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Iran

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Financial reporting framework in Iran

Currently, Iranian companies have to apply Iran GAAP. However, in September 2011, the General Assembly of the Iranian Audit Organisation (the Iranian standard-setter under the control of the Iranian Ministry of Finance) approved a plan that Iranian listed companies identified by the Iranian Securities and Exchange Organisation (SEO) and all banks would have to report under IFRS from a given date on. This was ratified by the Iranian Minister of Finance and Economics in June 2012.

The SEO has established an IFRS strategy committee that includes representatives from the Iranian Association of Certified Public Accountants (IACPA), the Iranian Audit Organisation, the Iranian Institute of Certified Accountants (IICA), the Iran National Tax Affairs (INTA), the Ministry of Finance and Economics, as well as selected external experts. The SEO has set up a dedicated website that documents all decisions and any progress as well as offers help and information for affected companies: http://ifrs.seo.ir/ (available in the Farsi language only).

Among the key details to be mentioned are the following facts:

  • In January 2014, the SEO issued a circular stating that all listed companies can voluntarily apply IFRSs in their consolidated financial statements, however, the financial statement of the ultimate parent must be presented in accordance with Iran GAAP.
  • The IFRS road map of the SEO states that from fiscal years beginning on or after 21 March 2016 all banks, insurance companies, listed financial institutes, and all listed companies with registered capital of more than 10 trillion Iranian rial must prepare two sets of financial statements - one in accordance with IFRS and one in accordance with Iran GAAP. Both sets of financial statements must be audited. All other listed companies are expected to present IFRS financial statements in 2018, however, earlier adoption is permitted.
  • The road map does not cover non-listed companies.

 

Note
Iran remains subject to certain economic sanctions and export controls, including comprehensive US sanctions which prohibit US Persons from engaging in most transactions with Iran, and from facilitating such transactions by non US Persons. Individuals and entities contemplating doing business in or related to Iran should consult with legal counsel to ensure compliance with applicable sanctions and export controls.

 

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