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ACCA and MICPA sign Mutual Recognition Agreement(MRA)

slang — Mon, 08 Sep 2008 16:04:22 +0000

At a ceremony on August 13, 2007 at Le Meridian Kuala Lumpur attended by Dato’ Nordin Baharuddin , MICPA President and Mrs Gillian Ball, ACCA President, a Mutual Recognition Agreement (MRA) was signed by The Malaysian Institute of Certified Public Accountants (MICPA) and ACCA (the Association of Chartered Certified Accountants) with the following details:

provides a route for members of both MICPA and ACCA to join the other body, and enjoy the benefits which both respected designations can offer.
ACCA is the world’s largest and fastest-growing professional international accountancy body with 296,000 students and 115,000 members based in 170 countries.
MICPA is an established professional accountancy body with technical excellence. It has over 3,000 CPAs engaged in public accounting practice and various fields of employment and close to 800 students pursuing the CPA qualification.

Tabulate below:

MUTUAL RECOGNITION AGREEMENT(MRA) SIGNED BETWEEN ACCA & MICPA

For ACCA Members

For MICPA Members

ACCA members may obtain MICPA membership by passing the MICPA Admitting Examination

Alternatively, ACCA members with more than 5 years post-qualification experience can qualify for CPA membership by passing an interview with the MICPA Membership Admission Panel. Upon obtaining CPA membership they will gain a prestigious CPA designation with technical excellence.

MICPA members wanting to gain ACCA membership will have to prepare for and pass ACCA’s Professional Accountant paper, P1, from the final level of ACCA’s examinations.

Alternatively, those MICPA members with more than 5 years post-qualification experience can qualify for ACCA membership by taking the ACCA online Professional Ethics module, a key part of ACCA’s revised 2007 professional syllabus or the ACCA Critical Incident Questionnaire. Upon obtaining the ACCA membership they will gain a globally recognised and portable qualification.

Helen Brand Appointed As New Head of ACCA Global

slang — Fri, 05 Sep 2008 10:20:00 +0000

The Association of Chartered Certified Accountants (ACCA) has appointed Helen Brand as its new chief executive officer effective Sept 1. Brand replaces Allen Blewitt, who returned to after being based at the association’s headquarters in London the last five years.

According to the new CEO:

She aims to maintain ACCA’s position as the lead global accountancy body in terms of reputation and size.
The challenge is to make sure that ACCA stay ahead and achieve its potential. This is because the Association is one of the world’s largest and fastest-growing accountancy bodies with 122,426 members and 325,606 affiliates and students in 170 countries. As at Sept 3, had 33,000 ACCA members, students and affiliates.
The emphasis is very much on the growth in members, not growth in students. What ACCA is most concerned with is that the people who register as students become members and play a role as a full professional accountant.
She attributed ACCA’s popularity to its ability to meet the growing global demand for accountants equipped with a common international standard. More countries are adopting the International Financial Reporting Standards IFRS, which are international accounting standards adopted by the International Accounting Standards Board (IASB). Malaysia plans full convergence with IFRS by Jan 1, 2012. The US looks set to adopt IFRS as well. (Businessweek reported last month that the US Securities and Exchange Commission would allow some companies to report under IFRS as early as 2010 and would require it of all companies by 2014.)
One of the final pieces of the jigsaw is the US adopting the international standards.

(Source: The Edgedaily 5-9-2008

MIA Seeks Enhanced Regulatory Role, Better Recognition

slang — Wed, 21 Nov 2007 05:13:54 +0000

The Malaysian Institute of Accountants (MIA) has proposed to amend the Accountants’ Act 1967 so as to enable it to participate more actively in designing surveillance mechanisms and disciplinary actions against errant accountants. By having such amendments, MIA also want to enhance local accountants’ competitiveness on the global front.

