Tuesday 20 October 2009

Is your firm ready for FRS 139?

WE are now 72 days away from the day when the Financial Reporting Standards No 139 (FRS 139), or IAS 39 as it is internationally known, would be effective in Malaysia.

Given that this standard has been around for close to 10 years, its adoption will bring Malaysia a step closer to full convergence with the International Financial Reporting Standards (IFRS), presently targeted by 2012.

Dubbed “the mother of all standards” by some commentators, IAS 39 deals with the recognition and measurement of financial instruments, the category of assets and liabilities which appear on the balance sheets of most companies irrespective of their sizes.

The fair value concept which requires these financial instruments to be marked to their market prices is the pillar of IAS 39 and has been the bone of contention by its opponents.

As the fair value concept replaces the historical cost convention, the adoption of IAS 39 is considered “the test” to ascertain whether or not a jurisdiction has adopted IFRS. This is critical as other IFRS are anchored around IAS 39.

The accounting standard for agriculture, IAS 41, is an example. Although the concept introduces more volatility of financial results, the proponents of fair value argue that it provides a better picture of the financial position of reporting entities and reflects the market valuation of assets and liabilities.

The recent global financial crisis has brought IAS 39 on the global spotlight, even being accused as the trigger for the financial market meltdown in the US and Europe.

Even the French president is familiar with IAS 39! Simplifying IAS 39 is now placed on one of the agendas of the Group of 20 nations (G20). In fact, in ensuring a level playing field between European and US companies, the G20 is pushing for the convergence of the financial instruments standards as applied in the US and the rest of the world.

So, instead of having IAS 39 shelved, its position is now enhanced through the support of G20, although work to improve the standard is required.

As it is, FRS 139 has been approved although the effective date in Malaysia is Jan 1, 2010. Nevertheless, companies are allowed to adopt the standard early and some had done so.

For example, AirAsia and Malaysia Airlines have adopted the standard to ensure their financial statements are on par with other global airlines. Such comparison is important particularly for companies who wish to attract global investors and those with stakeholders around the globe.

The effective date of FRS 139 is determined after due consideration of its impact and the state of readiness of Malaysian companies which will be required to apply the standards.

Financial services companies such as banks and insurance providers are the ones that will be impacted most as their assets and liabilities are largely in the form of financial instruments.

Beyond that, the implementation of FRS 139 requires systems and processes to be put in place to ensure the necessary information is available, particularly those relating to market values. This requires a lot of planning and substantial monetary investment as well.

Other companies without derivatives on their balance sheets cannot assume that they need not worry about FRS 139 either.

Those with foreign currency receivables and inter-company loans, for example, need to access how far the standards would affect them.

Responding to calls from G20, regulators and other stakeholders, the International Accounting Standards Board (IASB) announced the IAS 39 simplification project which is intended to be completed by the end of the year.

The first cut of this project has been exposed. Financial assets and liabilities are now measured either on amortised cost or fair value. Exposure draft on Impairment Methodology is expected to be issued in October and the one on Hedge Accounting should be available in December.

Given the above effort, some groups in Malaysia are asking whether FRS 139 will be deferred again. Why should we move on with the implementation next year when IAS 39 will be further amended?

Why not allow Malaysian companies to apply the simplified standard instead of the one adopted right now? So far, the Malaysian Accounting Standards Board (MASB) seems to be firm on the implementation deadline. Based on the discussions in public forum, the stand is supported by at least two arguments.

First, the effective date for the revised IAS 39 to be adopted globally will be around 2012, which is more than two years away. Second, some of the concepts, such as expected loss provisioning, are quite new and could be challenged further.

Bursa Malaysia recently advised companies to be prepared for the FRS 139 implementation. The exchange expects that any potential challenges arising from the implementation will be effectively addressed by the listed companies with adequate preparation and a better understanding of the issues.

With such expectations, directors of public-listed companies should by now be clear of the issues and challenges of implementing FRS 139 and their companies should already be in the implementation mode. Anything short of that should trigger the alarm bell. After all, 72 days are only slightly more than 10 weeks away!

This article was also published by the Edge Malaysia here:


I was a Postie said...

Thanks for the heads up brother Hasyudeen.

Anonymous said...

