|Extent of IFRS application||Status||Additional Information|
|IFRS Standards are required for domestic public companies||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||Permitted (adoption is in process).|
|The IFRS for SMEs Standard is under consideration|
IFRS Standards are required for all banks, insurance companies, and listed companies, as follows:
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.
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.
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.
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:
The above modifications do not affect the ability of a company to assert compliance with IFRS Standards.
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: