IFRS Malaysia: Guide for Businesses Expanding Abroad

For Malaysian businesses with serious global ambitions, success isn’t just about market entry or product quality, it’s about speaking the same “financial language” as your international partners and investors. 

That language is International Financial Reporting Standards (IFRS).

In Malaysia, most medium to large entities already follow the Malaysian Financial Reporting Standards (MFRS), which are fully aligned with IFRS. 

This “alignment” means you’re already closer than you think to meeting global financial reporting expectations. So what is IFRS and why should businesses in the international market consider it? Let’s get to it.

What is IFRS?

IFRS is a globally recognised set of accounting standards developed by the International Accounting Standards Board (IASB). 

The goal is to make financial statements consistent, comparable, and transparent across jurisdictions.

“A Malaysian company with branches in Singapore and Germany can use IFRS so investors everywhere compare results on the same terms.”

IFRS eliminates the “apples vs oranges” problem in global finance, helping Malaysian companies compete confidently in the international market without being bogged down by paperwork.

Who Must Implement IFRS in Malaysia?

In Malaysia, IFRS compliance is not optional for certain entities. You must apply IFRS (via the Malaysian Financial Reporting Standards, MFRS) if you are:

• Publicly Listed Companies: All Bursa Malaysia-listed companies must use MFRS, which is fully IFRS-compliant.
  
• Financial Institutions & Banks: Regulated by Bank Negara Malaysia, these must follow MFRS in line with IFRS standards.
  
• Entities other than private entities (for example, those required to report under laws administered by the Securities Commission or Bank Negara) apply MFRS. Private entities may use MPERS or opt for MFRS.
  
• Entities Preparing for IPO: Companies aiming to list locally or abroad need to align with IFRS early to avoid restating financials later.

Note: SMEs without public accountability can opt for MPERS, which is based on IFRS for SMEs but simplified for local use.

Why IFRS Matters for Malaysian Businesses Going Global

For Malaysian companies eyeing international markets, IFRS is more than just an accounting rulebook,  it’s a passport to global credibility. 

1. Easier Access to Global Capital

IFRS makes your business “investor-friendly” on a global scale.

When your financial statements follow a standard recognised in over 140 jurisdictions, international investors and lenders can instantly understand your numbers. 

This familiarity builds confidence, making it easier to secure foreign direct investment (FDI) or international loans.

Example: A Malaysian tech firm seeking Series B funding from a US venture capital firm will find the due diligence process smoother when their reports are already IFRS-compliant.

2. Simplified Financial Comparisons

When overseas partners, suppliers, or clients can interpret your performance without translation, negotiations become faster and more informed. 

It removes the delays and accounting adjustments often needed with differing local standards.

3. Enhanced Transparency and Credibility

IFRS signals professionalism and global readiness.

By following internationally recognised reporting principles, you show that your business is serious about governance, accuracy, and ethical disclosure,  values that multinational partners respect.

4. Reduced Duplication in Multi-Market Reporting

One standard = fewer headaches.

If you operate in several IFRS-adopting countries, you can consolidate financial reports instead of creating separate statements for each jurisdiction. 

This not only saves time and money but also reduces the risk of reporting inconsistencies.

Example: A Malaysian logistics firm with operations in Singapore, Australia, and the UK can prepare one consolidated annual report, avoiding three separate compliance processes.

“IFRS (or an equivalent) is required in many major markets, and 140+ jurisdictions require IFRS for most listed companies”

IFRS in the Malaysian Context

Malaysia has two main reporting frameworks:

• MFRS Framework: mandatory for publicly accountable entities and IFRS-compliant.
• MPERS: for private entities, based on IFRS for SMEs but with local adjustments.

Here’s how they differ:

Disclaimer: This article is for information only and does not constitute legal, tax, or audit advice. Reporting obligations depend on your entity’s status and regulators. Consult your auditor or MASB-registered adviser.

Core IFRS Areas That Impact Malaysian Businesses Going Global

IFRS 10 – Consolidated Financial Statements

If you own subsidiaries in other countries, IFRS 10 explains how to combine all their financials into one clear report. This gives investors and lenders the full picture instead of separate, disconnected accounts.

IAS 21 – Foreign Currency Transactions

For companies dealing in USD, EUR, or other foreign currencies, IAS 21 tells you how to record exchange rate gains and losses. This keeps your books accurate even when currency values fluctuate daily.

IAS 36 – Impairment of Assets

If you have big-ticket assets like machinery, buildings, or patents, IAS 36 requires you to adjust their value when they lose worth. This prevents overestimating your company’s net value.