[url=http://masters.cnadflorida.org/moodle/z/fd448-buy-soma-online.php]watson soma overnight[/url] soma no perscription = [url=http://www.esalesianos.com/moodle/z/083b-discount-soma.php]order generic somas online[/url] mexican pharmacy soma = [url=http://moodle.fpks.org:8081/z/9633-order-soma.php]soma no prescription[/url] overnight somas = [url=http://matrix.il.pw.edu.pl/~moodle/z/bcc5-buy-soma.php]discount soma[/url] soma want to order = [url=http://max.tchesc.org:8888/moodle/z/6223-cheap-soma.php]online qualitest soma[/url] soma cheap

Anonymous said...

[url=http://sites.tisd.org/moodle/z/af886-order-soma-carisoprodol.php]buy soma cod[/url] soma overnight cod = [url=http://moodle.brauer.vic.edu.au/z/1a76-prescription-drug-called-soma.php]cheaper way to buy soma[/url] soma buy in australia = [url=http://www.wom.opole.pl/moodle/z/ec21-but-soma-online.php]dan brand soma online[/url] discount adidas soma shoes = [url=http://masters.cnadflorida.org/moodle/z/b884a-soma-online.php]soma from canada for cheap[/url] prescription drug soma information = [url=http://learning.cunisanjuan.edu/moodle/z/9d045-soma-350mg-saturday-fed-ex-shipping.php]overnight soma no perscription[/url] order soma with dhl overnight delivery

Anonymous said...

[url=http://www.e-cezar.pl/moodle/z/69a1-soma-carisoprodol-online.php]soma rx[/url] soma overnight cheap = [url=http://moodle.cerritosec.com/z/b5fa9-soma-cod-without-prescription.php]online prescriptions for soma[/url] carisoprodol cheap soma 100 = [url=http://m7.mech.pk.edu.pl/~moodle/z/8267-q-buy-soma-online.php]buy soma paypal[/url] 1 prescription soma = [url=http://adsl.eb23-iammarestombar.edu.pt/moodle/z/27640-soma-350mg-saturday-delivery.php]soma overnight delivery no prescription required[/url] soma online online a href = [url=http://www.zse.nowytarg.pl/nauczanie/moodle/z/d9df5-buy-generic-soma.php]cheap watson soma[/url] watson brand soma without prescription

Anonymous said...

[url=http://testwood.moodle.uk.net/z/785a7-prescription-soma.php]buy soma cheap overseas[/url] buy soma tablets = [url=http://fcds-moodle.fcds.org/z/03f9-soma-saturday-shipping.php]cheap soma on line[/url] ninth street pharmacy soma = [url=http://moodle.spsbr.edu.sk/z/31c3-soma-overnight.php]buy soma online sit[/url] cheap generic soma = [url=http://sites.tisd.org/moodle/z/af886-soma-cheap-without-rx.php]soma australia[/url] cod online prescription soma = [url=http://moodle.brauer.vic.edu.au/z/1a76-soma-and-viagra-prescriptions-free-viagra.php]soma online sales[/url] order watson soma

Anonymous said...

[url=http://www.wom.opole.pl/moodle/z/ec21-soma-discount-code.php]buying cheap soma free delivery[/url] discount from prescription price rx soma = [url=http://masters.cnadflorida.org/moodle/z/b884a-order-watson-soma-online.php]soma prescriptions online[/url] buy cheap generic soma = [url=http://learning.cunisanjuan.edu/moodle/z/9d045-overnight-cod-soma.php]cheap soma canada[/url] buy prescription soma without = [url=http://www.e-cezar.pl/moodle/z/69a1-buying-soma-online-without-a-prescription.php]soma cheap overnight[/url] soma 350mg saturday delivery = [url=http://moodle.cerritosec.com/z/b5fa9-cheap-watson-soma-online.php]soma online price[/url] no prescription needed soma cod

Anonymous said...

