Here are your three topics on accounting and capital markets matters.
IASB proposes amendments to IAS 12 impacting deferred taxes for lessees

  • Key message: IASB published an exposure draft (ED) clarifying how companies account for deferred tax on leases and decommissioning obligations. According to the ED, the exemption in IAS 12 does not apply to transactions for which companies recognise both an asset and a liability at the same time, e.g. leases. The ED is open for public comments to the IASB until 14 November 2019 or to the MASB until 26 September 2019.
How would MFRS 16 change sublease accounting for intermediate lessors?

  • Key message: MFRS 16 requires lessors to classify a lease as either an operating or finance lease. Intermediate lessors will have to assess this classification with reference to the right-of-use asset and not the underlying asset, which is a change from the old lease accounting standard, MFRS 117.
  • Practical impact: An increased likelihood that intermediate lessors will need to classify subleases as finance leases under MFRS 16.
  • What you should think about: Where you are an intermediate lessor, re-assessment of lease classification is required upon initial adoption of MFRS 16.
Companies (Amendment) Bill 2019: 4 key amendments relevant to financial reporting

  • Key message: Since the Companies Act 2016 came into force on 31 January 2017, the Companies Commission of Malaysia received feedback from stakeholders on the need for several provisions to be amended to ensure good practices and better compliance with the law. The Companies (Amendment) Bill 2019) was passed in the Dewan Rakyat on 10 July 2019 and the Dewan Negara on 31 July 2019 and will soon be gazetted.
  • Practical impact: There are 4 key amendments that are relevant to financial reporting:
(i) redemption of preference shares out of capital;
(ii) power to alter share capital;
(iii) non-conterminous accounting period of group companies; and
(iv) appointment and fixing of auditors’ remuneration at the Annual General Meeting of
public companies.

Hope you found these a good read. If you’d like to continue the conversation, feel free to get in touch with us. Previous issues of our newsletter can be accessed by clicking on "read past issues" below.

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