Iran
| Extent of IFRS application | Status | Additional Information |
|---|---|---|
| IFRS Standards are required for domestic public companies |
|
All listed companies, banks, insurance companies, and other financial institutions are required to use IFRS Standards. |
| IFRS Standards are permitted but not required for domestic public companies | ||
| IFRS Standards are required or permitted for listings by foreign companies | Currently there are no foreign companies whose securities trade on the Tehran Stock Exchange. | |
| The IFRS for SMEs Standard is required or permitted | No. Currently, all SMEs are required to use Iranian National Accounting Standards. | |
| The IFRS for SMEs Standard is under consideration |
|
Yes. |
Organisation
Audit Organisation of Iran (AOI).
Iranian Institute of Certified Accountants (IICA).
Iranian Association of Certified Public Accountants (IACPA).
Role of the organisation
The Audit Organisation of Iran is recognised by law as the body to adopt accounting standards in Iran.
The IICA and the IACPA are professional associations of accountants in Iran.
Website
Email contact
Has the jurisdiction made a public commitment in support of moving towards a single set of high quality global accounting standards?
Yes.
By requiring banks, insurance companies, other financial institutions, and listed companies to apply IFRS Standards, the Audit Organisation of Iran has demonstrated that Iran has made a public commitment to global accounting standards, and to IFRS Standards as those standards.
Has the jurisdiction made a public commitment towards IFRS Standards as that single set of high quality global accounting standards?
Yes.
See above.
What is the jurisdiction's status of adoption?
The AOI requires large listed companies to apply IFRS Standards (with two optional modifications) starting with Iranian year 1395, which is the financial year beginning 20 March 2016 according to the Gregorian calendar.
Other listed companies are permitted, but not required, to adopt IFRS Standards (with two optional modifications) from 1395. Such companies will be required to apply IFRS Standards (with two modifications) from 1396 (that is, financial years beginning March 2017). The Securities and Exchange Organization of Iran (the securities regulator) will announce criteria for identifying large listed companies.
There are approximately 320 companies listed on the Tehran Stock Exchange. In addition, approximately 120 companies trade on the Iran Fara Bourse.
The AOI requires that all banks, insurance companies, and other financial institutions (whether listed or not) to use IFRS Standards from the beginning of Iranian year 1395 (20 March 2016).
Unlisted companies are required to follow Iranian National Standards for the present, but the AOI has indicated a longer-term plan to require IFRS Standards as well.
See statement on the website of the AOI (in Farsi):
Additional comments provided on the adoption status?
If the jurisdiction has NOT made a public statement supporting the move towards a single set of accounting standards and/or towards IFRS Standards as that set of standards, explain the jurisdiction's general position towards the adoption of IFRS Standards in the jurisdiction.
For DOMESTIC companies whose debt or equity securities trade in a public market in the jurisdiction:
Are all or some domestic companies whose securities trade in a public market either required or permitted to use IFRS Standards in their consolidated financial statements?
If YES, are IFRS Standards REQUIRED or PERMITTED?
Does that apply to ALL domestic companies whose securities trade in a public market, or only SOME? If some, which ones?
Are IFRS Standards also required or permitted for more than the consolidated financial statements of companies whose securities trade in a public market?
For instance, are IFRS Standards required or permitted in separate company financial statements of companies whose securities trade in a public market?
For instance, are IFRS Standards required or permitted for companies whose securities do not trade in a public market?
If the jurisdiction currently does NOT require or permit the use of IFRS Standards for domestic companies whose securities trade in a public market, are there any plans to permit or require IFRS Standards for such companies in the future?
For FOREIGN companies whose debt or equity securities trade in a public market in the jurisdiction:
Are all or some foreign companies whose securities trade in a public market either REQUIRED or PERMITTED to use IFRS Standards in their consolidated financial statements?
If YES, are IFRS Standards REQUIRED or PERMITTED in such cases?
Does that apply to ALL foreign companies whose securities trade in a public market, or only SOME? If some, which ones?
Which IFRS Standards are required or permitted for domestic companies?
The auditor's report and/or the basis of presentation footnotes states that financial statements have been prepared in conformity with:
Does the auditor's report and/or the basis of preparation footnote allow for ‘dual reporting’ (conformity with both IFRS Standards and the jurisdiction’s GAAP)?
Are IFRS Standards incorporated into law or regulations?
If yes, how does that process work?
If no, how do IFRS Standards become a requirement in the jurisdiction?
Does the jurisdiction have a formal process for the 'endorsement' or 'adoption' of new or amended IFRS Standards (including Interpretations) in place?
If yes, what is the process?
If no, how do new or amended IFRS Standards become a requirement in the jurisdiction?
Has the jurisdiction eliminated any accounting policy options permitted by IFRS Standards and/or made any modifications to any IFRS Standards?
If yes, what are the changes?
The AOI has made two modifications of IFRS Standards that are optional – that is, companies may use IFRS Standards without the modifications:
- Goodwill is amortised over its useful life but not more than 20 years, and also subject to write-down if impairment is indicated. Under IFRS 3 Business Combinations, the recoverable amount of goodwill must be measured each year and, if it is below the carrying amount, an impairment loss must be recognised.
- Investments in unquoted equity instruments are measured at cost, subject to write-down if impairment is indicated. Under IFRS 9 Financial Instruments, such investments are measured at fair value.
