|Extent of IFRS application||Status||Additional Information|
|IFRS Standards are required for domestic public companies||All domestic listed companies, financial institutions, and some others are required to use Sri Lanka Financial Reporting Standards, which are IFRS Standards with some modifications.|
|IFRS Standards are permitted but not required for domestic public companies|
|IFRS Standards are required or permitted for listings by foreign companies||Sri Lanka Financial Reporting Standards (which are IFRS Standards with some modifications) are required.|
|The IFRS for SMEs Standard is required or permitted||Permitted.|
|The IFRS for SMEs Standard is under consideration|
Profile last updated: 28 June 2021
All domestic companies whose securities trade on the main public markets are required to use Sri Lanka Accounting Standards (SLFRS and LKAS), which are converged with IFRS Standards. Modifications to IFRS Standards are explained in the IFRS Endorsement section of this profile.
Small and medium-sized companies listed on the Empower Board of the Colombo Stock Exchange (CSE) are permitted to apply the SLFRS for SMEs Standard for three consecutive financial periods after the date of listing, with some additional disclosures per SLFRS 15, SLFRS 9 and SLFRS 13.
It is mandatory to apply Sri Lanka Accounting Standards for the Specified Business Enterprises (SBEs) defined in the Sri Lanka Accounting and Auditing Standards Act. However, the SBEs defined under the threshold category are permitted to follow the SLFRS for SME Standard.
For all entities, per the Inland Revenue Act, No 17 of 2017, the timing of inclusion or deductions in calculating a person’s income shall be made according to Sri Lanka Accounting Standards framework being followed, unless otherwise mentioned in the Act.
Any entity which meets the definition of a smaller entity per SLFRS for Smaller entities is permitted to apply that Standard.
When the Board issues an amendment, Standard or Interpretation, the Accounting Standards Committee (ASC) reviews the principles and amendments and recommends adoption to the Council of CA Sri Lanka.
Standards are translated into Sinhala and Tamil and published in the Extra Ordinary Gazette as required by the Accounting and Auditing Standards Act, No 15 of 1995. Once gazetted, the standard has legal authority.
The jurisdiction has modified paragraph 69(d) of IAS 1.
Guidance Notes on Accounting for Consideration of the COVID 19 Outbreak was issued in May 2020. The temporary practical expedients stated in the guidelines for the interim reporting and the financial reporting period ended on 31 March 2020 because of a lack of information, and the one-time option for reclassification of equity investments is no longer applicable.
The following entities are eligible to apply SLFRS for Smaller Entities: