eKTP 50

Main changes on MPERS
- in term of financial instrument
Part 2 of 3


Main changes on MPERS - in term of financial instrument

Financial instrument is the major differences between PERS and MPERS. Financial instrument is referring to financial assets and financial liabilities. There are 2 sections under MPERS to deal with recognising, de-recognising, measuring and disclosing of financial instruments:

1. Section 11 Basic financial instruments

2. Section 12 Other financial instruments issues

Section 11 is more relevant to all entities and is applicable to basic financial instruments. Section 12 applies to other, more complex financial instruments and transactions.

Thus, the followings are the summary of Section 11 of MPERS:



An accounting policy choice is provided for private entities to apply: 

i.  The requirements of Sections 11 in full; or
ii. The recognition and measurement requirements of MFRS 139 

  • Reference: MPERS S11.2


2. MEAsurement

2.1 Initial measurement

  • Initially, at the transaction price (including transaction costs)

  • Reference: MPERS S11.13

2.2 Subsequent measurement

i. Debts instruments

  • Measured at amortised cost using the effective interest method

  • Reference: MPERS S11.14(a)

ii. Commitments to receive a loan

  • Measured at cost less impairment

  • Reference: MPERS S11.14(b)

iii. Investments in non-convertible preference shares and non-puttable ordinary or preference shares

  • Measured at fair value through profit or loss if fair value can be measured reliably.

  • All other such investments shall be measured at cost less impairment

  • Reference: MPERS SS11.14(c)

iv. Financial assets measured at cost or amortised cost

  • Impairment test at the end of each reporting period

  • Reference: MPERS S11.21


3. Derecognition

i. Derecognition of financial assets, when:

a. The contractual rights to cash flows expire or are settled
b. The entity transfers substantially the risks and rewards of ownership
c. If there is a continuing involvement, the transfer of control of the asset to another party

  • Reference: MPERS S11.33

    ii. Derecognition of financial liabilities is based on a legal discharge

  • Reference: MPERS S11.36


Please refer to the following link for further details:

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