REHDA sets up task force on IFRIC 15

KUALA LUMPUR: The Real Estate and Housing Developers' Association (REHDA) of Malaysia has set up a task force to address issues arising from Malaysia's adoption of the interpretation issued by the International Financial
Reporting Interpretations Committee (IFRIC) 15.

Its president Datuk Ng Seing Liong said there were many reports and articles in the media highlighting the concerns of the investment and business community on Malaysia's adoption of the IFRIC 15, effective July 1.

"The task force, assisted by accounting and legal experts, will conduct research to ensure the interpretation is correctly applied in the Malaysian context and make the best recommendations to the relevant authorities.
"Our in-depth research into this matter also includes case studies on countries which have implemented the IFRIC 15 whilst still adopting the progressive method to recognise property development income," he said in a
statement here on June 11.

According to Ng, the application of the IFRIC 15 directly affects public-listed property companies. He highlighted, the general perception is that, the IFRIC 15 only permits property development income to be recognised on a completion basis.

"This is a misconception which has created much confusion and concern. The business community's concerns, are further compounded by the fact, that the Inland Revenue Board recognises property development income only using the progressive basis method.

"We made representations and have had discussions with the Malaysian Accounting Standards Board, the Malaysian Institution of Accountants and Securities Commission on the matter.

"We are confident the implementation issues surrounding the adoption of the IFRIC 15 can be resolved in a manner which ensures property development companies, particularly those public-listed, are not adversely affected," he explained.

Ng also stated that REHDA is of the view that Malaysia's legal and regulatory framework, as well as the manner in which property business is conducted, provide clear opportunities for property development income to be
recognised on a progressive basis, as allowed by the IFRIC 15. -- Bernama