Application of International Financial Reporting Standard 9 - Financial Instruments
| No: 381000046352 | Date(g): 25/1/2017 | Date(h): 27/4/1438 | Status: In-Force |
Translated Document
Based on Article 71 of the Implementing Regulation of the Finance Companies Control Law, which stipulates that "The Finance Company must apply international accounting standards in the preparation of their accounts and financial statements," and referring to International Financial Reporting Standard No. 9 - Financial Instruments (IFRS 9), issued on July 24, 2014, by the International Accounting Standards Board as an alternative standard to International Accounting Standard No. 39 (IAS 39). This standard relies on a forward-looking approach in recognizing losses, which helps in developing standards for impairment of financial assets and protecting the company and its shareholders from unexpected losses and It consists of three parts: (classification and measurement, impairment, and hedge accounting). The standard is effective for periods beginning on or after January 1, 2018, with early adoption permitted.
Therefore, all licensed finance companies are required to begin preparing for the implementation of IFRS 9 - Financial Instruments immediately and to provide SAMA with a progress report on the implementation on a quarterly basis starting from the end of the first quarter of 2017. Please take note and act accordingly, and inform the General Administration of Financing Companies Control of receipt within a week from the date of this notice.