Who must use MFRS, and who can use MPERS?
A private company that is not required to file financial statements under Securities Commission or Bank Negara law, and is not a subsidiary or associate of, or jointly controlled by, an entity that is, is a private entity and may use MPERS or full MFRS. Other entities must use MFRS.
Who is a private entity (MASB's definition)
A private company, as defined in section 2 of the Companies Act 2016, that:
- is not itself required to prepare or lodge financial statements under any law administered by the Securities Commission Malaysia (SC) or Bank Negara Malaysia (BNM); and
- is not a subsidiary or associate of, or jointly controlled by, an entity that is required to do so.
A private company that is, or belongs to the group of, a management company under the Interest Schemes Act 2016 is not a private entity.
May use MPERS or MFRS
- A private entity may apply MPERS or may choose full MFRS
- A private company that is a subsidiary of a parent listed outside Malaysia is still a private entity, according to MASB's FAQ
Must use MFRS
- Companies that are not private entities, such as listed companies and entities regulated by the SC or BNM (for example banks, insurers and capital market licence holders)
- Subsidiaries, associates and joint arrangements of those entities
An entity can be treated as a private entity only for periods throughout which it meets the definition. If your company later becomes part of a group headed by an SC- or BNM-regulated entity, review which framework applies for that period. A foreign-owned company can use MPERS locally unless a regulator or financing arrangement requires otherwise.
Read MASB's Implementation of MPERS FAQ or ask your accountant for your exact case.
Legal basis
- Companies Act 2016, s.248
- MASB Implementation of MPERS FAQ (definition of private entity)
Sources
Applies to 2026 · Last reviewed 29 October 2026
General information for business owners, not legal, tax or professional advice. Rules change, so check the sources or ask a licensed professional before you act.
Related questions
- How long must a Malaysian company keep its accounting records?A company must keep accounting records for seven years after the transactions they record were completed. For tax, documents must be kept for seven years from the end of the relevant year of assessment. Use whichever period ends later.
- How soon must transactions be recorded in the books?Under section 245 of the Companies Act 2016, entries must be made in the accounting records within 60 days after the transaction is completed. Leaving the books for a full year-end rush is therefore not compliant.
- What do a company's financial statements contain?A company's financial statements normally include a statement of financial position, a statement of profit or loss and other comprehensive income, a statement of changes in equity, a statement of cash flows and notes with accounting policies. The set must give a true and fair view.
- Who prepares and approves a company's financial statements?Directors are legally responsible for the financial statements. An in-house accountant or external firm often drafts them, but the board approves them by resolution and signs a directors' statement. The statements are then presented to the members.
- What is the difference between MPERS and MFRS?MFRS is the full set of Malaysian standards, aligned with IFRS, used by listed and regulated entities. MPERS is a shorter, simplified framework based on the IFRS for SMEs standard, designed for private entities. Both give a true and fair view; MPERS has fewer disclosures and simpler rules.