MIA president Nik Mohd Hasyudeen Yusoff said that MIA has already worked with the Ministry of Finance and have issued a consultative document regarding the proposed amendments to various key players such as the Securities’ Commission, Bank Negara, universities and other professional accounting bodies. MIA has obtained their feedback and will be finalizing the proposed amendments by the end of the year and hope that the proposed new amendments can tabled at the Parliament as soon as possible,

At the opening ceremony of the National Accountants Conference 2007 themed “Accountants: Towards Excellence, Achieving World Class” Nik Mohd Hasyudeen said the MIA was looking at how the accounting profession could be restructured in order to be resilient towards the changes in a competitive environment, partly due to globalisation, in which changes to the Accountants’ Act 1967 would be required.
Examples some of the shortfalls that can be addressed are

to have a more robust process in the accounting environment, so that MIA can react faster to make sure public confidence in the capital market is sustained, for instance, under the current Act, we find difficulty in addressing the distress in the capital market because of the way the Act is structured.
With the amendments, MIA would be able to investigate alleged accounting malpractices faster by enlarging the number of investigative committees that would speed up the process and help prevent adverse reports from circulating in the capital market.
would allow MIA to recognise more overseas accountants, and vice versa. For example, there are accountants from Vietnam that are interested in practising in Malaysia In turn the MIA member can also be accepted as professional accountants overseas.
(The Star,Malaysia,13/11/07)

MASB To Issue 4 Financial Reporting Standards This Year

slang — Thu, 01 Feb 2007 13:11:42 +0000

Since 2005,MASB had been joining IASB in the process of developing new financial reporting standards in order to ensure the standards were acceptable prior to issuing them in Malaysia.

For this year, The Malaysian Accounting Standards Board (MASB) is reviewing four financial reporting standards issued by the International Accounting Standards Board (IASB) and and plans to issue the standards this year if the consultative process run well. Besides this, MASB is also reviewing five other interpretations.

The four standards MASB is reviewing are:-

· IAS41 Agriculture,

· IFRS4 Insurance Contracts,

· IFRS7 Financial Instruments: Disclosure, and

· IFRS8 Operating Segments.

According to MASB executive director Nordin Mohd Zain :

· Though there are fewer new standards to be introduced by IASB this year, Malaysia needed to issue the pending standards to keep pace with IASB

· In the past, MASB can be more definitive in issuing a particular standard because many of the standards are easy. However, Standards of late are complex.

· IASB had extended the deadline to Jan 1, 2009 for countries to fully comply with the financial reporting standards issued by IASB.

· On the agriculture standard, which had been deliberated since 2000, there were difficulties in applying the standard, which required plantation companies to fair-value their “biological assets”, including livestock. Todate, MASB had shared views with plantation companies in the country in relation to the practicality of the agriculture standard, and had presented to IASB the Malaysian perspective on the standard last year.

MIA Sets Up Committee On FRS Implementation

slang — Thu, 01 Feb 2007 13:04:24 +0000

On Jan 30, Malaysian Institute of Accountants (MIA) has launched the Financial Reporting Standards Implementation Committee (FRSIC).

According to MIA president Abdul Rahim Abdul Hamid,

· FRSIC was set up as there is the absence of a specific organisation that could facilitate the implementation of the standards, particularly on contentious or gray areas and to provide guidance to accountants, auditors and preparers on the implementation of financial reporting standards

· FRSIC deals with the issues of implementation, not interpretation, to narrow the differences (between various judgments) to a more acceptable range

· Malaysian Accounting Standards Board (MASB) would still be the “standard setter” dealing with the issuance and interpretation of standards.

· The committee is made up of seven members comprising four MIA council members and three members from professional bodies recognised under the Accountants Act.

· There are also five observers, one each from the Securities Commission (SC), Bursa Malaysia, Bank Negara Malaysia, Companies Commission of Malaysia and MASB.

· The committee would discuss and come up with a consensus on issues related to the implementation of the standards, after which it would produce and circulate the guidance to MIA members. The guidance notes would then become “best practices”, which must be followed by MIA members.

IFRS 3: Accounting For Business Combination

slang — Sat, 23 Sep 2006 02:57:45 +0000

Since 31 March 2004,IFRS 3 (Accounting for Business Combinations) is mandatory for companies to account for any business combinations.

You might be wondering why IFRS 3 has any involvement with this brand article.

The answer is simple: you will notice that in any business combination there is always an element of purchased goodwill which can be quite colossal.

As investor, this large acquired goodwill might not omen well. –could it be due to bad negotiation/deal or the intangibles like brands and others are not been properly valued. Furthermore, don’t forget that goodwill is subjected to the impairment test hence any material impairment of that goodwill in the future will again be read as an indication of a poor deal.

To be more precise to answer what is goodwill: IFRS 3 actually has given the definition which is as follows:

“Goodwill represents a payment made by the acquiring entity in anticipation of future economic benefits from assets that are not capable of being individually identified and separately recognized”.

