Evaluation of Malaysian Business Reporting System - MBRS

In compliance with the laws that prevail in Malaysia, all companies, both public and private companies must register themselves with Suruhanjaya Syarikat Malaysia (SSM), which is the Malaysian regulator, also known as the Companies Commission of Malaysia. The companies are required to submit their financial information to SSM every year.

With the financial information submitted, the regulator not just enhances the supply of corporate information, but also creates a channel wherein the public can analyse the information.

Malaysian Business Reporting System (MBRS)

Malaysian Business Reporting System (MBRS) has been incorporated by Companies Commission of Malaysia (SSM). It is a submission platform for companies incorporated in Malaysia, for submission of financial statements and exemption application, as required under Companies Act 2016.  It is based upon eXtensible Business Reporting Language (XBRL) platform.

Each of the companies registered in must also file their annual returns, within 30 days of the anniversary of its incorporation date. Annual Return gives an overview of a company’s directors, addresses and activities.

The three main components of MBRS submission platform are:-

1.       The XBRL taxonomy

2.       mTool or the preparation tool

3.       mPortal

Businesses and other stakeholders, such as banks, investors and regulators, all benefit from MBRS. This is owing to the enhanced usability of financial statement information as facilitated by XBRL, which enables the stakeholders make sound economic decisions and design policies.

XBRL is a standard of reporting which many advanced countries already use for reporting financial information. Some of the prevalent regulators are:-

1.       Security and Exchange commission (SEC), USA

2.       Her Majesty Revenue and Customs (HMRC), UK

3.       Accounting and Corporate Regulatory Authority (ACRA), Singapore

4.       Australian Securities & Investments Commission (ASIC), Australia

The aforementioned regulators have mandated all companies that are listed publicly (or even private companies in some countries) to essentially use XBRL for reporting their financial information. In Malaysia, SSM is among the recent adopters of XBRL.

In Malaysia, the voluntary reporting phase by using XBRL first started in October 2018. The mandate was designated to be rolled out in phases, and is currently set for companies with financial year/period ended 31 December 2018 at the moment (pending for SSM further announcement).

The key differences in current submissions and submissions via MBRS platform is that the documents are submitted online via MBRS platform than submitting hardcopy of financial statements over the counter. Similarly, the MBRS platform allows companies to make annual return, exemption applications and financial statements via mTool. The need for paper based documentation is hence done away with.

The similarity of MBRS platform with present submission format is that the submissions need to be made by company secretaries.

Implementation of MBRS does pose some challenges for businesses. Let’s take a look at them.

1.       The preparation tool is made based on IFRS taxonomy (localized for MFRS/MPERS and Companies Act 2016 requirements) and a vast majority of information for MBRS financial statements is derived from audited financial statements. The audited financial statements should contain necessary information and disclosure items for filing up the MBRS report.

This requires a preparer to be familiar with accounting and have sufficient technical knowledge of accounting. The challenge is also the first adoption of MBRS report require comparative figures to be populated and businesses may have difficulties in meeting the filing deadline.

2.       A sound technical knowledge of financial reporting is also essential for tagging the elements in MBRS reporting, which are over 8000 in reporting fields (in MFRS/MPERS and Companies Act 2016)..

The factors may call for outsourcing the work and company directors and SSM alike would be very particular about the assurance that the financial statements have been tagged right.

Acc Plus comes across as a preferred choice for filing financial statements, exemption returns and annual statements in compliance with MBRS. We have a well established team that has a good track record in financial reporting and regulatory compliance for over 20 years. Our team of accountants is well versed in Malaysia Accounting Standards and XBRL.