Wednesday, 5 December 2018

MPERS check in

MPERS (based on IFRS for SMES) was designed to apply to entities that do not have public accountability. Malaysian Accounting Standards Board (MASB) adopted the MPERS framework of in February 2014 and it came into effect for private entities for financial period beginning on or after 1 January 2016.

The implementation period for MPERS could be considered as a juggling act. There were plenty of other things going around during the period of 2014 onwards – MPERS, GST, the Companies Act 2016, or the ever evolving direct tax environment – putting a strain on SMEs’ resources. This had led to SMEs prioritising – GST compliance, MPERS transition, finance cost management or just staying afloat in a challenging economic environment.

The MPERS ball may look smaller than, say, the GST ball, which have led to some SMEs choosing to outsource their first year transition to MPERS to accounting firms, for quicker compliance, so that they can focus on bigger and more pressing matters.

While this acts as a quick fix, it is not a feasible long-term solution. It is not just about entering cash in-outflow records, banking records and payment vouchers but also understanding all the accounting treatments for the preparation of financial statements. Through that understanding, accountants will be better placed to suggest changes to processes where necessary.

In October 2015, the MASB issued 2015 Amendments to the MPERS. The 2015 Amendments to the MPERS is effective for annual periods beginning on or after 1 January 2017, with early application permitted. Some of the key changes include clarifying “undue cost or effort” exemption, revaluation model permitted for measurement of property, plant and equipment, and aligning recognition and measurements requirements on deferred tax with the 2015 Amendments to the IFRS for SMEs.

The additional clarification on “undue cost or effort exemption” might entail further reviews as the exemption is specified for a number of sections of MPERS while deferred tax requirements may impact borrowing costs.

Wolters Kluwer’s An In-depth Insight on Malaysian Private Entities Reporting Standard (MPERS) workshop will discuss MPERS and the 2015 Amendments to the MPERS, with the aim of enabling you to evaluate your company’s circumstances, identify any gaps and review potential areas of concern.

No comments:

Post a Comment