KUALA LUMPUR: Ernst & Young (EY) has launched a new guide, Example Bhd — Illustrative Annual Financial Statements 2010, to assist listed companies with the many significant changes made to the Financial Reporting Standards (FRS).

Filled with illustrative annual financial statements, Example Bhd incorporates the new FRS that is applicable for financial statements beginning Jan 1. The guide is available on its website for download.

Its technical partner Stephen Oong said the new FRS have significant effects on public-listed companies' financial statements, in terms of presentation, recognition, measurements and disclosure requirements.

"The complexities of the FRS should not be underestimated and companies applying the new, revised and improved FRS and Interpretations in the preparation of financial statements need to be equipped with the knowledge to apply the Standards and Interpretations appropriately," said Oong.

He said there were about 40 revisions, amendments and improvements in the new FRS. For example, the application of FRS 129 and FRS 7 have significantly changed how financial instruments have been accounted for and disclosed in financial statements.

"The disclosure requirements under FRS 7 are extensive and exhaustive while FRS 139 requires more financial instruments to be measured at fair values, hence making the income statements much more volatile," said Oong.

He said the guide had been eagerly awaited and anticipated by many of EY's listed clients. "Given the sheer volume of significant changes, we believe that preparers of financial statements will find the guide a very timely and useful publication," he added. Oong also said the new FRS required additional disclosures and the usage of fair values and valuation bases.

"The numbers, classification and presentation will change as the standards relevant to a reporting entity are more complex, requiring the application of the estimation and judgment processes to a greater extent," he said.

EY will be organising a seminar in July to update participants on the new FRS, with details to be announced soon on its website.