Regulatory Alerts2009-02-03
Instructions on Mandatory Policies and Standards for Fair Value Re-evaluation and Disposal of Re-evaluation Surplus
The Jordan Securities Commission mandates that all supervised issuing companies implement International Financial Reporting Standards for their 2007 financial statements, enforcing strict rules on fair value re-evaluation and surplus disposal. Companies must retain unrealized gains from trading financial assets in retained earnings rather than distributing them, recognize significant or prolonged market value drops directly in the income statement, and exclude negative fair value equity adjustments from distributable dividends unless the board assesses portfolio-level risk. Furthermore, entities previously using re-evaluation models for property, real estate, and agricultural assets must align their financial performance with the cost model in consultation with external auditors.