Investigating the early implementation of MFRS 136 disclosure among top 50 firms in Malaysia

The highly prescriptive and technical provisions of MFRS 136 – Impairment of Assets represent a very considerable variationfrom past practices. This in turn raises questions about the span to which Malaysian businesses and their auditors have fared during the method of transition to a convoluted n...

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Main Authors:	Aisyah Abdul Rahman, Ahmad Syubaili Mohamed, Nur Hidayah Laili, Khairil Faizal Khairi
Format:	Article
Language:	English
Published:	Penerbit Universiti Kebangsaan Malaysia 2017
Online Access:	http://journalarticle.ukm.my/13295/ http://journalarticle.ukm.my/13295/ http://journalarticle.ukm.my/13295/1/23491-80922-1-PB.pdf

id	ukm-13295
recordtype	eprints
spelling	ukm-132952019-08-27T21:12:51Z http://journalarticle.ukm.my/13295/ Investigating the early implementation of MFRS 136 disclosure among top 50 firms in Malaysia Aisyah Abdul Rahman, Ahmad Syubaili Mohamed, Nur Hidayah Laili, Khairil Faizal Khairi, The highly prescriptive and technical provisions of MFRS 136 – Impairment of Assets represent a very considerable variationfrom past practices. This in turn raises questions about the span to which Malaysian businesses and their auditors have fared during the method of transition to a convoluted new reporting regime. Malaysia through Malaysian Accounting Standards Board (MASB) made the requirements of the MFRS 136 - Impairment of Assets mandatory progressively since 1 January 2006 for some or all listed firms in Malaysia. Since then, Malaysian companies are required to comply with the standard. The purpose of this paper is to investigate the compliance level of approved companies on the Bursa Malaysia main market towards the disclosure requirement of MFRS 136 - Impairment of Assets. This study also aims to identifying some factors associated with the level of compliance. The unweighted index was established by constructing the index checklist. The checklist was based on the requirement of disclosure of MFRS 136 (amended in 2009) and the annual reports of 50 sampled firms from 2010 to 2012 were examined. Then, we establish dependent variables and construct econometrical model to test the hypothesis in the research using Estimated Generalized Least Squares (EGLS) weights regression using cross-section weights. The result shows that 28 firms (56%), 27 firms (54%) and 24 firms (48%) out of 50firms in 2010, 2011 and 2012 respectively failed to comply with requirement of FRS 136 pertaining to goodwill impairment. This study suggests that the performance of the top 50 listed companies should improve before Malaysian practice can attain a truly international standard. This study also found that firm size, profitability and auditor type are associated with the extent of compliance with MFRS 136. However, only firm size and profitability were positively associated with the level of compliance while auditor type were negatively associated with the level of compliance. This indicates that bigger and more profitable firms were more motivated to exhibit greater transparency of MFRS 136. Penerbit Universiti Kebangsaan Malaysia 2017 Article PeerReviewed application/pdf en http://journalarticle.ukm.my/13295/1/23491-80922-1-PB.pdf Aisyah Abdul Rahman, and Ahmad Syubaili Mohamed, and Nur Hidayah Laili, and Khairil Faizal Khairi, (2017) Investigating the early implementation of MFRS 136 disclosure among top 50 firms in Malaysia. Asian Journal of Accounting and Governance, 8 ((SI)). pp. 59-76. ISSN 2180-3838 http://ejournal.ukm.my/ajac/issue/view/1068/showToc
repository_type	Digital Repository
institution_category	Local University
institution	Universiti Kebangasaan Malaysia
building	UKM Institutional Repository
collection	Online Access
language	English
description	The highly prescriptive and technical provisions of MFRS 136 – Impairment of Assets represent a very considerable variationfrom past practices. This in turn raises questions about the span to which Malaysian businesses and their auditors have fared during the method of transition to a convoluted new reporting regime. Malaysia through Malaysian Accounting Standards Board (MASB) made the requirements of the MFRS 136 - Impairment of Assets mandatory progressively since 1 January 2006 for some or all listed firms in Malaysia. Since then, Malaysian companies are required to comply with the standard. The purpose of this paper is to investigate the compliance level of approved companies on the Bursa Malaysia main market towards the disclosure requirement of MFRS 136 - Impairment of Assets. This study also aims to identifying some factors associated with the level of compliance. The unweighted index was established by constructing the index checklist. The checklist was based on the requirement of disclosure of MFRS 136 (amended in 2009) and the annual reports of 50 sampled firms from 2010 to 2012 were examined. Then, we establish dependent variables and construct econometrical model to test the hypothesis in the research using Estimated Generalized Least Squares (EGLS) weights regression using cross-section weights. The result shows that 28 firms (56%), 27 firms (54%) and 24 firms (48%) out of 50firms in 2010, 2011 and 2012 respectively failed to comply with requirement of FRS 136 pertaining to goodwill impairment. This study suggests that the performance of the top 50 listed companies should improve before Malaysian practice can attain a truly international standard. This study also found that firm size, profitability and auditor type are associated with the extent of compliance with MFRS 136. However, only firm size and profitability were positively associated with the level of compliance while auditor type were negatively associated with the level of compliance. This indicates that bigger and more profitable firms were more motivated to exhibit greater transparency of MFRS 136.
format	Article
author	Aisyah Abdul Rahman, Ahmad Syubaili Mohamed, Nur Hidayah Laili, Khairil Faizal Khairi,
spellingShingle	Aisyah Abdul Rahman, Ahmad Syubaili Mohamed, Nur Hidayah Laili, Khairil Faizal Khairi, Investigating the early implementation of MFRS 136 disclosure among top 50 firms in Malaysia
author_facet	Aisyah Abdul Rahman, Ahmad Syubaili Mohamed, Nur Hidayah Laili, Khairil Faizal Khairi,
author_sort	Aisyah Abdul Rahman,
title	Investigating the early implementation of MFRS 136 disclosure among top 50 firms in Malaysia
title_short	Investigating the early implementation of MFRS 136 disclosure among top 50 firms in Malaysia
title_full	Investigating the early implementation of MFRS 136 disclosure among top 50 firms in Malaysia
title_fullStr	Investigating the early implementation of MFRS 136 disclosure among top 50 firms in Malaysia
title_full_unstemmed	Investigating the early implementation of MFRS 136 disclosure among top 50 firms in Malaysia
title_sort	investigating the early implementation of mfrs 136 disclosure among top 50 firms in malaysia
publisher	Penerbit Universiti Kebangsaan Malaysia
publishDate	2017
url	http://journalarticle.ukm.my/13295/ http://journalarticle.ukm.my/13295/ http://journalarticle.ukm.my/13295/1/23491-80922-1-PB.pdf
first_indexed	2023-09-18T20:04:32Z
last_indexed	2023-09-18T20:04:32Z
_version_	1777407070076665856

Investigating the early implementation of MFRS 136 disclosure among top 50 firms in Malaysia

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