The Saudi Capital Central Market Authority (CMA) has announced that entities listed on the Saudi Stock Exchange will have to disclose their progress in adopting IFRS in the build up to the standards becoming mandatory as off 1 January 2017.
Entities which already have IFRS financial statements ready for disclosure are exempted from this obligation, however all other listed entities will have to disclose their IFRS transitions to the CMA in three phases.
Phase one requires listed companies to disclose the following information on the Saudi Stock Exchange’s website by 1 September 2016:
- Whether an IFRS transition plan has been prepared, if no plan is prepared then a date a plan will be ready must be specified.
- If an experienced IFRS specialist has been hired by the specific company, and when one will be hired otherwise.
- Whether an IFRS team responsible for the implementation of IFRS has been formed, or disclose the reasons a team has not been formed.
- Any difficulties being faced due to the IFRS transition.
- The target date for the disclosure of the first set of financial statements and the periods covered by such financial statements.
Phase two, which includes the periods from the 30 September, 2016 to 30 October, 2016 stipulates that listed entities must disclose the following:
- Any updates that have occurred from Phase one disclosure.
- Whether the accounting policies required for IFRS have been approved by the company, and if they have not been approved, the listed firm must specify a target date for the latter. The date must ensure that the IFRS transition will be implemented before the 1 January, 2016.
Phase three which includes the periods from the 1 January, 2017 to the 31 January, 2017, entities must disclose the following:
- Phase one and two disclosure updates.
- Whether financial statements have been prepared using IFRS and the length of time of preparation. Should the statements not be ready, then the reasons of non compliance must be disclosed.
- The significant effects of IFRS transition on the company, even if they are irrelevant.
- Any issues that many hinder the preparation of the financial statements using IFRS.
- The extent of the entity’s readiness to prepare its IFRS statements for 2017 first quarter within the applicable regulatory period.