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Annual Improvements to MFRS Standards 2018–2020

Updated: Aug 14, 2022


Annual Improvements provide a mechanism for dealing efficiently with a collection of minor amendments to MFRS Standards.


The Annual Improvements to MFRS Standards 2018–2020 covers amendments to:

An entity shall apply that amendment for annual reporting periods beginning on or after 1 January 2022. Earlier application is permitted.


If an entity applies the amendment for an earlier period, it shall disclose that fact.


121.3 Annual improvements of MFRSs 2018 - 2020
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MFRS 1 First-Time Adoption of Malaysian Financial Reporting Standards by a subsidiary
  • Simplifies the application of MFRS 1 by a subsidiary that adopts MFRS later than its parent is now given the option to measure cumulative translation differences for all of its foreign operations based on the carrying amounts that would be included in the parent's consolidated financial statements.

MFRS 9 Financial Instruments on fees in the 10% test for Derecognition of Financial Liabilities

Clarify the company's fees when assessing whether the terms of a new or modified financial liability are substantially different from the terms of the original financial liability.


The result of the "10% test" will be impacted by this amendment; as a result, the amount of gain or loss recognised in the income statement will also be affected.


This change will affect all businesses, particularly those who apply an existing policy of including the costs of paying fees to third parties as part of the "10% test."


Illustrative Examples accompanying MFRS 16 Leases on Lease Incentive

To eliminate any potential confusion regarding whether or not the reimbursement would fulfil the definition of a lease incentive in MFRS 16, this amendment deleted the illustration from MFRS 16 referring to the reimbursement related to leasehold improvements provided by the lessor.


MFRS 141 Agriculture on Taxation in Fair Value Measurement


Removes a requirement to exclude cash flows from taxation when measuring fair value, thereby aligning the fair value measurement requirements in MFRS 141 with those in other MFRS Standards.


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