ACCOUNTING

Malaysia Issues New Insurance Standard and Interpretation on Income Taxes

The Malaysian Accounting Standards Board (MASB) has issued pronouncements for the Malaysian Financial Reporting Standards (MFRSs) and Financial Reporting Standard (FRS).

Under MFRSs the pronouncements cover MFRS 17 Insurance Contracts and  IC Interpretation 23 Uncertainty over Income Tax Treatments.

The pronouncements for Financial Reporting Standard (FRS) cover IC Interpretation 23 Uncertainty over Income Tax Treatments.

These pronouncements are word-for-word IFRS 17 Insurance Contracts and IFRIC Interpretation 23 Uncertainty over Income Tax Treatments issued by the International Accounting Standards Board.

MFRS 17 replaces the existing Standard on Insurance Contracts, MFRS 4. MFRS 17 is effective for annual periods beginning on or after 1 January 2021.

Earlier application is permitted provided the entities have applied MFRS 9 Financial Instruments and MFRS 15 Revenue from Contracts with Customers on or before the date of initial application of MFRS 17.

The IC Interpretations are effective for annual periods beginning on or after 1 January 2019. Earlier application is permitted.

“MFRS 17 will help investors and others better understand insurers’ risk exposure, profitability and financial position,” says MASB Chairman, Encik Mohamed Raslan.

MASB Executive Director, Tan Bee Leng said, “MFRS 17 includes several transition reliefs to assist entities in applying MFRS 17 for the first time, one of which is that if it is impractical for entities to apply MFRS 17 retrospectively, entities have the option of using either the modified retrospective approach or the fair value approach.”

The “Notice of Issuance” can be downloaded here

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