eKTP 49

Main changes on MPERS
- in terms of assets
Part 1 of 3


Main changes on MPERS - in term of assets as follows:


1. Inventories

1.1 Measures at lower of cost and estimated selling price less costs to complete and sell

  • Reference: MPERS S13.4

1.2 Cost formulas: FIFO or weighted average (no more LIFO)

  • Reference: MPERS S13.8


2. Property, plant and equipment (PPE)

2.1 Applied on “components approach”

  • Components approach means major components of an item of PPE have significantly different patterns of consumption of economic benefits, an entity shall allocate the initial cost of the asset to its major components and depreciate each such component separately over its useful life.

  • Reference: MPERS S17.6

2.2 Initial measurement:

i.  No enhancement principle
ii. Cost on significant replacement is a new or new component of an item of PPE.

  • Reference: MPERS S17.7

2.3 Subsequent measurement:

i.  Cost; or
ii. Revaluation model

  • Reference: MPERS S17.15


3. Intangible assets other than goodwill

3.1  To apply recognition criteria and to satisfy probability recognition criteria.

  • Reference: MPERS S18.4

3.2  The followings are to be recognised as expense:

i.  Expenditure on all research and development expenditure
ii. All internally generated intellectual property

  • Reference: MPERS S18.14, S18.15

3.3 Amortisation is based on:

i.  Finite useful life; or
ii. Not exceed 10 years if useful life cannot be reliably estimated.

  • Reference: MPERS S18.19, S20

4. Investment property

4.1  Subsequent measurement:

i.  Fair value through profit or loss

  • If fair value can be measured reliably without undue cost or effort

  • If fair value is subsequently no longer available without undue cost or effort, account as PPE until a reliable measure of fair value becomes available

  • Reference: MPERS S16.7

ii. Depreciated cost mode

  • Same measurement as property, plant and equipment

  • Reference: MPERS S16.8

5. Impairment of Assets (Other than Financial Assets)

5.1  Test of impairment

  • Is required at each reporting date only if there is any indication of impairment

  • Reference: MPERS S27

Please refer to the following link for further details:

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