One in the bag, more work for MASB

THE Malaysian Accounting Standards Board (MASB) successfully hosted the first meeting of the Asian-Oceania Standard-Setters Group (AOSSG) meeting in Kuala Lumpur last week. The meeting was attended by more than 100 representatives from 21 accounting standard setting bodies from the Asia and Oceania regions.

Sir David Tweedie, the chairman of the International Accounting Standards Board (IASB) and a number of top guns from the international standards setting body were also present to show support and to provide updates to participants of the meeting.

The Kuala Lumpur AOSSG meeting saw the signing of the memorandum of understanding (MoU) which formalised the regional grouping. The MoU crystallised the objectives of AOSSG which, among others, included coordinating the input from the region to the technical activities of IASB and to cooperate with governments, regulators and other regional organisations to improve the quality of financial reporting in the region.

The formation of AOSSG is to provide views from this region to IASB. Given that the future growth of the world would come significantly from Asia, it would be appropriate that the interests of the region is given due consideration when a position is taken at the global level. This is more important as IASB is courting the Americans to announce the date of convergence between international and American accounting rules.

Malaysia was honoured when MASB was chosen to be the first chair of AOSSG. With this position, MASB would be able to set the agenda and workplan for this new regional group. This is important as more countries are aligning themselves to be in convergence with the IFRS standards. It is also hoped that by being the first driver, MASB would be able to promote areas which have significant impact to our interest — accounting for Islamic finance and transactions among the government-linked corporations are examples that could be considered.

Given that the membership of AOSSG includes accounting standard setters from major trading countries such as China, Japan, Australia and South Korea, it would be interesting to observe how this new regional grouping would operate and achieve consensus in decision-making. Hopefully the modus operandi that was also adopted at the Kuala Lumpur meeting would help to shape operational efficiency of AOSSG.

At the same time, MASB is expected to lead and play a more definitive role in steering Malaysia's own convergence agenda. The 2012 target is not that far away and time is really not on our side. 2010 will set the convergence agenda in motion when FRS 139 will be effective. While there are opposing views on whether this should proceed, any reversal would reinforce the perception that we tend to flip-flop when it comes to making critical decisions. Any date would not be a good date as the world keeps moving with new issues and challenges.

Beyond IFRS 139, there are other standards and interpretations which need to be brought in before the 2012 deadline. Among these are accounting for agriculture where PLANTATION [] companies would need to fair value their plantation assets, and accounting for property development where revenue is recognised based on whether control over the property development assets has been transferred or not. These issues need to be brought into the public sphere and the stakeholders need to participate in the debate so that the full impact is understood. Otherwise, complaints are only raised after things are settled and done with, as what we usually do in Malaysia.

Another issue that needs the attention of MASB and other relevant parties is the supply of competent human resource to the capital market to ensure IFRS could be implemented effectively. This issue needs to be appreciated and attended to, to ensure that our listed companies are not left with complicated standards but without enough people who could implement those standards.

MASB had said in the past that with convergence, Malaysia has to approach accounting standards setting differently. Being involved in the international due process very much upfront is one of the ways in which the game is now expected to be played. The chairmanship of AOSSG has given MASB a golden opportunity to make good the strategy that it has identified.

At the same time, input from stakeholders is critical as quality arguments with compelling data and supporting information would ensure our points of view are respected. This is where all stakeholders representing the preparers, auditors, educators and regulators need to be more involved when consultations are made by MASB.

Given its new role in AOSSG, it is hoped that MASB would be provided with adequate resources and talents to be effective regionally and domestically. Shaping an infant regional organisation is not an easy task, what more when the issues at hand involve matters that are close to the hearts of policymakers. Even the Group of 20 nations (G20) has placed accounting standard setting on their meeting agenda.

The convergence agenda in Malaysia requires MASB's leadership, and as discussed above, the issues are aplenty!

This article is also available on the Edge Malaysia website http://www.theedgemalaysia.com/business-news/153249-one-in-the-bag-more-work-for-masb.html