A brief history of accounting standards developed by IASC, IASB, MASB, change of names, numbers and locally developed standard, in Malaysia.
IAS - 1973 to 2000
International Accounting Standards (IAS) was developed and issued by International Accounting Standards Committee (IASC) from the year 1973 until the year 2000.
In the year 2001, International Accounting Standards Board (IASB) was formed to replace the IASC.
Accounting standards issued by IASB is named International Financial Reporting Standards (IFRS).
Accounting standards issued by the IASC is named IAS. There are total of 41 IASs issued. Some of these IASs has been withdrawn and superseded by IFRS. IAS that is still applicable is constantly updated at https://www.ifrs.org/issued-standards/list-of-standards/
IFRS - 2001 to present
Accounting standards issued by the IASB is named International Financial Reporting Standards (IFRS). There are 17 IFRS issued as of todate.
IFRIC is a Committee within IASB, which provide further guidance on how to apply the standards issued by IASB.
IAS have the same status as the IFRS.
IASB also developed and issued the IFRS for SMEs in July 2009, which is used by small and medium-sized Companies without public accountability.
In Malaysia, full convergence of IFRS was on 1 January 2012, where IFRS is named MFRS, it is a nomenclature exercise.
PERS in Malaysia - 2007 to 2016
MASB issued Private Entities Reporting Standards (PERS) in Malaysia, for private entities as defined in the Companies Act 1965. PERS focuses on proprietary needs rather than investor needs, the framework generally prescribes the use of cost model as measurement basis for private entities. PERS was effective from 1 July 2007 until replaced by MPERS on 1 January 2016.
FRS in Malaysia - 2005 to 2018
On 1 January 2005, MASB has renamed all its existing standards as Financial Reporting Standards (FRS). The numbering of the FRSs corresponds to the IFRSs issued by the IASB. For example, FRS 1 in Malaysia is equivalent to IFRS 1. FRS with a 100 prefix corresponds to its equivalent IASs. Thus FRS 101 is equivalent to IAS 1. FRS with a 200 prefix denotes locally developed standard with no equivalent International Standard. Currently, there is only 1 locally developed standard, FRS 201 for Property Development Activities.
MASB has withdrawn all the FRSs effective 1 January 2018 for application for financial statements in Malaysia.
MFRS in Malaysia - 2012 to present
MASB named IFRS as Malaysian Financial Reporting Standards (MFRS) in Malaysia. Full convergence of IFRS/MFRS in Malaysia was on 1 January 2012. The MFRS framework is word-for-word in agreement with IFRS framework issued by the IASB.
The numbering of the MFRS corresponds with the equivalent IFRS Standards issued by the IASB. MFRS prefix with "1xx" corresponds with the equivalent IAS.
Entities other than private entities shall apply the MFRS for annual periods beginning on or after 1 January 2012.
MPERS in Malaysia - 2016 to present
MASB named IFRS for SMEs as Malaysian Private Entities Reporting Standards (MPERS). MPERS is effective for private entities for financial period beginning on or after 1 January 2016.
Private Entities is defined in Section 2 of the Malaysian Companies Act 2016.
The accounting requirements of MPERS are word-for-word in conformity with IFRS for SMEs issued by the IASB except for the Property Development Activities.
A private entity is a private company as defined in Section 2 of the Malaysian Companies Act 2016. The general criteria are as follows;
i. the entity is not itself required to prepare or lodge any financial statements under any law administered by the Securities Commission Malaysia or Bank Negara Malaysia; and
ii. the entity is not a subsidiary or associate of, or jointly controlled by, an entity which is required to prepare or lodge any financial statements under any law administered by the Securities Commission Malaysia or Bank Negara Malaysia.
Notwithstanding the above, a private company that is itself, or is a subsidiary or associate of, or jointly controlled by, an entity that is a management company as defined in section 2 of the Interest Schemes Act 2016 is not a private entity.
An entity may only be treated as a private entity in relation to such annual periods or annual periods throughout which it is a private entity.