Bank Negara issues Policy Document on Financial Reporting for Development Financial Institutions

Bank Negara Malaysia has issued the Policy Document on Financial Reporting for Development Financial Institutions (‘Policy Document’) on 2 December 2022.
 
The Policy Document applies to an institution that, inter alia, carries on any activity with the purpose of promoting development in the industrial, agricultural, commercial or other economic sector, including the provision of capital or other credit facility, and has been prescribed as a prescribed development financial institution by the Minister of Finance under subsection 2(1) of the Development Financial Institutions Act 2002 (‘DFI’).
 
The Policy Document clarifies and sets the minimum expectations for the application of the Malaysian Financial Reporting Standards (MFRS) to DFIs.
 
Apart from facilitating the assessment of a DFI’s financial position and developmental or mandate achievements, the Policy Document aims to ensure adequate disclosures by DFIs in the financial statements to improve comparability for users of financial statements.
 
For better compliance with the Shariah, the Policy Document also sets out the information to be disclosed by DFIs in their financial statements arising from the Shariah contracts applied in Islamic banking transactions.
 
The Policy Document came into effect on 2 December 2022 and supersedes the Guidelines on Financial Reporting for Development Financial Institutions issued on 28 July 2020.
 
Alert by Kok Chee Kheong (Partner) of the Corporate Practice of Skrine.
 

This alert contains general information only. It does not constitute legal advice nor an expression of legal opinion and should not be relied upon as such. For further information, kindly contact skrine@skrine.com.