Read more: Beginner’s Guide to Capital Allowance in Malaysia

IFRS 15 – Revenue Recognition

Whether you’re delivering products or services, IFRS 15 sets the rules for when you can record income. No early revenue booking, only recognise it when obligations are fulfilled.

IFRS 16 – Leases

If you rent offices, warehouses, or long-term equipment, IFRS 16 ensures those lease commitments appear on your balance sheet. It reflects the real liabilities your business carries.

Here’s a real-world example:

A Johor-based electronics manufacturer with sales offices in Singapore and Europe adopted IFRS to standardise its reporting.

Previously, preparing separate financial statements for Malaysia, Singapore, and Germany meant duplicated work and inconsistencies in revenue recognition.

By switching to IFRS-aligned MFRS, the company could issue one set of consolidated statements under IFRS 10 and apply IAS 21 for foreign currency transactions, making it easier for European investors to review performance without additional reconciliations.

IFRS Implementation Steps for Malaysian Businesses

You’re probably looking at all of this and wondering, “where do I start implementing IFRS”, follow these steps and you will be internationally compliant in no time.

1. Educate Your Finance Team

Train your existing finance staff in IFRS concepts, or bring in accountants who have hands-on IFRS experience.

This helps everyone understand the new reporting requirements and avoids costly compliance mistakes. 

Example: A Malaysian exporter sent their CFO to an IFRS workshop before rolling out IFRS-compliant systems,  reducing reporting errors during their first global audit.

Tip: Consider HRD Corp claimable training, where applicable, as some MFRS/IFRS courses are eligible.

2. Upgrade Your Systems

Check that your ERP or accounting software can handle IFRS-specific requirements such as multi-currency reporting, lease accounting, and revenue recognition rules.

Cloud-based platforms with IFRS modules can make this transition smoother. If you’re still on a basic desktop system, migrating early can save months of manual adjustments.

3. Align Subsidiary Reports

If you operate in multiple countries, standardise reporting templates, timelines, and processes so that consolidation (IFRS 10) becomes smooth.

This avoids mismatches in data and speeds up financial statement preparation especially when timezones are a huge factor.

Example: A Malaysian manufacturing firm with plants in Vietnam and the Philippines implemented a shared reporting calendar to sync financial closings.

4. Work with IFRS Specialists

By far the easiest way to do it. Consult with IFRS-trained auditors or advisory firms to review your setup before your first official IFRS reporting cycle.

Early guidance can prevent non-compliance penalties and build trust with overseas investors.

Don’t skimp out on this! Even one advisory session can help spot weaknesses in your current reporting framework.

Read more: New to Business? Here’s How to Register a Company in Malaysia

Common IFRS Challenges Local Business Owners Will Face

Even with its clear benefits, adopting IFRS isn’t without hurdles, especially for Malaysian SMEs moving into international markets. Key challenges include:

• Knowledge Gaps in IFRS Standards: Many local finance teams are trained in MPERS or legacy standards, so IFRS-specific rules may feel unfamiliar at first.
• System & Process Overhauls: Existing accounting or ERP systems may not fully support IFRS requirements, especially for multi-currency and lease reporting.
• Higher Initial Costs: Training, consultancy, and software upgrades can add to the initial implementation budget.
• Coordination Across Borders: Aligning subsidiary reports from multiple countries can be time-consuming if processes aren’t standardised.
• Change Management Resistance: Some teams may prefer “the old way” of reporting, slowing down adoption.

How Malaysian Businesses Can Overcome IFRS Challenges

• Invest in Targeted IFRS Training: Enrol your finance staff in IFRS-specific courses, or hire consultants with proven track records.
• Audit Your Existing Systems: Review whether your accounting software supports IFRS requirements for consolidation, revenue recognition, and leases.
• Phase the Implementation: Start with critical areas like revenue recognition (IFRS 15) and foreign currency (IAS 21) before expanding to full compliance.
• Standardise Templates Across Subsidiaries: Use uniform reporting formats to simplify consolidation and comparison.
• Secure Leadership Buy-In Early: Involve management in the decision-making process to minimise resistance and ensure resource allocation.

Conclusion: IFRS is the first Step to go International

Adopting IFRS is a strategic and necessary move for Malaysian businesses aiming to compete on the global stage.

By aligning with a universally recognised framework, you make your financial reports transparent, credible, and easily comparable across borders.

But compliance can only take you so far, which is why corporate visibility and investor confidence is paramount.

At Press, we are a Digital PR agency that helps businesses communicate financial credibility, enhance stakeholder trust, and position their brand for international expansion.

Contact us, and let’s take your brand go from local underdog to internationally recognised.