Saudi Arabia

Extent of IFRS application | Status | Additional Information |
---|---|---|
IFRS Standards are required for domestic public companies |
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IFRS Standards are required for all listed companies, banks, and insurance companies. |
IFRS Standards are permitted but not required for domestic public companies | ||
IFRS Standards are required or permitted for listings by foreign companies | There are no foreign companies whose shares are publicly traded in Saudi Arabia. | |
The IFRS for SMEs Standard is required or permitted |
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Permitted (adoption is in process). |
The IFRS for SMEs Standard is under consideration |
Organisation
Role of the organisation
Email contact
Has the jurisdiction made a public commitment in support of moving towards a single set of high quality global accounting standards?
Has the jurisdiction made a public commitment towards IFRS Standards as that single set of high quality global accounting standards?
What is the jurisdiction's status of adoption?
IFRS Standards are required for all banks, insurance companies, and listed companies, as follows:
- The Saudi Arabian Monetary Authority (SAMA, which is the Saudi Arabian central bank) requires banks and insurance companies in Saudi Arabia to report under IFRS Standards.
- SOCPA standards apply to all other companies, listed and unlisted. Effective 2017 for all listed entities, and effective 2018 for all other publicly accountable entities, SOCPA requires the application of ‘IFRS Standards that are endorsed in Saudi Arabia and other standards and pronouncements endorsed by SOCPA’. The ‘endorsed’ standards are IFRS Standards as issued by the IASB in addition to the requirements and disclosures added to some standards by SOCPA. The ‘other standards and pronouncements’ are those standards and technical releases that are endorsed by SOCPA for matters not covered by IFRS Standards such as the subject of Zakat (religious tax/obligation). SOCPA has adopted all IFRS Standards issued through 31 December 2015 (including Interpretations).
Additional comments provided on the adoption status?
In 2016, SOCPA completed a review of all IFRS Standards (including Interpretations) by on the IFRS 2017 Red Book. As a result of the review, SOCPA adopted all of the IFRS Standards without amending any requirements in those Standards. SOCPA did add disclosure requirements to several standards, mainly to reflect Sharia or local law. SOCPA has also endorsed the recent IFRS Standards including IFRS 9, IFRS 15 and IFRS 16, encouraging early adoption.
On 16 October 2016, the Capital Market Authority (CMA) decided that the options to use the revaluation model for property, plant, and equipment and intangible assets in IAS 16 and IAS 38 and the option to use the fair value model for investment property in IAS 40 will not be available for the first three years post transition (2017 to 2019) for listed companies. Upon completion of the aforementioned period, the CMA will study whether to continue to require the cost model or whether to allow the application of the fair value/revaluation models.
The plan for SOCPA’s review of IFRS Standards may be found on SOCPA’s website.
The IFRS Transition Plan is part of a project called ‘SOCPA Project for Transition to International Accounting & Auditing Standards’. SOCPA started the project in 2012 and completed it in 2016. SOCPA’s stated goal for the project is to make a transition towards IFRS Standards after assuring their suitability to the Saudi environment through SOCPA’s independent standard-setting process.
SOCPA’s process for endorsing IFRS Standards is described below in the section on IFRS Endorsement.
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?
IFRS Standards as issued by the Board are currently required for all banks and insurance companies. Starting in 2017, SOCPA requires all other listed entities to use IFRS Standards as endorsed by SOCPA. Starting in 2018, SOCPA requires other publicly accountable entities to apply IFRS as endorsed by SOCPA as of the start of 2018. All other entities will apply the IFRS for SMEs Standard as of the start of 2018.
In endorsing IFRS Standards, SOCPA has added several disclosures and the Capital Market Authority eliminated several accounting policy options relating to (a) revaluation of property, plant and equipment and intangible assets and (b) the fair value model for investment property – see the Commitment to Global Financial Reporting Standards section of this profile.
The auditor's report and/or the basis of presentation footnote states that financial statements have been prepared in conformity with:
In the case of banks: In conformity with IFRS Standards and Accounting Standards for Financial Institutions issued by the Saudi Arabian Monetary Agency, the provisions of the Regulations for Companies, the Banking Control Law in the Kingdom of Saudi Arabia and the Bank’s By-Laws.
