What accounting standards are used in Malaysia?

In Malaysia, accounting standards are primarily governed by the Malaysian Financial Reporting Standards (MFRS), which closely align with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB). Oversight and enforcement of these standards are managed by the Malaysian Accounting Standards Board (MASB), ensuring consistency, transparency, and comparability in financial reporting for both public and private entities.

MFRS for Public and Large Private Companies

The MFRS framework applies to:

• Public-listed companies and their subsidiaries

• Large private enterprises with high public accountability, such as banks and insurance companies

It provides a comprehensive set of standards covering recognition, measurement, presentation, and disclosure of financial transactions. Key standards include:

• MFRS 15 – Revenue from Contracts with Customers

• MFRS 16 – Leases

• MFRS 9 – Financial Instruments

These standards are directly based on IFRS, ensuring global comparability.

MPERS for SMEs

For small and medium-sized enterprises (SMEs), Malaysia offers the Malaysian Private Entities Reporting Standard (MPERS) as a simpler alternative to MFRS. MPERS is also based on IFRS for SMEs but is structured to reduce complexity and compliance costs while maintaining high-quality financial reporting.

Private entities that are not SMEs may choose between MPERS and MFRS depending on their operational needs and stakeholder requirements.

Importance of Compliance

Adherence to MFRS or MPERS ensures:

• Conformity with global best practices

• Improved cross-border investment opportunities

• Consistency and reliability in financial reporting

Businesses must stay updated with MASB releases, as standards are periodically revised to reflect Malaysia’s evolving economic landscape.

 

To ensure proper execution and compliance, the guidance of skilled accountants familiar with MFRS and MPERS is highly recommended. For foreign investors and local businesses alike, Offshore Company Services provides comprehensive accounting services in Malaysia, including financial reporting, regulatory compliance, and advisory support, helping enterprises navigate the standards efficiently while maintaining full legal compliance.