The exposure period expires on 13 November 2009. 

 
 

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