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  • Enhancements and Update to SAMA's Accounting Standards for Commercial Banks

    No: 9068/B.C.I/392 Date(g): 26/9/1999 | Date(h): 16/6/1420Status: No longer applicable
    As you are aware, the Saudi Central Bank issued its Accounting Standard for Commercial Banks in 1995 and is now in the process of updating and enhancing these Accounting Standards. This is being done to accommodate the advent of new banking products and services in the Kingdom as well as to respond the current developments in Accounting and Disclosure Standards emanating from various Accounting Standard setting bodies such as the Saudi Organization of Certified Public Accountants (SOCPA), International Accounting Standards Committee (IASC), the Financial Accounting Standard Board (FASB) the American Institute of Certified Public Accountants (AICPA), etc. 
     
    The scope of the proposed enhancement and updates, as described in the attachment, fundamentally includes the areas already covered by SAMA's current Accounting Standards as well as three additional areas as given below:
     
     1.Off Balance sheet Financial Instruments including Derivatives
     2.Related Party Transactions.
     3.Case Flow Statements
     

    • Attachment : 1 Accounting Standards Already Covered in SAMA's Accounting Standard for Commercial Bank Where Enhancements or Updates May be Required

      1.Standard of Investment and Trading in Securities.
       
      2.Standard of Loans.
       
      3.Standard of Deposits.
       
      4.Standard of Accounting Changes and Correction of Errors.
       
      5.Standard of Foreign Currency Translation.
       
      6.Standard of Fixed Assets and Other Real Estate.
       
      7.Standard of Consolidated Financial Statements and Investments in Subsidiaries.
       
      8.Standard of Presentation and General Disclosure.
       
      Additional Areas in Accounting Standards to be covered vis-à-vis Enhancements and Updates 
       
      9.Off Balance Sheet Financial Instruments and Derivatives
       
      10.Related Party Transaction.
       
      11.Cash Flow Statement.
       
      In order to ensure that the proposed update to SAMA's Accounting Standard for Commercial Banks and enhancements is carried out comprehensively and professionally, the Agency would like to receive detailed comments from the banks with respect to the following items vis-à-vis the individual topics covered in the attachment. 
       
       1.The scope of the proposed update and enhancement, i.e. are there any other major areas which are not covered in the Attachment
       2.Current and relevant accounting and disclosure developments with reject to the topics described in the attachment from various standard setting bodies such as SOCPA, IASC, AICPA, FASB, etc.
       3.An analysis of the alternative Accounting, Valuation and Disclosure treatment available in the light of the current Accounting and Disclosure developments from SOCPA, IASC, AICPA, FASB, etc.
       4.Recommended Accounting and Disclosure treatment for each of the major topics covered in Attachment for licensed Saudi banks.
       
      Conclusion 
       
      It would be appreciated on the basis of the guidance provided in items 1 to 4 above, if detailed and comprehensive comments, observations, critiques, and recommendation vis-à-vis the major areas described in the attachment only on individual basis are composed by the banks. Given the complexity and scope of work required, the banks have approx. three months to frame their responses Consequently, all submissions are due in SAMA's by 31.12.99, and for further clarification please contact Mr. Abdula Ibrahim Suwayan Tel. 466-2281.