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Saudi Arabia to require use of IFRS

Standards in 2017 and IFRS for
SMEs in 2018
IFRS Standards will be the financial
reporting framework for all listed
companies in Saudi Arabia starting in
2017, and the IFRS for SMEs will be
the reporting framework for unlisted
companies starting in 2018.
Adoption of IFRS Standards is part of
a 'Project for Transition to
International Accounting and Auditing
Standards' undertaken by the Saudi
Organization for Certified Public
Accountants (SOCPA), which is the
Saudi Arabian national standard-setter.
Currently, the Saudi Arabian Monetary
Authority (which is the Saudi Arabian
central bank) requires banks and
insurance companies in Saudi Arabia
(both listed and unlisted) to report
using IFRS Standards

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Saudi
Arabia Is
About To
Adopt International Accounting
Standards
Under the current timetable, all
173
listed companies
will have to
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adopt IFRS for financial periods
beginning on or after January 1,
2017. Other, non-listed
companies have an extra year to
get into line. The new accounting
standards ought to give more
confidence to international and
local investors alike and make it
easier to judge the performance
of Saudi companies compared to
their international peers. At a
time when the country is
planning its most significant
ever IPO, of oil behemoth Saudi
Aramco, such reforms are
particularly important.

SOCPA: Main objective is to

apply IFRS by the end of 2016
in Saudi Arabia
Saudi Arabia has decided to move
towards the IFRS and they will be
applied in early 2017. All
companies trading in the market
must apply the IFRS. The GAAP is
based on rules but the IFRS is
based on principles. The two
systems have major differences.
Since the IFRS is now becoming
accepted in more than 120
countries, Saudi Arabia has
decided to move towards the
International Financial Reporting
Standards in order to be
compatible with other countries
worldwide.

The Saudi Organization for Certified

Public Accountants (SOCPA) has issued a
press release announcing that listed
entities in Saudi Arabia will prepare IFRS
financial statements beginning 1 January
2017. Currently, all listed companies in
the Kingdom of Saudi Arabia that are not
banks or insurance companies must follow
accounting standards generally accepted in
the Kingdom of Saudi Arabia as issued by
the SOCPA.