Malaysian Financial Reporting Standard 108
Accounting Policies, Changes in Accounting Estimates and Errors This version includes amendments resulting from MFRSs with effective dates no later than 1 January 2012.
Amendments with an effective date later than 1 January 2012 MFRS 108 has been amended by: MFRS 9 Financial Instruments* (IFRS 9 Financial Instruments issued by IASB in November 2009) MFRS 9 Financial Instruments* (IFRS 9 Financial Instruments issued by IASB in October 2010) MFRS 13 Fair Value Measurement* Those amendments have an effective date after 1 January 2012 and are therefore not included in this edition.
effective date 1 January 2013
CONTENTS paragraphs Preface INTRODUCTION IN1–IN18
MALAYSIAN FINANCIAL REPORTING STANDARD 108 ACCOUNTING POLICIES, CHANGES IN ACCOUNTING ESTIMATES AND ERRORS OBJECTIVE SCOPE DEFINITIONS ACCOUNTING POLICIES Selection and application of accounting policies Consistency of accounting policies Changes in accounting policies Applying changes in accounting policies Retrospective application Limitations on retrospective application Disclosure CHANGES IN ACCOUNTING ESTIMATES Disclosure ERRORS Limitations on retrospective restatement Disclosure of prior period errors IMPRACTICABILITY IN RESPECT OF RETROSPECTIVE APPLICATION AND RETROSPECTIVE RESTATEMENT EFFECTIVE DATE WITHDRAWAL OF OTHER PRONOUNCEMENTS 1–2 3–4 5–6 7–31 7–12 13 14–31 19–27 22 23–27 28–31 32–40 39–40 41–49 43–48 49 50–53 54 55–56
Malaysian Financial Reporting Standard 108 Accounting Policies, Changes in Accounting Estimates and Errors (MFRS 108) is set out in paragraphs 1–56. All the paragraphs have equal authority. MFRS 108 should be read in the context of its objective and the Basis for Conclusions, the Foreword to Financial Reporting Standards and the Conceptual Framework for Financial Reporting.
The Malaysian Accounting Standards Board (MASB) is implementing its policy of convergence through adopting International Financial Reporting Standards (IFRSs) as issued by the International Accounting Standards Board (IASB) for application for annual periods beginning on or after 1 January 2012. The IASB defines IFRSs as comprising: (a) International Financial Reporting Standards;
(b) International Accounting Standards; (c) IFRIC Interpretations; and
(d) SIC Interpretations. Malaysian Financial Reporting Standards (MFRSs) equivalent to IFRSs that apply to any reporting period beginning on or after 1 January 2012 are: (a) Malaysian Financial Reporting Standards; and
(b) IC Interpretations. First-time application of MFRSs equivalent to IFRSs Application of this Standard will begin in the first-time adopter’s * first annual reporting period beginning on or after 1 January 2012 in the context of adopting MFRSs equivalent to IFRSs. In this case, the requirements of MFRS 1 First-time Adoption of Malaysian Financial Reporting Standards must be observed. Application of MFRS 1 is necessary as otherwise such financial statements will not be able to assert compliance with IFRS. MFRS 1, the Malaysian equivalent of IFRS 1 First-time Adoption of International Financial Reporting Standards, requires prior period information, presented as comparative information, to be restated as if the requirements of MFRSs effective for annual period beginning on or after 1 January 2012 have always been applied, except when it (1) prohibits retrospective application in some aspects or (2) allows the first-time adopter to use one or more of the exemptions or exceptions contained therein. This means that, in preparing its first MFRS financial statements* for a financial period beginning on or after 1 January 2012, the first-time adopter shall refer to the provisions contained in MFRS 1 on matters relating to transition and effective dates instead of the transitional provision and effective date...