A few differences that almost all of the companies following SOCPA might have are the

following:

 Presentation of financial statements in accordance with IFRS is definitely the biggest

difference all companies converting to IFRS will have to face. The presentation
guidance is included in the IFRS 1 first time adoption of IFRS. That includes 3 years
comparative statement of financial position. For example 31 December 2018, 31
December 2017 and 1 January 2017. The other statements are similar to SOCPA
standards having two years comparatives, except for the statement of other
comprehensive income which is normally not presented under SOCPA and may
need to be included in IFRS financial statements. In the notes to the financial
statements, a reconciliation of equity and income statements from the date of
transition will need to be disclosed.

 Statement of compliance that the financial statements have been prepared in

accordance with International Financial Reporting Standards (IFRS).

 Revenue recognition, under IFRS 15. This impacts the businesses that have
complex revenue recognition, and deliver goods and services with risks being
transferred and performance obligations being settled. This might include contracts
that have multiple stages and payment terms involved. Simple consultancy and
grocery stores may have same revenue recognition as in SOCPA.

 End of service benefits, under IAS 19, is the next major difference. End of Service
Benefit provision includes three main assumptions:

1. Salary increase rate per annum (for example, a letter approved by

management for the salary increase)
2. Average expected future years of service
3. Discount rate % per annum. (According to IFRS the discount rate used is
determined by reference to market yields at the end of the reporting period on
high-quality corporate bonds, or where there is no deep market in such
bonds, by reference to market yields on government bonds i.e. High-Quality
Market Corporate Bond Spot rate).
 
 Intangible assets are categorised separately. The software is included in this
category if it is not an integral part of the hardware. For example, an accounting
software is intangible assets. 

 Significant accounting policies have to be in greater depth. Such as these additional

notes included in significant additional accounting policies:
o New Standards, Amendment to Standards and Interpretations
o Financial instruments 
o Capital management

Comments

1.

FarhanNovember 26, 2018 at 1:09 AM

Additional important line items that are treated differently by Full version IFRS include but are
not limited to:

Property Plant and Equipment-

Review of useful life and estimated salvage value at least annually.
Depreciation of minimum value assets, such as prayer rugs should be treated in accordance with
the capitalization policy of the company. A capitalization policy could be like to expense out any
fixed asset with value lower than SAR 500.

Employees End of Service Benefits provision-

The Company is required to account for its defined benefit obligation computed based on
actuarial valuation. An acceptable IAS 19 actuarial report can be obtained from
info@naumanassociates.com
Note* IFRS for SME: As per section 28.18 of IFRS for SMEs, actuarial valuation is required of
post-retirement benefits, given the cost of actuarial valuation is not significant for the company.
GOSI expenses amount should be disclosed separately in the notes to the financial statements
because they fall under IAS 19 defined contribution plans.