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KUALA LUMPUR: The Malaysian Accounting Standards Board (MASB) has published amendments to the Malaysian Financial Reporting Standards (MFRS) 107 and MFRS 7 to enhance disclosures of supplier finance arrangements.
In a statement today, MASB said it had issued the Supplier Finance Arrangements — Amendments to MFRS 107 Statement of Cash Flows and MFRS 7 Financial Instruments: Disclosures.
It said the amendments are word-for-word Supplier Finance Arrangements (Amendments to International Accounting Standard (IAS) 7 Statement of Cash Flows and the International Financial Reporting Standards (IFRS) 7 Financial Instruments: Disclosures) issued by the International Accounting Standards Board (IASB).
“Amendments to MFRS 107 and MFRS 7 respond to investors’ concerns that some supplier finance arrangements — also referred to as supply chain finance, trade payables finance or reverse factoring arrangements — used by entities are not sufficiently visible, hindering investors’ analysis,” it said.
MASB also noted that the disclosure requirements require entities to disclose information that would enable users of financial statements to assess how supplier finance arrangements affect an entity’s operations, including the effects supplier finance arrangements have on an entity’s liability, cash flows and exposures to liquidity risk.
The new disclosure requirements, it said, would also inform users of financial statements on how an entity might be affected if the arrangements were no longer available to it.
“The amendments will become effective for annual reporting periods beginning on or after Jan 1, 2024,” MASB added. – Bernama
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