The Saudi Organization for Certified Public Accountants (SOCPA) has approved an IFRS transition plan. The plan involves converging their national standards with full IFRSs and have all non-publicly accountable entities be required to report under the IFRSs for SMEs.
Currently, all banks and insurance companies listed on the Saudi Stock Exchange must use IFRSs. All other listed entities in the Kingdom of Saudi Arabia, as well as unlisted entities, must follow accounting standards generally accepted in the Kingdom of Saudi Arabia as issued by the SOCPA.
Under the transition plan, listed entities will report using the “national standards that are closely converged with full IFRSs.” Additionally, unlisted entities will be required to report under IFRS for SMEs as adopted in Saudi Arabia.
Key points during Transition for Listed and Un-Listed companies
- Unlisted companies have an option to early adopt along with listed companies.
- Unlisted companies not acting in a fiduciary capacity can choose either to apply IFRS for SMEs as endorsed in Kingdom of Saudi Arabia or a full set of IFRS.
- Based on the transition date decided by SOCPA, listed companies were required to publish their 1st Quarter financial statements for FY17 in accordance with IFRS. As of 31 December 2016, there were 176 listed companies on Tadawul.