MFRS 101 is a financial reporting standard that has been adopted by many countries around the world. It stands for "Malaysian Financial Reporting Standard 101: Presentation of Financial Statements," and it outlines the requirements for the presentation of financial statements for entities operating in Malaysia.
MFRS 101 is based on the International Financial Reporting Standard (IFRS) for Small and Medium-Sized Entities (SMEs), which is a set of financial reporting standards developed specifically for SMEs. The standard is designed to provide a simple and cost-effective way for SMEs to prepare their financial statements, while still providing relevant and useful information to users of those statements.
One of the key aspects of MFRS 101 is its focus on the concept of materiality. Materiality refers to the idea that only information that is significant enough to affect the decisions of users of financial statements should be included in those statements. This means that entities are not required to disclose every single detail about their operations, but rather should focus on presenting the most important information in a clear and concise manner.
Another important aspect of MFRS 101 is its emphasis on the concept of going concern. This refers to the assumption that an entity will continue to operate for the foreseeable future, and that it has the resources and capabilities to do so. This assumption is important because it affects how an entity's assets and liabilities are valued and presented in the financial statements.
MFRS 101 also includes specific requirements for the presentation of different types of financial statements, such as the statement of financial position (also known as the balance sheet), the statement of comprehensive income (also known as the income statement), and the statement of cash flows. It also includes requirements for the presentation of notes to the financial statements, which provide additional information and context for the statements.
Overall, MFRS 101 is an important financial reporting standard that helps ensure the transparency and consistency of financial reporting for entities operating in Malaysia. It provides a framework for the presentation of financial statements that is both simple and effective, while still providing relevant and useful information to users of those statements.