FRS Highlights

In order to keep pace with the international reporting standards, in July 2004, the Council on Corporate Disclosure and Governance (CCDG) issued five new FRSs.

To date, CCDG has issued all the equivalent international standards or exposure drafts. For small and medium enterprises (SMEs), the areas to be focused on would be:

  • Related party disclosures: extend the definition of "related parties", and add new requirements on disclosures.
  • Impairment test: require an annual test for certain assets, including property, plant and equipments; goodwill; and intangible assets.
  • Financial instruments: include staff loans, intercompany loans below market interest rates, provision for doubtful debts and impairment of investments in equity securities.

At the moment the International Accounting Standards Board (IASB) is looking at accounting standards for SMEs to reduce administrative and accounting burdens. However, this project is still at a relatively early stage, and we do not know if and when such a set of standards will be available. In our opinion, local corporates and the accounting profession should embrace themselves for these challenges and plan early.

For detailed interpretation of FRS, Please click here

 

Updated January 2006