Panama
| Extent of IFRS application | Status | Additional Information |
|---|---|---|
| IFRS Accounting Standards are required for domestic public companies | All domestic companies listed on the Stock Exchange are required to use IFRS Accounting Standards as issued by the IASB. | |
| IFRS Accounting Standards are permitted but not required for domestic public companies | ||
| IFRS Accounting Standards are required or permitted for listings by foreign companies | Required. | |
| The IFRS for SMEs Accounting Standard is required or permitted | Required. | |
| The IFRS for SMEs Accounting Standard is under consideration |
Profile last updated: 13 September 2023
RELEVANT JURISDICTIONAL AUTHORITY
1. | The Technical Accounting Board (Junta Técnica de Contabilidad) |
2. | Superintendency of Banks (Superentendencia de Bancos de Panama) |
3. | Superintendency of Insurance and Reinsurance of Panama (Superintendencia de Seguros y Reaseguros de Panama) |
4. | Superintendency of Capital Markets of Panama (Superintendencia del Mercado de Valores de Panamá) |
1. | The Technical Accounting Board, incorporated to the Ministry of Commerce and Industry, is the body empowered to regulate the accounting profession in Panama. |
2. | The Superintendence of Banks of Panama (Superintendencia de Bancos de Panamá, SBP), founded in 1998 in the City of Panama, is an independent state body, with administrative and financial autonomy, which is responsible for maintaining the stability, reliability, and competitiveness of Panama's financial system. |
3. | By means of Law 12 dated 3 April 2012 regulating Insurance activities and stipulating other provisions, the Superintendency of Insurance and Reinsurance of Panama is provided full legal status as an autonomous institution of the State, with its own equity and administrative, budgetary and financial independence. |
4. | The SMV of Panama is the regulatory body responsible for the implementation and enforcement of Decree Law No. 1 of 8 July 1999, as amended to date (Securities Act) and the supervision and regulation of issuers of securities, brokers, dealers, among others of the industry. |
COMMITMENT TO GLOBAL FINANCIAL REPORTING STANDARDS
Yes.
In Article 16 of Law No. 6 of 2 February 2005, Panama added paragraph 3 to Article 699 of the Fiscal Code:
From 1 January 2006, the General Revenue Directorate will only accept income tax returns prepared according to accounting records that use the accrual-basis system based on IFRS. In exceptional circumstances, it will be possible to use the cash-basis system with previous permission from the General Revenue Directorate, according to the taxpayer’s economic activity.
Secondly, the following paragraphs have been added to the Article 22 of Law No. 280 of December 2021 (the law that regulates the accounting profession in Panama):
Article 22: The following are the powers of the Technical Accounting Board:
...
Paragraph 1: Are adopted as proper and applicable in the Republic of Panama:
1. The International Financial Reporting Standards and the International Financial Reporting Standard for Small and Medium Enterprises (SMEs) issued by the International Accounting Standards Board, a body established to promulgate accounting standards of global application.
...
Paragraph 2:
The Financial Accounting Standards Commission is empowered to recommend to the Technical Accounting Board, the regulatory actions that are required, applicable to International Accounting Standards, International Auditing Standards or Guides issued by international organizations.
Article 2 of Agreement No. 6-2012 of 18 December 2012, issued by the Superintendence of Banks of Panama—‘By means of which a new Agreement is issued that modifies the provisions on technical accounting standards applicable to banks established in Panama’—provides that technical accounting standards used in the preparation of accounting records and presentation of financial statements of the regulated subjects will be exclusively the International Financial Reporting Standards (IFRS Accounting Standards) issued by the International Accounting Standards Board (IASB), except for what is expressed in Article 3.
By means of Law No. 12 of 3 April 2012, all insurance companies are required to use IFRS Accounting Standards starting in year 2014. The Superintendency of Insurance of Panama has delayed the adoption of IFRS 17 Insurance Contracts until 1 January 2024, instead of 1 January 2023. Therefore, the 2023 financial statements for insurance companies will not be prepared in accordance with IFRS Accounting Standards; they will be prepared in accordance with IFRS 4 Insurance Contracts and IFRS Accounting Standards.
IAS Standards (now called IFRS Accounting Standards) were adopted and required for all domestic and foreign companies listed on the Stock Exchange in Panama starting from 2000, by means of a resolution issued by the National Securities Commission (now known as the Superintendence of the Stock Market).
Also, IAS Standards (now called IFRS Accounting Standards) were adopted starting from 2000 by Agreement 4 issued by the Superintendence of Banking (now known as the Superintendence of Banks of Panama).
EXTENT OF IFRS APPLICATION
For DOMESTIC companies whose debt or equity securities trade in a public market in the jurisdiction:
Yes. All companies listed on the Stock Exchange are required to use IFRS Accounting Standards.
For FOREIGN companies whose debt or equity securities trade in a public market in the jurisdiction:
IFRS ENDORSEMENT
IFRS Accounting Standards as issued by the IASB.
TRANSLATION OF IFRS ACCOUNTING STANDARDS
APPLICATION OF THE IFRS FOR SMEs ACCOUNTING STANDARD
Yes. The IFRS for SMEs Accounting Standard was adopted by the Accounting Technical Board through Resolution 03-2010 of 28 October 2010 issued by the Ministry of Commerce and Industry.
The law that regulates the accounting profession in Panama was subsequently updated in December 2021, which also included incorporation of this resolution.
