What accounting standards were bypassed by Tabung Haji in 2017?

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Tabung Haji Bypassed Malaysian Financial Reporting Standards in 2017

The Royal Commission of Inquiry (RCI) found that Lembaga Tabung Haji (TH) failed to fully apply Malaysian Financial Reporting Standards (MFRS) in its 2017 financial year. Had these standards been adhered to, TH would have reported a net loss of RM1.4 billion instead of the RM3.4 billion profit initially stated. This indicates that the institution's financial health was already precarious during that period.
Non-Compliance with FRS 140 Standard

A key finding of the RCI report was TH's failure to comply with the FRS 140 standard. This specific standard relates to the accounting treatment for the decline in the fair value of property investments. The RCI report confirmed that TH did not correctly account for decreases in the market value of its property holdings.
Unperformed Impairment Assessments

Furthermore, the RCI report highlighted that TH did not conduct necessary impairment assessments on various investments. This included assessments on investments in associated companies, financing extended to subsidiaries, and fixed income instruments. Such assessments are crucial for accurately reflecting the value of assets in financial statements.
Unreported Deficit and Dividend Income

The RCI's findings corroborated earlier observations by PricewaterhouseCoopers (PwC), which had identified a deficit between assets and liabilities in TH's books since 2014. Additionally, TH recorded dividend income from subsidiaries for the 2017 financial year, even though these dividends had not been paid out to TH. The report also noted that hibah (profit distribution) for 2017 was paid without accounting for the impact of impairments and fair value declines on investments.

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What accounting standards were bypassed by Tabung Haji in 2017?

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