Preheat oven to 350° and grease 2 (9 inch) round cake pans. Line with parchment paper. Grease and flour parchment paper. Set aside.

Allow eggs whites to sit out at room temperature for 30 minutes before using.

In a small bowl, mix milk and coconut extract together. Set aside.

In a medium bowl, beat butter until creamy. Add sugar. Mix until light and fluffy. Add flour and baking powder, into the butter mixture, alternating with the milk and coconut mixture. Set aside.

Beat egg whites until stiff peaks form. Fold gently into cake batter. Pour into prepared pans. Spread with spatula to cover pans completely with batter.

Bake at 350° for approximately 30 minutes or until wooden tooth pick inserted in the center comes out clean. Place on cooling rack for 10 minutes then removed from pans, set cakes on cooling rack and discard parchment paper.

For the Frosting: In a medium-size saucepan, whisk the flour into the milk until smooth. Place over medium heat and, stirring constantly, cook until the mixture becomes very thick and begins to bubble, 10-15 minutes. Cover with waxed paper placed directly on the surface and cool to room temperature, about 30 minutes.

In a large bowl, on the medium high speed of an electric mixer, beat the butter for 3 minutes, until smooth and creamy. Gradually add the sugar, beating continuously for 3 minutes until fluffy. Add the coconut and beat well.

Add the cooled milk mixture, and continue to beat on the medium high speed for 5 minutes, until very smooth and noticeably whiter in color. Cover and refrigerate for 15- 20 minutes. Use immediately!

Toast coconut flakes in oven for 7 minutes. Garnish with toasted coconut flakes.