ive to reduce the burden of private entities in the financial reporting compliance.
Other than that, in August 2008, Malaysia had brought the Financial Reporting Standards (FRSs) into full conjunction with IFRS. As stated by (Malaysian Institute of Accountants, n.a), in 1 August 2008 the Financial Reporting Foundation (FRF) and MASB announced a plan to bring full convergence with the IFRS which is the full compliance with IFRS for the financial reporting system in Malaysia by 1 January 2012.
Therefore, the plan that made by MASB and FRF create an exposure draft issued by MASB. MASB Exposure Draft 75 IFRS-compliant Financial Reporting Standards that was issued by MASB on 28 June 2011 result in the Malaysian financial reporting framework being standard with IFRS-compliant financial reporting framework.
While in 2010, ED 72 FRS for SMEs has been issued by MASB. According to (MIA, n.a), MASB issued MASB ED 72 FRS for SMEs in 26 March 2010 for the SMEs in Malaysia to use by users that required to publish general financial statement purpose for the external users and do not have public accountability. Other than that, the purpose of IFRS for SMEs in Malaysia is to reduce the detailed requirements under the full IFRS for small entities since full IFRS is too complex for small entities to apply. In Malaysia, the IFRS for SMEs was issued ED 72 in March 2010 (MASB, n. a). Thus, ED 72 is identical with the IFRS for SMEs that was issued by IASB. IASB issued the IFRS for SMES in July 2009 (MASB, 2010).
Generally, Malaysia is in the process in adopting IFRS for SMEs that is expected to be issued in 2013. The revisions of the IFRS for SMEs in Malaysia will be in 2015 on the any amendments to the IFRS for SMEs. According to IFRS (2013), during the first half of year 2013, Malaysia is expected to be issued FRS for SMEs and it will be effective for annual periods on or after 1 January 2016 of the new framework for the private entities. This means that, MASB is considering replacing the PERS framework in Malaysia to IFRS for SMEs in 2016.
The relevance and appropriateness of IFRS for SME's in Malaysia.
As we know that, full IFRS is too complex to apply for small entities. Therefore, to make an appropriate for smaller entities, Malaysia needs IFRS for SMEs to provide self-contained in the set of accounting principles which is based on full IFRS. Malaysia makes a modification in IFRS for SMEs from the full IFRS founded from the needs of users in SMEs financial statements which is based on the topics that are not relevant to the SMEs, hence they will eliminate the topics and remove the choices for accounting treatment to make it simple. Other than that, they are also simplifying the methods for the measurement and recognition for the IFRS for SMEs.
However, Malaysia has two frameworks which are PERs and MFRs. The problems occur when comparing these two frameworks according to current documentation and its interpretations. Since IFRS for SMEs is new to the reporting entities, the practices and interpretation of it must be develop from time to time. For example, the entities must considered for cost intensive when they want to change PERs to adopt IFRS for SMEs which they have to pay more to adopt a new standard in the entities.
As stated by Yusoff (2009), the Companies Commission will come out in advance with some of the recommendations that have be
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