The Saudi Capital Market Authority (CMA) Authority announced the Board of Commissioners resolution which obligates listed entities to adopt the International Financial Reporting Standards (IFRS) as endorsed by the Saudi Organization for Certified Public Accountants (SOCPA) who had resolved for entities listed on the Saudi stock Exchange to implement the IFRS starting from Jan. 1, 2017. The IFRS transition progress on phases: Phase one: During the period from 21/8/2016 to 1/9/2016, listed entities should disclose the following on the Saudi Stock Exchange (Tadawul) website: 1. Whether an IFRS transition plan had been prepared, which should include as an example, the determination of the target date to approve the accounting policies. Where a plan had not been prepared, the listed entity should determine the target date for preparing the plan. Such target dates should be appropriate enough to assure the transition to the IFRS before 1/1/2017. 2. Whether an IFRS experienced and specialized external consultant had been hired. Where a consultant had not been hired, the listed entity should disclose if it has a plan to hire a consultant and determine the target hiring date. Such target dates should be appropriate enough to assure the transition to the IFRS before 1/1/2017. If there is no plan to hire an external consultant, the listed entity should disclose the reasons for not hiring a consultant. 3. Whether an entity's internal team responsible for the IFRS transition plan and its implementation had been formulated or not. Where a team had not been formulated, the listed entity should disclose the reasons for not doing so. 4. The IFRS transition process difficulties, if any, which the listed entity is facing. 5. The target date for the preparation of the first set of IFRS financial statements and the periods covered by such financial statements. The aforementioned board resolution exempts those entities that are ready for the IFRS transition from making these disclosures, stipulating that such entities disclose that they have readily available IFRS financial statements, and the significant effects as a result of implementing the IFRS. Phase two: During the period from 30/9/2016 to 30/10/2016 listed entities should disclose the following on Tadawul website: 1. Phase one disclosures updates. 2. Whether the accounting policies necessary for the preparation of IFRS financial statements had been approved. Where the accounting policies had not been approved, the listed entity should determine the target date for approving the aforementioned accounting policies. Such target dates should be appropriate enough to assure the transition to the IFRS before 1/1/2017. Where the entity is ready to implement the IFRS, it would also be exempted from the above disclosures, stipulating that the entity should disclose that it has readily available IFRS financial statements and the significant effects as a result of implementing the IFRS. Phase three: During the period from 1/1/2017 to 31/1/2017, listed entities should disclose the following on Tadawul website: 1. Phase one and two disclosures updates. 2. Whether an IFRS financial statements had been prepared and the periods, over which such financial statements had been prepared. Where an IFRS financial statements had not been prepared, the listed entity should disclose the reasons for not doing so, and the target date for preparing such financial statements. 3. The significant effects on the entity as a result of implementing the IFRS, the moment the entity can determine such effects. Where the effects of implementing the IFRS is immaterial, the listed entity should disclose so. 4. Any hindrances that might affect the listed entity ability to prepare its IFRS financial statements. 5. The extent of the listed entity's readiness to prepare its IFRS financial statements for 2017 first quarter within the applicable regulatory period. The board resolution also indicated that the Authority might request the listed entities to make any additional disclosures the Authority finds to be necessary in relation to the IFRS transition plan.
