MASB9 Revenue pg1

http://www.masb.org.my/index.php?option=com_content&view=articl...

Sitemap

Location Map

Home

About Us

Our Standards

Other Pronouncements

Draft Pronouncements

Events

Media Room

General

Publication Order

Home

Our Standards

MASB Approved Accounting Standards for Private Entities

LEMBAGA PIAWAIAN PERAKAUNAN MALAYSIA MALAYSIAN ACCOUNTING STANDARDS BOARD Revenue

The standards, which have been set in the bold type should be read in the context of the background material and implementation guidance in this Standard, and in the context of the Foreword to MASB Standards. MASB Standards are not intended to apply to immaterial items.

Objective
Income is defined in the MASB's A Proposed Framework for the Preparation and Presentation of Financial Statements, as increases in economic benefits during the accounting period in the form of inflows or enhancements of assets or decreases of liabilities that result in increases in equity, other than those relating to contributions from equity participants. Income encompasses both revenue and gains. Revenue is income that arises in the course of ordinary activities of an enterprise and is referred to by a variety of different names including sales, fees, interest, dividends and royalties. The objective of this Standard is to prescribe the accounting treatment of revenue arising from certain types of transactions and events. The primary issue in accounting for revenue is determining when to recognise revenue. Revenue is recognised when it is probable that future economic benefits will flow to the enterprise and these benefits can be measured reliably. This Standard identifies the circumstances in which these criteria will be met and, therefore, revenue will be recognised. It also provides practical guidance on the application of these criteria.

Scope
1. This Standard should be applied in accounting for revenue arising from the following transactions and events: 1. the sale of goods; 2. the rendering of services; and 3. the use by others of enterprise assets yielding interest, royalties and dividends. 1. Exempt enterprises* need not comply with paragraphs 21 and 27 of this Standard. 2. This Standard supersedes MASB Approved Accounting Standard, IAS 18 Revenue Recognition and International Accounting Standard IAS 18 (revised) Revenue, issued by the Malaysian professional accountancy bodies. 3. Goods includes goods produced by the enterprise for the purpose of sale and goods purchased for resale, such as merchandise purchased by a retailer or land and other property held for resale. 4. The rendering of services typically involves the performance by the enterprise of a contractually agreed task over an agreed period of time. The services may be rendered within a single period or over more than one period. Some contracts for the rendering of services are directly related to construction contracts, for example, those for the services of project managers and architects. Revenue arising from these contracts is not dealt with in this Standard but is dealt with in accordance with the requirements for construction contracts as specified in MASB 7, Construction Contracts. 5. The use by others of enterprise assets gives rise to revenue in the form of:

1. interest - charges for the use of cash or cash equivalents or amounts due to the enterprise; 2. royalties - charges for the use of long-term assets of the enterprise, for example, patents, trademarks, copyrights and computer software; and 3. dividends - distributions of profits to holders of equity investments in proportion to their holdings of a particular class of capital.

1. This Standard does not deal with revenue arising from:

1. lease agreements (see MASB 10, Leases); 2. rentals from investment property (see MASB Approved Accounting Standard IAS 25, Accounting for Investments); 3. dividends arising from investments which are accounted for under the equity method (see MASB 12, Investment in Associates ); 4. insurance contracts of insurance enterprises (see MASB 17, General Insurance Business and MASB 18, Life Insurance Business); 5. sale of development units in property development activities (see MASB 32, Property Development Activities); 6. changes in the fair value of financial assets and financial liabilities or their disposal (see MASB 24, Financial Instruments : Disclosure and Presentation); 7. changes in the value of other current assets; 8. natural increases in herds, and agricultural and forest products; and 9. the extraction of mineral ores.

1 of 2

20/10/2010 5:15 PM

MASB9 Revenue pg1

http://www.masb.org.my/index.php?option=com_content&view=articl...

* (See MASB SOP 1 for the definition of an exempt enterprise).

Page | 1 2 3 4 5 6 7

Malaysian Accounting Standards Board Suite 5.02, Level 5, Wisma UOA Pantai, 11 Jalan Pantai Jaya, 59200 Kuala Lumpur. Tel : 603-2240 9200 Fax : 603-2240 9300 Email : masb@masb.org.my Financial Reporting Foundation and Malaysian Accounting Standards Board 2010. All Rights Reserved.
Site engineered by Ace Touchtone Sdn Bhd

2 of 2

20/10/2010 5:15 PM