- FRS 139 Financial Instruments–Recognition and Measurement, no more delay

FRS 139 was issued in 2006 but was deferred indefinitely in view of its complexity and that entities are not ready to comply. As the Financial Reporting Foundation (FRF) and the Malaysian Accounting Standard Board (MASB) have announced plan to achieve full convergence with IFRS by 1 January 2012, there is no more excuses for delay in applying FRS 139. Full convergence is a serious matter. The implication is that the moment IASB issues a standard we have to follow. We do not have the luxury of time anymore. Before we have 2 periods of draft reviews i.e. first before IASB issues a standard second before MASB adopts the new standard. Come 2012, the second period will be dropped. Judging from the announcements articles and news in the financial press, journals and media in recent months, there is now a heightened urgency to try to understand the provisions and implications in applying FRS 139. FRS 139 is effective 1 January 2010. So, why 2010 for FRS 139 and 2012 for other IFRSs? This is because FRS 139 is an important standard in the FRS series as it affects other standards and interpretations. To delay FRS 139 would mean delaying many other standards related to it. And we can’t wait till 2010. We need to apply it now. The answer is simply because 2009 will be the comparative year for 2010. Entities must establish implementation plans and assess potential impact of changes. Education and training is key to ensuring smoother transition and implementation.