In the case of Insurance companies: In conformity with IFRS Standards and Regulations for Companies and the entity’s Articles of Association.
In the case of listed companies other than banks and insurance companies: In conformity with IFRS Standards that are endorsed in Saudi Arabia and other standards and pronouncements endorsed by SOCPA.
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?
For those banks and insurance companies that are currently required by SAMA to use IFRS Standards, they use IFRS Standards as issued by the Board without any modification. For other listed entities that will follow the standards adopted under the IFRS Transition Plan, SOCPA has adopted all of the IFRS Standards issued as of 31 December 2015 without amending any requirements in those Standards. However:
- SOCPA did add disclosure requirements to several standards, mainly to reflect Sharia or local law.
- The Capital Market Authority (CMA) has decided that the options to use the revaluation model for property, plant, and equipment and intangible assets in IAS 16 Property, Plant and Equipment and IAS 38 Intangible Assets and the option to use the fair value model for investment property in IAS 40 Investment Property will not be available for the first three years post transition (2017 to 2019) for listed companies. Upon completion of the aforementioned period, the CMA will study whether to continue to require the cost model or whether to allow the application of the fair value/revaluation models.
The above modifications do not affect the ability of a company to assert compliance with IFRS Standards.
If yes, what are the changes?
Other comments regarding the use of IFRS Standards in the jurisdiction?
Are IFRS Standards translated into the local language?
If they are translated, what is the translation process? In particular, does this process ensure an ongoing translation of the latest updates to IFRS Standards?
Has the jurisdiction adopted the IFRS for SMEs Standard for at least some SMEs?
If no, is the adoption of the IFRS for SMEs Standard under consideration?
Did the jurisdiction make any modifications to the IFRS for SMEs Standard?
If the jurisdiction has made any modifications, what are those modifications?
Which SMEs use the IFRS for SMEs Standard in the jurisdiction, and are they required or permitted to do so?
All SMEs (as defined in the IFRS for SMEs Standard) are permitted to use the IFRS for SMEs Standard. Alternatively, an SME is permitted to use full IFRS Standards as adopted in Saudi Arabia, with two conditions:
- The SME must apply full IFRS Standards in full, not selectively.
- Once it has elected to use full IFRS Standards, the SME must continue applying those Standards as long as no new circumstances have arisen that make the cost and effort to continue using full IFRS Standards unnecessarily high, such as:
- transfer of ownership to a company that applies the IFRS for SMEs Standard, provided that the loss of control is not temporary; and
- the SME undergoes a major restructuring that reduces the size of its operations and makes the cost and efforts high for preparing financial statements according to full IFRS Standards.
For those SMEs that are not required to use the IFRS for SMEs Standard, what other accounting framework do they use?
Other comments regarding use of the IFRS for SMEs Standard?
General requirements for companies for-profit entities
There are three kinds of legal entities that are required to release their financial statements (listed joint stock companies, closed joint stock companies and limited liability companies).
Based on Corporate Law they have to submit their Financial Statements annually to the Ministry of Commerce and Industry (MCI).
Listed companies
General requirement for companies
Listed companies
MCI:
Starting from 2015, entities are required to submit the XBRL file and PDF file simultaneously to the MCI annually.
Stock Exchange (Tadawul):
The electronic filing of quarter and annual financial reports to the Tadawul is optional for XBRL files and there is no specific timing requirement. Based on the CMA’s listing rules, issuers must submit their financial announcements and PDFs no later than 15 business days after the quarter ends for quarterly results, and 40 business days after the financial year ends for annual results.
Organisation
What type or format of structured electronic filing is required or permitted?
What is the purpose of the electronic filing?
- use by the MCI for purposes like review and scrutiny of financial statements, industry analytics, regulatory reports for submission to government and supervision over business entities;
- use by the SOCPA for purposes like ensuring compliance of audit firms with Saudi GAAP & IFRS;
- disclosure of financial statements in support of Zakat and income tax filing; and
- disclosure for the investor community.
What documents are required to be filed to the electronic filing system?


