Third phase of review of IFRSs in Saudi Arabia includes decision to adopt IFRS 9 without modifications
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 plan | Standard | modifications? |
|---|---|---|
| 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).