Acquired goodwill represents the difference between the purchase consideration and the total of the fair values of all the acquired assets and liabilities.

So, once again, even this Accounting standard lend support to ensure intangibles assets and brands should be properly valued in the books.

A few basics on IFRS 3:

The acquiring entity must recognise all the identifiable assets, liabilities and contingent liabilities of the acquired entity, irrespective of whether they were recognised in that entity’s balance sheet, at fair value where it can be measured, where it is probable that:
future economic benefits from a tangible asset will flow to the acquirer and
an outflow of resources will be required to settle a liability

In the case of intangible assets and contingent liabilities, it is sufficient that they are identifiable and that their fair values can be measured reliably. If so, they must be recognised.

If the residual goodwill turns out to be negative, then the negative goodwill is taken straight to profit.
The intangible assets have to be assigned useful lives.
If there is no foreseeable limit to the period of future cash flows from the asset, it should be assigned an indefinite life, in which case there is no amortisation charge. Normally for brands and mastheads
For all other intangible assets, the useful life is defined by the period of future cash flows and depends on factors like technological advances, length of patent protection, etc. Such assets must be amortised over that life, normally on a straight line basis.
For intangibles with indefinite lives, it is necessary to review annually the value of intangibles for any impairment. If the calculated fair value of the intangible is lower than its book value, that value must be written down to the impaired value. If, in future years, the fair value increases again, the write down can be reversed.
Goodwill is always considered to have an indefinite life and is also subject to annual impairment testing, but this differs from that for intangibles in two respects.
Firstly, any impairment of goodwill is deemed to be permanent and cannot be reversed in the future.
Secondly, goodwill does not, directly, generate cash flows. It must be assigned to a cash generating unit and it is the total value of all the assets, including goodwill, of the cash generating unit that is compared to its fair value. In the event of a shortfall, the goodwill is reduced in value by a charge to profit.
Goodwill should be assigned to cash generating units at the level at which management monitors goodwill. In practice, management frequently doesn’t manage goodwill other than at group level, so that the reporting segments define the upper limits for cash generating units. If it can be argued that the cash flows within a segment are inter-related, for instance if the segment comprises vertically production and sales and distribution units, it should be possible to assign goodwill at the segment level.
Identifying intangible assets and contingent liabilities will be a key area. Valuations of these assets and liabilities will need to be supported and consideration given to the use of appropriate internal, or external, expertise to provide supporting evidence.

Highlight of Changes – Financial Reporting Standard 133

slang — Fri, 09 Jun 2006 05:52:17 +0000

Extracted from MASB
FRS 133 Earnings per Share take effect for annual periods beginning on or after 1January 2006
The main are tabulated as follows:

Area

Requirements

Main objective

To provide additional guidance and illustrative examples on selected complex matters, such as the effects of contingently issuable shares; potential ordinary shares of subsidiaries, joint ventures or associates; participating equity instruments; written put options; purchased put and call options; and mandatory convertible instruments.

Highlight of Changes – Financial Reporting Standard 108

slang — Fri, 09 Jun 2006 05:39:44 +0000

Extracted from MASB
FRS 108 Accounting Policies, Changes in Accounting Estimates and Errors take effect for annual periods beginning on or after 1January 2006
The main changes from FRS 108- 2004 are tabulated as follows:

Relevant Area

Requirements

Selection of Accounting Policies

The requirements for the selection and application of accounting policies in FRS 1012004 Presentation of Financial Statements have been transferred to the Standard.

The Standard updates the previous hierarchy of guidance to which management refers and whose applicability it considers when selecting accounting policies in the absence of Standards and Interpretations that specifically apply.

Materiality

The Standard defines material omissions or misstatements. It stipulates that:

(a) the accounting policies in Financial Reporting Standards (FRSs) need not be applied when the effect of applying them is immaterial. This complements the statement in FRS 101 that disclosures required by FRSs need not be made if the information is immaterial.

(b) financial statements do not comply with FRSs if they contain material errors.

(c) material prior period errors are to be corrected retrospectively in the first set of financial statements authorised for issue after their discovery.

Voluntary Changes in Accounting Policies and Corrections of Prior Period Errors

The Standard requires retrospective application of voluntary changes in accounting policies and retrospective restatement to correct prior period errors.

It removes the allowed alternative in FRS 1082004:

(a) to include in profit or loss for the current period the adjustment resulting from changing an accounting policy or the amount of a correction of a prior period error; and

(b) to present unchanged comparative information from financial statements of prior periods.

Impracticability

The Standard retains the ‘impracticability’ criterion for exemption from changing comparative information when changes in accounting policies are applied retrospectively and prior period errors are corrected.

Includes a definition of ‘impracticable’ and guidance on its interpretation.

Also states that when it is impracticable to determine the cumulative effect, at the beginning of the current period, of:

(a) applying a new accounting policy to all prior periods, or

(b) an error on all prior periods,

The entity changes the comparative information as if the new accounting policy had been applied, or the error had been corrected, prospectively from the earliest date practicable.

Fundamental Errors

Eliminates the concept of a fundamental error and thus the distinction between fundamental errors and other material errors. The Standard defines prior period errors.

Disclosures

The Standard now requires, rather than encourages, disclosure of an impending change in accounting policy when an entity has yet to implement a new Standard or Interpretation that has been issued but not yet come into effect.

In addition, it requires disclosure of known or reasonably estimable information relevant to assessing the possible impact that application of the new Standard or Interpretation will have on the entity’s financial statements in the period of initial application.

Requires more detailed disclosure of the amounts of adjustments resulting from changing accounting policies or correcting prior period errors.
Requires those disclosures to be made for each financial statement line item affected and, if FRS 133 Earnings per Share applies to the entity, for basic and diluted earnings per share.

Other Changes

The presentation requirements for profit or loss for the period have been transferred to FRS 101.

Incorporates the consensus in IASB SIC-18 Consistency – Alternative Methods, namely that:

(a) an entity selects and applies its accounting policies consistently for similar transactions, other events and conditions, unless a Standard or an Interpretation specifically requires or permits categorisation of items for which different policies may be appropriate; and

(b) if a Standard or an Interpretation requires or permits such categorisation, an appropriate accounting policy is selected and applied consistently to each category.

As a result of the removal of the allowed alternative, comparative information for prior periods is presented as if new accounting policies had always been applied and prior period errors had never occurred.

The consensus in IASB SIC-18 incorporated the consensus in IASB SIC-2 Consistency – Capitalisation of Borrowing Costs, and requires that when an entity has chosen a policy of capitalising borrowing costs, it should apply this policy to all qualifying assets.

Includes a definition of a change in accounting estimate.

Includes exceptions from including the effects of changes in accounting estimates prospectively in profit or loss. It states that to the extent that a change in an accounting estimate gives rise to changes in assets or liabilities, or relates to an item of equity, it is recognised by adjusting the carrying amount of the related asset, liability or equity item in the period of the change.

Deferment of FRS 139: Financial Instruments: Recognition and Measurement

slang — Fri, 02 Jun 2006 05:39:58 +0000

LISTED companies were required to state the “paper profits” they have in their share investments under the new Financial Reporting Standards (FRS) this year, until the Malaysian Accounting Standards Board (MASB) deferred that indefinitely.

The MASB stated in an advertisement in The Star on Friday that the date to comply with FRS 139 was deferred to a date to be announced by the board.

It is FRS 139 that required investment equities to be marked-to-market, and the surplus or deficit over cost be stated as earnings or losses in the profit and loss (P&L) accounts.

MASB: FRS Now Optional for Private Companies

slang — Fri, 02 Jun 2006 05:18:43 +0000

Press Release From MASB (Thu, 23 Feb 2006)

“Financial Reporting Standards are now optional for private companies with the announcement of two sets of accounting standards by the Malaysian Accounting Standards Board (MASB). This will bring cheer to a few thousands of small and medium sized entities (SME) in Malaysia.”
Salient Points Extracted are:

Now there can be two (2) sets of standards namely Financial Reporting Standards (FRS) and Private Entity Reporting Standards (PERS).

FRS are for companies such as publicly listed companies, their subsidiaries, associates, or companies jointly controlled by them. PERS are for private entities. Private entities are not affected by the revisions and the requirements of the new standards issued under the FRS regime. Private entities are given the option to use FRS

MASB recognised that privately-run companies have different information needs. The Board is also sensitive to the burden of compliance by these companies if they were to comply with international financial reporting standards.

Essentially, PERS are MASB Standards issued by the Board prior to 1 January 2005 except for the removal of certain Standards. In addition, PERS include an amendment regarding the applicability and compliance with the standards effective 1 January 2006.

If an entity chooses FRS or PERS, it must comply with the full set of FRS or PERS respectively in their entirety.