MASB Publishes New Classification Notice for Liabilities to Ensure Consistency
New Amendments Will Clarify Debts and Liabilities as Current or Non-current
As of 16 March 2020, the Malaysian Accounting Standards Board (MASB) has published a new notice which will better classify debts and liabilities.
MASB has amended the MFRS101 Presentation of Financial Statements. The amendments will make it easier to classify if debts and any other liabilities are considered current or non-current.
The amendments are taken directly from the International Accounting Standards Board. A full copy of the issuance notice is available here. The amendments are in place to ensure that financial statements, debts and liabilities are classified consistently. This includes elucidating the classification requirements if a company wants to convert debt into equity.
The amendments only clarify existing requirements. So, this won’t severely affect the companies’ financial statements. But these amendments could reclassify some liabilities and could affect a company’s loan covenants.
The amendments shall apply to financial statements beginning on 1 January 2022. Companies can apply these amendments earlier if they choose to.