Is the financial data provided in XBRL format publicly available?
Is the XBRL reporting system based on the IFRS Taxonomy issued by the IASB?
If no, what are the reasons for not using the IFRS Taxonomy?
Is the IFRS for SMEs filing adopted in the XBRL reporting system?
If no, are there any plans to implement the IFRS for SMEs filing in the future?
How is the XBRL financial statement reporting system set up?
What is (are) the intended purpose(s) of the local base taxonomy?




Which IFRS Taxonomy files are used?



Which part(s) of the IFRS (local) Taxonomy do filer's submissions import/refer to?

Are filers permitted to replace or override any aspects or specified features of the IFRS (local) Taxonomy?
If yes, which aspects and how does this work?

What is the scope or coverage of XBRL filing/tagging?
- financial statements:
- face statements/primary financial statements.
- tagging coverage:
- detailed’ tagging—all numerical facts.
- form-based filing.
Are there any plans to extend the coverage of the XBRL filing/tagging in the future?
Which version of the IFRS Taxonomy is being used
If the taxonomy is to be updated to the 2014/2015 version, which of the following module(s) is (are) to be used?

Any guidelines or submission rules for filers?
Organisation
What type or format of structured electronic filing is required or permitted?
What is the purpose of the electronic filing?
What documents are required to be filed to the electronic filing system?






Is the financial data provided in XBRL format publicly available?
Is the XBRL reporting system based on the IFRS Taxonomy issued by the IASB?
If no, what are the reasons for not using the IFRS Taxonomy?
Is the IFRS for SMEs filing adopted in the XBRL reporting system?
If no, are there any plans to implement the IFRS for SMEs filing in the future?
How is the XBRL financial statement reporting system set up?
What is (are) the intended purpose(s) of the local base taxonomy?


Which IFRS Taxonomy files are used?



Which part(s) of the IFRS (local) Taxonomy do filer's submissions import/refer to?

Are filers permitted to replace or override any aspects or specified features of the IFRS (local) Taxonomy?
If yes, which aspects and how does this work?

What is the scope or coverage of XBRL filing/tagging?
- financial statements:
- face statements/primary financial statements; and
- notes/footnotes.
- tagging coverage:
- ‘detailed’ tagging—all numerical facts; and
- block tagging.
Are there any plans to extend the coverage of the XBRL filing/tagging in the future?
Which version of the IFRS Taxonomy is being used
If the taxonomy is to be updated to the 2014/2015 version, which of the following module(s) is (are) to be used?

Any guidelines or submission rules for filers?
Do bodies in this jurisdiction use XBRL for purposes other than general purpose financial reports? (For example, taxation authorities, statistical purposes etc.)
Organisation
Role of the organisation
Website
Email contact
Organisation
Role of the organisation
As a result of the expansion of the commercial works and activities and their growth, the Royal Order No. 5703/5//22/10, on 17/03/1954, was issued establishing the Ministry of Commerce. It was tasked with regulating and developing the internal and external commerce. Also, having been established, a number of bodies interested in commercial issues joined it. The Benchmark Registration section of the Ministry of Finance was moved to the Ministry of Commerce; in addition to supervising the commercial andindustrial chambers in the Kingdom.
The purposes of the Tadawul include the provision and management of securities trading services, providing settlement and clearing services of securities, depository and registration of securities ownership and the dissemination of securities information. The Tadawul may engage in other related activities in order to meet its objectives as specified in the Capital Market Law. It develops a service of excellence for customers (brokers, issuers, investors, vendors, etc)