Property, plant and equipment exemptions and MPERS

What are the exemptions in Paragraph 35.10 of MPERS that relates to measuring assets (which includes PPE, investment properties and intangible assets) at the date of transition?

There are no exemptions relating PPE, investment properties and intangible assets as the existing measurement and recognition methods used under the existing PERS is allowed to be continued under MPERS

Fair value as deemed cost and revaluation as deemed cost

Fair value as deemed cost, original acquisition cost as deemed cost and revaluation as deemed cost

Fair value as deemed cost

If an entity did not elect to use the exemption in paragraph 35.10(d), how would it account for its property, plant and equipment currently stated at revaluation under PERS when transiting to MPERS?

The property, plant and equipment would then have to be immediately derecognised from the financial statements on the date of transition to MPERS

The entity would, in accordance with paragraph 35.7(c) and paragraphs 17.9–17.26, continue to state the property, plant and equipment under the revaluation-depreciation-impairment model in accordance with Section 17

The property, plant and equipment at revaluation would be restated to what would have been the carrying amount under a cost-depreciation-impairment model as if revaluation effects were never recognised in the first place

The entity would, in accordance with paragraph 35.7(c) and paragraphs 17.9–17.26, continue to state the property, plant and equipment using the revalued amount but under a fair value model in accordance with Section 17. Thereafter, annual valuation to market value would be required

Under the transition exemption of Malaysian Financial Reporting Standards (MFRS), how would a brought forward asset revaluation reserve from the PERS framework be treated upon transition to MPERS

Any existing revaluation reserve relating to previous revaluation of property, plant and equipment (and investment property) is reclassified to a new component of equity that is to be called New Revaluation Reserve

Directors of reporting entities may use their judgement that would result in a fair presentation in determining how to treat any brought forward asset revaluation reserve from a previous financial reporting framework upon transition

Any existing revaluation reserve relating to previous revaluation of property, plant and equipment (and investment property) is reclassified to retained earnings or a separate component of equity, but is not described as revaluation reserve

MFRS does not provide any prescription on how to treat any brought forward asset revaluation reserve from a previous financial reporting framework upon transition

If an entity measures its PPE using a cost model under the existing PERS, it can elect to use fair value as the deemed cost. If an entity uses fair value (upon performing a valuation) as deemed cost for any items, how is the transition to MPERS treated?

The entity recognises the increase in the value of the PPE from valuation in its current year profit and loss and property, plant and equipment in its current statement of financial position in the year of effective adoption of MPERS (i.e. financial year 2016) for the effects of measuring the property, plant and equipment at its deemed cost

The entity adjusts any related liability and property, plant and equipment in its opening statement of financial position on the date of transition (for FYE 31 December 2016, the date of transition would be at 1 January 2016) for the effects of measuring the property, plant and equipment at its deemed cost (fair value on 1 January 2016)

The entity adjusts its retained earnings and property, plant and equipment in its opening statement of financial position on the date of transition (for FYE 31 December 2016, the date of transition would be at 1 January 2015) for the effects of measuring the property, plant and equipment at its deemed cost (fair value on 1 January 2015)

The entity adjusts its property, plant and equipment in its opening statement of financial position on the date of transition (for FYE 31 December 2016, the date of transition would be at 1 January 2015) for the effects of measuring the property, plant and equipment at its deemed cost (fair value on 1 January 2015)

There are concerns relating to the revaluation reserve arising from previously revalued property, plant and equipment under PERS that are brought forward on the date of transition to MPERS as the deemed cost. As Section 35 of the MPERS does not provide any explicit prescription on how to deal with this revaluation reserve, how would preparers of MPERS compliant financial statements deal with the revaluation reserve brought forward?

Preparers would have to refer to the treatment under the Malaysian Financial Reporting Standards (MFRS) on how to treat this reserve, based on the prescription of MFRS 1First-time Adoption of Malaysian Financial Reporting Standards

Preparers would have to refer to the measurement concepts for assets, liabilities, income and expenses and the pervasive principles in Section 2 Concepts and Pervasive Principles, as this section provides explicit prescription on how to treat the brought forward revaluation reserve arising from the previous financial reporting framework

Preparers would have to refer to requirements and guidance in dealing with similar and related issues, and the definitions, recognition criteria in other available sections in MPERS that provides explicit prescription on how to treat the brought forward revaluation reserve arising from the previous financial reporting framework

Preparers would have to refer to the treatment under the Malaysian Financial Reporting Standards (MFRS) on how to treat this reserve, based on the prescription of MFRS 116 Property, Plant and Equipment

Property, plant and equipment exemptions and MPERS

What are the exemptions in Paragraph 35.10 of MPERS that relates to measuring assets (which includes PPE, investment properties and intangible assets) at the date of transition?

If an entity did not elect to use the exemption in paragraph 35.10(d), how would it account for its property, plant and equipment currently stated at revaluation under PERS when transiting to MPERS?

Under the transition exemption of Malaysian Financial Reporting Standards (MFRS), how would a brought forward asset revaluation reserve from the PERS framework be treated upon transition to MPERS

If an entity measures its PPE using a cost model under the existing PERS, it can elect to use fair value as the deemed cost. If an entity uses fair value (upon performing a valuation) as deemed cost for any items, how is the transition to MPERS treated?

Section 35.10 of MPERS several exemptions in preparing its first financial statements that conform to MPERS. Which of the following exemptions refers to paragraph 35.10(c)?

If an entity measures its PPE using a cost model under the existing PERS, it can elect to use fair value as the deemed cost under the transitional exemption in paragraph 35.10(c). What would be the treatment if the entity did not elect to use the exemption in paragraph 35.10(c)?

What was one of the major amendments put forth in the 2015 Amendments to the MPERS issued by MASB on 28 October 2015?

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