The Regulation of Financial Reporting: IC 15 and Revenue Recognition for Malaysian Property Developers
Hashanah Ismail

Abstract
This paper discusses the proposed IFRIC15 in the context of Malaysia’s financial reporting convergence journey for companies in the property development sector. The deadline for full convergence was January 1, 2012. However, the road to convergence may not be fully realized with respect to property developers, in particular, as a result of the proposed new way of accounting for revenue recognition under IFRIC15. Based on data obtained from the annual reports of property developers, the study finds that revenue recognition policy disclosed in the annual reports of 113 property companies showed only 2 out of 133 companies have adopted the proposed method in IFRIC15. In addition the study sought the views of both preparers and auditors on the impact of IFRIC15. Both groups are of the view that the spirit of IFRIC15 is not aligned to current Malaysian business practice and compliance will reduce the fair presentation of business revenue from property development. Hence whilst convergence to one set of global standards for financial reporting can enhance the quality of financial reports of Malaysian companies it has to be tempered to suit local business models. The paper contributes to the current debate on convergence to IFRS and assessment of the benefits of convergence.

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