[url=http://m7.mech.pk.edu.pl/~moodle/z/8267-soma-cheap.php]buy discount generic soma online[/url] buy soma line boards umaxppc = [url=http://adsl.eb23-iammarestombar.edu.pt/moodle/z/27640-online-soma.php]buy soma compound[/url] soma online pharmacy = [url=http://www.zse.nowytarg.pl/nauczanie/moodle/z/d9df5-order-soma-s.php]somas overnight to florida[/url] soma buy online fedex = [url=http://elo.dorenweerd.nl/z/0be1-buy-soma-online-no-prescription.php]online soma sale[/url] soma watson online = [url=http://www.fjs-torredeita.com.pt/moodle/z/99d7-soma-discount-codes.php]buy soma online overnight delivery[/url] online soma imported

Anonymous said...

[url=http://moodle.lopionki.pl/z/5472-soma-without-prescription.php]soma overnight cod[/url] somas overnight to florida = [url=http://moodle.queensburyschool.org/twt/z/beba8-watson-brand-soma-without-prescription.php]buy soma haircare products[/url] online order soma = [url=http://www.wrc.net/moodle/z/fd074-generic-soma-online.php]buy somas[/url] soma mexico = [url=http://testwood.moodle.uk.net/z/785a7-buy-soma-online-mexico.php]soma prescriptions[/url] soma cheap rx = [url=http://fcds-moodle.fcds.org/z/03f9-buy-soma-120-no-prescription.php]florida internet pharmacies soma no prescription[/url] buy soma paypal

Anonymous said...

[url=http://www.zse.nowytarg.pl/nauczanie/moodle/z/d9df5-soma-overnight-cheap.php]where to cheap soma[/url] soma beverage from india = [url=http://elo.dorenweerd.nl/z/0be1-buy-soma-with-online-prescription.php]buy soma drug[/url] soma fedex = [url=http://www.fjs-torredeita.com.pt/moodle/z/99d7-soma-180-overnight.php]buy cheap soma without prescription[/url] fedex soma legal = [url=http://moodle.lopionki.pl/z/5472-soma-ship-to-florida.php]soma online overnight delivery to florida[/url] internet prescriptions for soma = [url=http://moodle.queensburyschool.org/twt/z/beba8-buy-soma-c-o-d.php]carisoprodol cheap soma[/url] watson soma overnight

Anonymous said...

[url=http://www.wrc.net/moodle/z/fd074-cheap-soma-and-or-fiorecet-online.php]buy linecom soma[/url] buy i e online soma = [url=http://testwood.moodle.uk.net/z/785a7-purchase-soma-online.php]where to order soma[/url] cheapest soma on the net = [url=http://fcds-moodle.fcds.org/z/03f9-soma-prices.php]overnight soma without prescription[/url] soma available online = [url=http://moodle.spsbr.edu.sk/z/31c3-soma-and-shipping-to-michigan.php]hpo pharmacy soma[/url] soma blockprint jaipur india = [url=http://sites.tisd.org/moodle/z/af886-buy-cheap-soma.php]buy soma online usa[/url] buy soma cheap online no prescription

Anonymous said...

[url=http://moodle.brauer.vic.edu.au/z/1a76-english-to-soma-online-dictionary.php]no prescription soma overnight[/url] soma delivered overnight = [url=http://www.wom.opole.pl/moodle/z/ec21-current-soma-discount-codes.php]cheapest soma overnight[/url] online pharmacy soma = [url=http://masters.cnadflorida.org/moodle/z/b884a-cheap-somas.php]purchase soma carisoprodol online[/url] soma by chico's discount coupon = [url=http://learning.cunisanjuan.edu/moodle/z/9d045-soma-overnight-delivery.php]buying soma online overnight without prescription[/url] buy watson soma = [url=http://www.e-cezar.pl/moodle/z/69a1-soma-wholesale-without-prescription.php]prescription for soma[/url] soma to buy

Anonymous said...

[url=http://moodle.cerritosec.com/z/b5fa9-cheapest-online-soma.php]buying soma online without a prescription[/url] order pal pay soma = [url=http://m7.mech.pk.edu.pl/~moodle/z/8267-buy-cheap-soma-online.php]soma concert from discount pharmacy[/url] cheap soma = [url=http://adsl.eb23-iammarestombar.edu.pt/moodle/z/27640-us-soma-online.php]drug soma[/url] cheapest soma or carisoprodol online = [url=http://www.zse.nowytarg.pl/nauczanie/moodle/z/d9df5-order-soma-overnight-delivery-to-texas.php]generic soma online[/url] buy soma cheap = [url=http://elo.dorenweerd.nl/z/0be1-soma-perscription-.25.php]zenegra prescription of soma[/url] soma without precription

Anonymous said...

