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Third phase of review of IFRSs in Saudi Arabia includes decision to adopt IFRS 9 without modifications

  • Saudi Arabia Image

13 May 2016

In preparation for IFRS adoption in the Kingdom of Saudi Arabia from 2017, the Saudi Organization for Certified Public Accountants (SOCPA) has approved an IFRS transition plan for developing "national standards that are closely converged with full IFRSs". According to the plan, the SOCPA has now reviewed another twelve IASB pronouncements (including the financial instruments standards) plus the corresponding sections of the IFRS for SMEs.

The SOCPA is currently working with the IFRS requirements extant at 31 December 2014. The modifications the SOCPA makes (if any) generally regard alternatives or options allowed by the IASB standards, additional disclosures, or Saudi specific factors (for instance replacing in IAS 41 all examples that are contradictory to Shariah (pigs, vines) with more suitable examples (cattle, olive trees)). The IFRS Foundation will review the magnitude of the modifications made after the completion of the whole project and will then decide on the status of Saudi adoption of IFRSs.

The standards reviewed by the SOCPA in the third phase are the following:

Group according to transition planStandardmodifications?
Non-current assets II IAS 40 Investment Property yes
IAS 36 Impairment of Assets no
IAS 41 Agriculture yes
IFRS 5 Non-current Assets Held for Sale and Discontinued Operations no
IFRS 13 Fair Value Measurement no
Financial instruments IAS 32 Financial Instruments: Presentation yes
IFRS 7 Financial Instruments: Disclosure yes
IFRS 9 Financial Instruments no
IFRIC 2 Members’ Shares in Co-operative Entities and Similar Instruments no
IFRIC 16 Hedges of Net Investment in a Foreign Operation no
IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments no
First-time adoption IFRS 1 First-time Adoption of International Financial Reporting Standards yes
The sections in the IFRS for SMEs that relate to the standards in the third stage of the transition project no

The newest issue of the SOCPA's newsletter مجلة المحاسبون ("Journal of Accountants") details the changes the SOCPA decided to make. Please click to access the newsletter on the SOCPA website and refer to pages 16-24 (bilingual table).

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