Friday, September 11, 2015

MFRS 15 is deferred again

This standard on contract (construction revenue) has been the hot topic since 2010. The bigger firms wanted it, so that it would be easier for them in auditing, as the consequences will focus on revenue recognised based on completed properties.

Nevertheless, some medium firms has been strongly against it, as it would affect the small players in property industry and including the software developers.

The larger construction companies like Sime Darby, SP Setia, Ecoworld, Sunway, BRDB has project every year, which would not affect their profit or assets. But for smaller players, their revenue would be very volatile. Which affect their balance sheet, and should they want to go for listing or seeking financial assistance.

Extracted from CFO Innovation Asia Staff | Tuesday, September 08, 2015

The Malaysian Accounting Standards Board confirms that the effective date of MFRS 15 Revenue from Contracts with Customers will be deferred to annual periods beginning on or after 1 January 2018, following the recent announcement by the International Accounting Standards Board of a one-year deferral of IFRS 15 Revenue from Contracts with Customers. However, early application of MFRS 15 is still permitted.

As a result, the effective date for Transitioning Entities (TEs) to apply the Malaysian Financial Reporting Standards (MFRSs) will also be deferred to annual periods beginning on or after 1 January 2018.

The TEs are entities within the scope of MFRS 141 Agriculture and/or IC Interpretation 15 Agreements for the Construction of Real Estate, including their parents, significant investors and joint ventures.

Generally, the TEs are entities in the real estate and agriculture industries that have been given the option to continue applying the Financial Reporting Standards Framework, the predecessor of the MFRSs Framework.

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