Possible XBRL Validation Errors for Unaudited Accounts in Malaysia for Filing With SSM

The Companies Act 2016, subsection 267 (1), requires every Malaysian private company to appoint an auditor to audit its financial statements for each financial year. However, as per subsection 267(2) of the Companies Act 2016, the registrar may exempt certain private companies from appointing an auditor based on the qualifying criteria and conditions in Practice Directive No. 3 of 2017. The categories of private companies that qualify for audit exemption include:-

• Dormant companies
• Zero-revenue companies
• Threshold-qualified companies

Any companies mentioned above attempting to be exempted from audit must lodge their unaudited financial statements with the registrar within 30 days after circulation. Companies can make validation errors for unaudited accounts while filing their financial statements with SSM. 

Read on to find out these possible XBRL validation errors while filing with SSM: 

XBRL Validation Errors for Dormant Companies

Dormant companies do not carry on business and incur no accounting transactions in the financial year.

If,

• The status of the company is “Private Company”,
• Disclosure of financial statements audit status is “Unaudited”,
• The description of the audit exemption category is “Dormant Company”,
• Disclosure of financial statements prepared for current submission is “Subsequent preparation of financial statements”, 

then the company’s current financial year start date should be equal to or more than 1st September 2017. Validation errors may occur when there is a mistake in any of these elements. 

XBRL Validation Errors for Zero-Revenue Companies

A zero-revenue company is qualified for exemption if it has no revenue during the current or past two financial years.

If, 

• The status of the company is “Private Company”,
• Disclosure of financial statements audit status is “Unaudited”,
• The description of the audit exemption category is “Zero-Revenue Company”,
• Disclosure of financial statements prepared for current submission is “Subsequent preparation of financial statements”, 

then, it is mandatory to report “Assets”, which should be less than or equal to “RM 300,000”. 

Additionally, if the Company’s current financial year start date is “Equal to or more than 1st January 2018”, then it is mandatory to report “Revenue”, which should be equal to “Zero”. Any mistakes in these elements can cause validation errors. 

XBRL Validation Errors for Threshold Qualified Companies

A threshold-qualified company can get exempted from audit if its revenue does not exceed RM 100,000 during the current and past two financial years. 

If, 

• The status of the company is “Private Company”,
• Disclosure of financial statements audit status is “Unaudited”,
• The description of the audit exemption category is “Threshold-Qualified Company”,
• Disclosure of financial statements prepared for current submission is “Subsequent preparation of financial statements”, 
• The company’s current financial year start date is “Equal to or more than 1st July 2018”,

then, it is mandatory to report “Revenue”, which should be less than or equal to “RM 100,000”. It also needs to report “Assets”, which should be less than or equal to “RM 300,000”. Furthermore, it must report “Number of employees”, which should be less than or equal to “5”. Any mistakes in these elements can cause validation errors. 

The Way Ahead

Possible errors in the unaudited accounts can lead to a wastage of time, cost, and effort. Therefore, it is important to prepare error-free XBRL reports before filing with SSM. Enter DataTracks…

With 17+ years of experience, the dedicated team at DataTracks can help you prepare compliant XBRL or MBRS reports with high accuracy and reliability. Get in touch with a DataTracks expert TODAY and make your way towards hassle-free financial reporting.