In Malaysia, all companies incorporated under the Companies Act 2016 are required to prepare financial statements in accordance with approved accounting standards, and submit their audited financial statements to the Companies Commission of Malaysia (SSM) annually. These accounting standards are issued and regulated by the Malaysian Accounting Standards Board (MASB) under the Financial Reporting Act 1997.
The Two Main Accounting Frameworks in Malaysia:
1. Malaysian Financial Reporting Standards (MFRS)
The MFRS Framework is fully equivalent to International Financial Reporting Standards (IFRS), making it suitable for entities with complex reporting needs or public interest.
✅ Who uses MFRS?
- Public listed companies (PLCs)
- Entities that are in the process of being listed
- Entities with public accountability, such as:
- Financial institutions (banks, insurers)
- Entities that hold funds in a fiduciary capacity for the public
✅ Key Characteristics:
- Full compliance with IFRS
- Detailed and comprehensive disclosures
- Higher reporting complexity and compliance requirements
2. Malaysian Private Entities Reporting Standard (MPERS)
MPERS is based on the IFRS for SMEs and is designed specifically for private entities that do not have public accountability.
✅ Who uses MPERS?
- Private limited companies (Sdn. Bhd.)
- SMEs not intending to go public
- Companies that meet the criteria of “private entity” as defined by MASB
✅ Key Characteristics:
- Simplified recognition, measurement, and disclosure requirements
- Easier to apply and less costly to maintain
- Tailored for businesses with simpler operations
Summary Comparison
Feature | MFRS | MPERS |
Compliance Base | IFRS | IFRS for SMEs |
Intended Users | Public entities, listed companies | Private entities (Sdn. Bhd.) |
Complexity Level | High | Moderate / Low |
Disclosure Requirements | Extensive | Simplified |
Use in Malaysia | Mandatory for PLCs and financial institutions | Optional for qualified private entities |