The Malaysian Accounting Standards Board (MASB) has published an exposure draft (ED) on the guidance on transition to IFRSs, in particular the ED 70 Technical Release 3 Guidance on Transition to IFRSs.
The proposed Technical Release (TR) is in response to suggestion made by the Convergence Task Force (CTF). The CTF was set up after consultations with constituents following the announcement in August 2008 by MASB about Malaysia’s convergence with IFRS by 2012. Stakeholders believe that relevant parties in the financial reporting chain should initiate a comprehensive IFRS roll-out strategy to strengthen their state of readiness on transition to IFRS in 2012.
The CTF focuses on the general progression towards convergence. Its objective is to coordinate the convergence efforts carried out by the various key players in the financial reporting value chain, which includes reviewing company’s progress and transition to IFRS by the relevant authorities as well as to communicate the convergence policy to all parties for them to take the necessary actions.
ED 70 is issued to assist entities in the transition period towards the application of International Financial Reporting Standards (IFRSs). In 2008, MASB has announced its plan to converge with IFRSs by 1 January 2012. This proposed TR contains several recommendations whereby entities that are required to apply IFRSs in 2012, are encouraged to provide users with appropriate and useful information during the transition phase from MASB Financial Reporting Standards (FRS) to IFRS. It prescribes the disclosure guidelines for the preparation of financial statements for the transition to IFRS, namely for the 2010 and 2011 financial statements.
Preparers are encouraged to provide narrative disclosures relating to the changeover to IFRS in their annual reports. This would help investors and other users of financial statements better understand the transition process.
Interested parties, including the business communities, are encouraged to study the Exposure Draft and provide feedback to MASB.
The exposure period expires on 15 January 2010.