International Accounting Standards

INTRODUCTION

Previously, Malaysian accounting standards have always closely followed the prior International Accounting Standards (IAS) and the existing International Financial Reporting Standard (IFRS) because of the colonisation effect on Malaysia, where Malaysia was a British colony up to the year 1957 and many of the accounting standards applied in the United Kingdom has always made its way to be adopted by the Malaysian standard setters authorities and regulators. However, in the year 2008, the chairman of Malaysian Accounting Standard Board (MASB) had made an announced that Malaysia will be converged with International Accounting Standard Board (IASB)’s IFRS effective on or 1 January 2012 onwards. On top of that, on 19 November 2011, MASB issued the third accounting framework to be applied in Malaysia and this new accounting framework that is IFRS-compliant is dubbed as Malaysian Financial Reporting Standards framework (MFRS). The issuance of MRFS is vital to show and prove the Malaysian commitment also as a solid guideline for all entities that are administered by Securities Commission Malaysia. Hence, many initiatives were lined up by MASB and the Malaysian Institute of Accountants (MIA) in order to educate, train and inform all the relevant stakeholders in tandem with fast approaching deadline to converge, which is for the earliest year-end financial reporting date, 31 December 2012.

CONCLUSION

Malaysia is honoured to have been moving in a major improvement in the process of converging to IFRS. Apart from the issue of conflict in relations to measurement, disclosures and recognitions based on MFRS framework, Malaysia is very much steady and on a right track to converge to IFRS as there are no major issues of non-compliance with MFRS, it is also to be recognised that Malaysia has acquired and built strong accounting policies over time, coupled with adequate funding to and by MASB. In theory, Malaysian education system is very much in line with the current developments in the accounting and business fraternity. Hence, there is no lack of local capacity as far as education and training are concerned and the accountants in training are well prepared to enter the job market. In a nutshell, we could say that the worried of the public that the convergence will reduce the role of MASB to rubber stamp is unnecessary due to the fact that MASB actually contributed and is able to influence the standard setting process.

CONCLUSION

Malaysia is honoured to have been moving in a major improvement in the process of converging to IFRS. Apart from the issue of conflict in relations to measurement, disclosures and recognitions based on MFRS framework, Malaysia is very much steady and on a right track to converge to IFRS as there are no major issues of non-compliance with MFRS, it is also to be recognised that Malaysia has acquired and built strong accounting policies over time, coupled with adequate funding to and by MASB. In theory, Malaysian education system is very much in line with the current developments in the accounting and business fraternity. Hence, there is no lack of local capacity as far as education and training are concerned and the accountants in training are well prepared to enter the job market. In a nutshell, what is more important than IFRS convergence is the full adoption of IFRS through the complete adoption of MFRS framework, and the question that arises is that how successful will entities be in the correct application of MFRS framework and we strongly believe that a post MFRS implementation reviews are vital for the successful full adoption of IFRS in Malaysia.