Qualifying Criteria For Audit Exemption Part 2 of 3

01eKTP 41

SSM Practice Directive No. 3/2017 – Qualifying Criteria For Audit Exemption For Certain Categories of Private Companies (Part 2).
 

02Qualifying Criteria for Audit Exemption

Except dormant company, there are another 2 categories of private companies which will be qualified for audit exemption. They are as follows:

1. Zero-Revenue Companies if it:does not have any revenue during the current financial year and in the immediate past two financial years;total assets in the current and immediate past two financial years’ statement of financial position does not exceed RM300,000.take effect for:financial period commencing on or after 1 January 2018
   

Zero-Revenue Companies if it:

• does not have any revenue during the current financial year and in the immediate past two financial years;
• total assets in the current and immediate past two financial years’ statement of financial position does not exceed RM300,000.
• take effect for:financial period commencing on or after 1 January 2018
  

take effect for:

• financial period commencing on or after 1 January 2018
  

1. Threshold-Qualified Companies if it:has revenue not exceeding RM100,000 during the current and immediate past two financial years;total assets in the current and immediate past two financial years’ statement of financial position does not exceed RM300,000;has not more than 5 full time employees at the end of its current and immediate past two financial years.Full time employee means paid worker (including local, foreign, contract workers and workers undergoing probationary period) work not less than 6 hours a day for at least 20 days a month or work at least 120 hours a month but excluding:a director who is also working as a full time employee;a shareholder who is also working as a full time employee; ora family members or friends who are unpaid or receiving irregular wageswhile working in the company.
   

Threshold-Qualified Companies if it:

• has revenue not exceeding RM100,000 during the current and immediate past two financial years;
• total assets in the current and immediate past two financial years’ statement of financial position does not exceed RM300,000;
• has not more than 5 full time employees at the end of its current and immediate past two financial years.
• Full time employee means paid worker (including local, foreign, contract workers and workers undergoing probationary period) work not less than 6 hours a day for at least 20 days a month or work at least 120 hours a month but excluding:a director who is also working as a full time employee;a shareholder who is also working as a full time employee; ora family members or friends who are unpaid or receiving irregular wageswhile working in the company.
  

Full time employee means paid worker (including local, foreign, contract workers and workers undergoing probationary period) work not less than 6 hours a day for at least 20 days a month or work at least 120 hours a month but excluding:

• a director who is also working as a full time employee;
• a shareholder who is also working as a full time employee; or
• a family members or friends who are unpaid or receiving irregular wages
• while working in the company.
  

1. Take effect for:financial period commencing on or after 1 July 2018

Take effect for:

• financial period commencing on or after 1 July 2018

• Total revenue and total assets would be determined by the applicable accounting standards and states as the total revenue or total assets in the financial statements of the company for each relevant financial years but revenue excluding:
• credit entries for reversal of accounting entries arising from earlier entries;
• accounting entries related to taxation;
• reversal of provisions made earlier
• gain on derecognition of property, plant, equipment and investment property.