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Key differences between MPERS, IFRS for SMEs and MFRS

An overview of the key differences between Malaysian Private Entities Reporting Standard (MPERS), International Financial Reporting Standards (IFRS) for SMEs and Malaysian Financial Reporting Standards (MFRS).

An overview on MPERS

MPERS is a financial reporting framework issued by Malaysian Accounting Standards Board (MASB) for private entities in Malaysia. A private entity is a private company, incorporated under the Companies Act 2016. MPERS is only applicable to private entities that:

  • is not itself required to lodge any financial statements under any law administered by the Securities Commission or Bank Negara Malaysia, and;

  • is not a subsidiary, associate or jointly controlled by an entity which is required to lodge any financial statements under any law administered by the Securities Commission or Bank Negara Malaysia.

Key differences between MPERS and IFRS FOR SMEs




​Applicable to Private Entities

Applicable to SMEs without public accountability

​Exemption from consolidation

Ultimate Malaysian parent is required to prepare consolidated financial statements, regardless of whether its ultimate parent (not incorporated in Malaysia) prepares consolidated financial statements.

A parent entity is exempted from presenting consolidated financial statements if it is a subsidiary and its ultimate parent prepares consolidated financial statements that comply with full IFRS or IFRS for SMEs.

​Revenue from property development activities

Guidance is based on the Malaysian-specific requirements in MASB 32 “Property Development Activities”.

Guidance is based on IFRIC 15 “Agreements for the Construction of Real Estates”.

An overview on MFRS

MFRS is a financial reporting framework issued by Malaysian Accounting Standards Board (MASB) for non-private entities in Malaysia. The MFRS is fully converged with the IFRS issued by International Accounting Standards Board (IASB).

Differences between MPERS and MFRS



Control of subsidiaries

In MPERS, control over an investee means the investor has “the power to govern the financial and operating policies of the investee so as to obtain benefits from its activities”.

In MFRS, control must be demonstrated through 3 elements: power, exposure to variable returns and an investor’s ability to use its power to affect its variable returns.


In MPERS, after initial recognition, goodwill is subsequently measured at cost less accumulated amortisation and any accumulated impairment losses. Goodwill is amortised over its useful life, or a maximum of 10 years if its useful life cannot be reliably estimated.

In MFRS, goodwill has an indefinite life, hence, it is not amortised. However it is subject to annual impairment testing.

Investments in associates, joint ventures

MPERS permits 3 different measurement models – equity method, cost model and fair value model.

MFRS requires these investments to be accounted for using the equity method.

Financial instruments

MPERS has only 2 measurement models for financial assets and financial liabilities.

MFRS has 4 measurement models for financial assets and financial liabilities.

Investment property

In MPERS, entity must use the fair value model unless fair value could not be measured reliably without undue cost or effort.

MFRS allows accounting policy choice of either fair value model or a cost model.

Borrowing costs

MPERS requires all borrowing costs to be recognised as an expense in profit or loss.

MFRS requires borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset to be capitalised as part of the cost of asset.

Intangible assets other than goodwill

​MPERS requires research and development costs to be recognised as expenses. MPERS considers all intangible assets to have a finite useful life and therefore, must be amortised over the useful life. It does not allowed the use of revaluation model for measuring intangible assets after initial recognition.

​MFRS requires research and development costs to be capitalised as an asset if criterias are met. In MFRS, an intangible asset with a finite useful life is amortised and is subject to impairment testing whereas, an intangible asset with an indefinite useful life is not amortised, but is tested annually for impairment.

Recycling of foreign currency reserve

On disposal of a foreign operation, MPERS does not allow the cumulative exchange differences that relate to the foreign operation to be reclassified from equity to profit or loss.

In MFRS, on disposal of a foreign operation, the cumulative amount of the exchange differences recognised in other comprehensive income and accumulated in the separate component of equity relating to that foreign operation shall be recognised in profit or loss.


All information contained herein is summarised based on the information from MPERS, MFRS and IFRS for SMEs standards published by MASB and IASB respectively in their website and it is intended to provide a general overview of the subject matter and should not be regarded as a basis for ascertaining the accounting treatment for specific circumstances or as a a basis for formulating business decisions. No responsibility for loss to any person acting or refraining from acting as a result of any material in this publication can be accepted by GSK & Associates. Readers should not act on the basis of this publication without seeking professional advice.

Should you require further clarification, please do not hesitate to contact our Partner Mr Gunalan Appalasamy at 03-2705 6630 or email to or Managers whom you are accustomed to dealing with.

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