MASB issues new accounting standard on regulatory assets and liabilities

MASB issues new accounting standard on regulatory assets and liabilities

Ellichipuram Umesh

Mon, August 10, 2026 at 5:40 PM GMT+3 2 min read

The Malaysian Accounting Standards Board (MASB) has issued Malaysian Financial Reporting Standards 20(MFRS 20) (Regulatory Assets/Liabilities).

The authority has also issued amendments to the fair value option for investments in associates and joint ventures (Amendments to MFRS 128 Investments in Associates and Joint Ventures).

MASB noted that both pronouncements are verbatim equivalents of the IASB's IFRS 20 and Amendments to IAS 28.

The new MFRS 20 is intended to enhance financial reporting for entities that are subject to a specific type of rate regulation.

It is aimed at helping investors understand more clearly how that rate regulation influences an entity's financial performance, financial position and prospects for future cash flows.

An entity applies MFRS 20 when it is party to a regulatory agreement that gives rise to regulatory assets and regulatory liabilities.

The Standard is founded on the principle that a company recognises compensation for regulatory goods or services in the same period in which those goods or services are supplied.

It is expected to affect companies in sectors such as utilities, energy and transportation.

MFRS 20 becomes effective for annual reporting periods beginning on or after 1 January 2029, with earlier application allowed, and it replaces MFRS 14 Regulatory Deferral Accounts.

Meanwhile, the Amendments to MFRS 128 Investments in Associates and Joint Ventures clarify which entities are eligible to measure investments in associates and joint ventures at fair value through profit or loss in accordance with MFRS 9 Financial Instruments, under the fair value option provided in MFRS 128.

Applying this fair value option has a direct impact on how an entity classifies income and expenses in the statement of profit or loss under MFRS 18 Presentation and Disclosure in Financial Statements.

An entity is required to apply the amendments when it applies MFRS 18, that is, for annual reporting periods beginning on or after 1 January 2027, or earlier if it elects to adopt MFRS 18 ahead of that date.

"MASB issues new accounting standard on regulatory assets and liabilities" was originally created and published by The Accountant, a GlobalData owned brand.