KUALA LUMPUR: The Malaysian Accounting Standards Board (MASB) today said it has issued a new presentation and disclosure standard, the MFRS 18, to improve financial performance reporting by companies.
In a statement, MASB said the MFRS 18 requires defined subtotals in the statement of profit or loss; disclosures about management-defined performance measures; and adds new principles for aggregation and disaggregation of information.
The MASB expects these improvements will enable investors to make more informed decisions leading to better allocations of capital that will contribute to long-term financial stability.
MFRS 18 will become effective for annual reporting periods beginning on or after Jan 1, 2027, with earlier application permitted.
MFRS 18 is word-for-word IFRS 18 Presentation and Disclosure in Financial Statements issued by the International Accounting Standards Board (IASB).
MFRS 18 replaces MFRS 101 Presentation of Financial Statements.
It retains many requirements from MFRS 101 without modification with some of the requirements now moved to MFRS 108 Basis of Preparation of Financial Statements, including the requirement that financial statements that have been prepared in accordance with MFRS Accounting Standards shall also make an explicit and unreserved statement of compliance with IFRS Accounting Standards.
Previously, the lack of detailed requirements in MFRS 101 resulted in diverse practices among entities, with each defining their own subtotals and performance measures.
This variation made it challenging for investors to analyse and compare companies' financial performance effectively.