[url=http://www.fjs-torredeita.com.pt/moodle/z/99d7-lcd-projectors-buy-soma.php]soma without a perscription[/url] soma online prescription us = [url=http://moodle.lopionki.pl/z/5472-online-pharmacy-for-valium-and-soma.php]soma online no prescription[/url] buy keyword soma = [url=http://moodle.queensburyschool.org/twt/z/beba8-soma-prescription.php]soma discount codes[/url] generic soma without prescription = [url=http://www.wrc.net/moodle/z/fd074-soma-online-pharmacy.php]online soma imported[/url] best online soma = [url=http://testwood.moodle.uk.net/z/785a7-watson-soma-online-next-day-service.php]chicos soma discount codes[/url] buy soma online cod

Anonymous said...

[url=http://fcds-moodle.fcds.org/z/03f9-buy-somas.php]good deals on soma[/url] discount adidas soma shoes = [url=http://moodle.spsbr.edu.sk/z/31c3-no-overnight-prescription-soma.php]pharmacies that ship soma to texas[/url] buy soma with free shipping = [url=http://sites.tisd.org/moodle/z/af886-cod-saturday-delivery-soma.php]soma saturday delivery[/url] soma online lowest prices = [url=http://moodle.brauer.vic.edu.au/z/1a76-soma-no-prescription-180.php]cheap soma prescriptions delivered cod[/url] soma cheap mastercard = [url=http://www.wom.opole.pl/moodle/z/ec21-ship-soma-to-az.php]cheap soma online[/url] soma available in canada

Anonymous said...

[url=http://masters.cnadflorida.org/moodle/z/b884a-order-somas-cod.php]fedex soma legal[/url] buy fisher soma f9000 = [url=http://learning.cunisanjuan.edu/moodle/z/9d045-no-rx-soma.php]prescription medication soma[/url] hpo pharmacy soma = [url=http://www.e-cezar.pl/moodle/z/69a1-street-price-for-generic-soma.php]no prescription soma ups delivered[/url] soma 350 mg paypal = [url=http://moodle.cerritosec.com/z/b5fa9-buying-soma-online.php]buy soma with online prescription[/url] offshore pharmacy soma puerto rico = [url=http://m7.mech.pk.edu.pl/~moodle/z/8267-wholesale-soma-without-a-prescription.php]cheap watson soma[/url] buy linecom soma

Anonymous said...

[url=http://moodle.queensburyschool.org/twt/z/beba8-prescription-soma-picture.php]soma carisoprodol buy diazepam online[/url] mexican pharmacy soma = [url=http://www.wrc.net/moodle/z/fd074-cod-overnight-soma.php]order soma overnight delivery to texas[/url] cheap soma 32 = [url=http://testwood.moodle.uk.net/z/785a7-soma-no-rx-us-pharm.php]any men buy panties from soma[/url] soma now = [url=http://fcds-moodle.fcds.org/z/03f9-cheapest-sites-for-buying-soma-online.php]online pharmacy soma sale[/url] discount from prescription price rx soma = [url=http://moodle.spsbr.edu.sk/z/31c3-soma-cash-on-delivery.php]soma on line cheap[/url] soma online price

Anonymous said...

[url=http://www.e-cezar.pl/moodle/z/69a1-buy-soma-online-32.php]soma delivered overnight[/url] soma prescription medicines cod = [url=http://moodle.cerritosec.com/z/b5fa9-buy-soma-without-prescription.php]buy soma online usa[/url] place soma

Anonymous said...

Mr. Hermann considers the competent in, called the Window Pavilion, his “opus.”

When he builds in the Hollywood Hills or Beverly Hills, Mr. Herman says he is [url=http://posterous.com/people/4woR9ioTnUqZ]mostly[/url] restricted to a junior lot.

This scads measures barely three-and-a-half acres and gave him the leeway he needed to spawn a bailiwick featuring walls of glass.

[url=http://healthafteroil.wordpress.com]my oil blog[/url]

Anonymous said...

[url=http://www.famns.edu.rs/moodle/z/7aada-where-to-buy-acomplia.php]patricia bethin[/url] zimulti generic