|Extent of IFRS application||Status||Additional Information|
|IFRS Standards are required for domestic public companies||Required.|
|IFRS Standards are permitted but not required for domestic public companies|
|IFRS Standards are required or permitted for listings by foreign companies||Required.|
|The IFRS for SMEs Standard is required or permitted||Permitted except for very small and micro-sized entities, which must use a national standard for micro and small entities.|
|The IFRS for SMEs Standard is under consideration|
As indicated earlier, the adoption was done by a resolution at an Annual General Meeting of ZICA, which is the body designated under the Accountants Act of 2008 to establish accounting standards in Zambia. Thereafter, adoption is automatic as and when a new standard is issued. Since use of IFRS Standards is mandated on an ongoing basis, once a new or amended standard is issued by the Board, it becomes a requirement for those companies using IFRS Standards in Zambia.
The legal authority to set financial reporting standards rests with the Institute as provided for in the Accountant Act of 2008. However, the current Companies Act is not aligned with the Accountants Act as it does not specify which accounting standards are to be used by companies when preparing financial statements.
The ZICA has concluded that it might be difficult for ZICA to legally enforce its mandate because the Companies Act does not specify which standards are to be used. To address this inconsistency, ZICA has made a submission to the consultants currently reviewing the Companies Act under the Ministry of Commerce, Trade and Industry to revise the Companies Act to clearly state that the financial statements of all companies in Zambia should be prepared in accordance with the financial reporting standards prescribed by ZICA.
All SMEs with an annual turnover of less than K20 million (rebased) (approximately US$ 2 million) are required to use the Zambian Financial Reporting Standard for Micro and Small Entities (MSEs). However, if the entity actively trades in financial instruments (including shares, derivatives, and bonds) or if it is a real estate investment company, it must use the IFRS for SMEs Standard or full IFRS Standards.
All SMEs whose turnover is more than K20 million (rebased) per annum and are not listed on the stock exchange may opt to use full IFRS instead of the IFRS for SMEs Standard.