Malaysia FRS 124-Related Party Disclosure : Highlight of Changes

Published by slang May 30th, 2006 in MASB News, Malaysia

Extracted from MASB

FRS 124 Related Party Disclosure take effect for annual periods beginning on or after 1January 2006

The main changes from FRS 124- 2004 are tabulated as follows:

Section	Requirements
Scope	Expanded to include ALL entities except for exempt entities as defined in MASB SOP 1 Exempt Enterprise. The existing FRS 124 applies only to public listed companies and their subsidiaries
Definition	Expanded to include parties with joint control over the entity and joint ventures in which the entity is a venturer.
Removal of Exemption	Following are no longer exempted : A parent’s financial statements ( when they are made available with the consolidated financial statements) A wholly-owned subsidiary of a parent incorporated in Malaysia. Transactions between state-controlled enterprises.
Disclosure	Arm’s length disclosure is made only if such terms can be substantiated Disclosure of the compensation of key management personnel is now required Outstanding balances with related parties together with their terms and conditions including whether they are secured, and the nature of the consideration to be provided in settlement. Details of any guarantees given or received. Provisions for doubtful debts The settlement of liabilities on behalf of the entity or by the entity on behalf of another party. Classification of amounts payable to, and receivable from, related parties into different categories of related parties. The name of the entity’s parent and, if different, the ultimate controlling party. If neither of these two parties produces financial statements available for public use, the name of the next most senior parent that does so is required.

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