In Malaysia, all companies (both public and private) need to register themselves with the Malaysian Regulator, Suruhanjaya Syarikat Malaysia (SSM), and these companies have to submit their financial information to SSM once every year. The regulator’s role is to enhance and promote the supply of corporate information and to create and develop a facility whereby the public can analyse the received corporate information.
Until now, companies needed to submit this information in printed form over-the-counter to the regulator. But starting November 2018, SSM has mandated the submission of specific reports digitally in XBRL. This mandate would help SSM analyse the reported information instantly, and also help investors and the Malay people at large.
1. What is XBRL and its benefits:
XBRL stands for eXtensible Business Reporting Language and is a global, unified standard for the creation and sharing of business information. It increases transparency and ensures easy accessibility of financial information. The direct beneficiaries of using this standard are regulators and the investor community.
Few countries currently use the XBRL standard of reporting for reporting financial information. Regulators including the SEC (Securities and Exchange Commission) in the USA, HMRC (Her Majesty’s Revenue and Customs) in the UK, ACRA (Accounting and Corporate Regulatory Authority) in Singapore, and CIPC (Companies and Intellectual Property Commission) in South Africa have mandated registered or publicly listed companies to report their financial information in XBRL. SSM is one of the latest adopters of XBRL.
The voluntary XBRL reporting phase started in October 2018 and the mandate, which will be rolled out in phases, takes effect in November 2018. The first phase is mandated for companies registered in Kuala Lumpur and Selangor. If a company has reporting obligations that fall after the rollout of the mandate, their reports should be in XBRL, irrespective of their accounting period.
Banking, financial and insurance institutions regulated under Bank Negara Malaysia are currently exempted from MBRS filing. Once rolled out for all companies registered in Malaysia and companies not exempted from reporting, the following reports have to be submitted in XBRL to SSM:
a) Annual Returns (AR)
b) Financial Statements and Reports (FS)
c) Exemption Applications (EA) related to the FS and AR
a) Annual Returns
All registered companies in Malaysia need to file their Annual Returns as per the Companies Act 2016. Annual Return is the summary of the profile of a company, and it gives an overview of the company’s business activities, shareholding patterns, directors and addresses. Any company registered with SSM Malaysia has to submit its Annual Return no later than 30 days from the anniversary of its incorporation date.
b) Unaudited Financial Reports
Companies qualifying for audit exemption can file a full set of unaudited financial statements in XBRL format along with a statement that the company is qualified for audit exemption and that the shareholders do not request for an audit that particular year. Unaudited financial reports should be filed within 30 days of its circulation.
c) Exemption Application
All registered companies can file requisitions for specific exemptions regarding the filing of annual reports and financial statements in compliance with Companies Act 2016.
2. How to generate and submit the XBRL reports:
SSM provided a tool (MBRS Preparation tool or mTool) to prepare the XBRL reports. The reports can then be submitted through the MBRS Portal (mPOrtal).
In order to use the tool, preparers should know financial reporting standards and also the taxonomies that are available in XBRL that relate to each financial reporting standard. More information on each of these components needed for reporting is given below:
a) XBRL Taxonomy (SSMxT):
This includes financial and non-financial reporting elements that are part of the reports to be filed. The taxonomy is primarily based on:
• Malaysian Private Entities Reporting Standards (MPERS)
• Malaysian Financial Reporting Standards (MFRS) for public companies.
b) MBRS Tool:
The tool is an Excel-based utility that allows users to generate financial statements, annual returns and exemption applications in XBRL using the latest SSM taxonomy.
c) MBRS Portal:
The portal is a submission platform that lets users file online the XBRL reports generated by the tool, track the submission status, download required templates, use digital signatures, utilise payment facilities, and more.
In a nutshell, users must select the appropriate SSM XBRL taxonomy, generate output in XBRL using the M-tool, and submit the reports through the MBRS portal.
3. Support for conversion of Financial statements in XBRL for submission to SSM
DataTracks has over 13 years of experience in reporting financial statements for registered companies and have prepared more than 160,000 compliance reports for clients all over the world, including in the US, the UK, Singapore, India, South Africa and the EU. DataTracks is part of the International XBRL consortium and has extensive knowledge in the preparation and validation of XBRL reports. You may reach our team at the contact address provided below for any information or support you need on the Malaysia XBRL filing requirements.