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2020-12-13

The Amendment of the International Accounting Standards

The Saudi Central Bank (SAMA) has issued binding instructions requiring all finance companies operating in the Kingdom to comply with the Saudi Organization for Chartered and Professional Accountants' (SOCPA) adoption of periodic International Accounting Standards Board amendments. These regulatory updates specifically modify IFRS 1, IFRS 9, IAS 41, IAS 37, IAS 16, and IFRS 3 to clarify subsidiary translation options, financial instrument modifications, agricultural fair value measurements, onerous contract costs, property testing proceeds, and business combinations. Compliance with the attached instructions is mandatory from their email dispatch date, with full reference materials accessible via SOCPA’s official website.

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Saudi Central Bank
SAMA
Saudi Central Bank

Reference No.: 42027416
Date: 1442/04/28
Attachments: None

To the Esteemed,
Peace, mercy, and blessings of God be upon you,

Subject: Amendments to the International Accounting Standards and International Financial Reporting Standards

Reference is made to the Saudi Central Bank's instructions previously issued via email on 18/4/1441H (corresponding to 3/12/2020G) regarding the amendments to the International Accounting Standards and International Financial Reporting Standards.
Attached is a copy of these instructions, which must be complied with from the date of their email dispatch to you.

Yours sincerely,
Badr bin Hazam Al-Otaibi
Director General of Finance Companies Supervision

To the Esteemed,
Peace, mercy, and blessings of God be upon you,

The Saudi Central Bank has received a letter from the Saudi Organization for Chartered and Professional Accountants (SOCPA) regarding its adoption of several periodic amendments and improvements issued by the International Accounting Standards Board (IASB), which include the following aspects:

  • The improvement to IFRS 1 "First-time Adoption of International Financial Reporting Standards", which provides relief for subsidiary entities adopting IFRSs for the first time by granting them an additional option to measure cumulative translation differences.
  • The improvement to IFRS 9 "Financial Instruments", which consists of adding practical guidance to clarify modifications included in the present value amount allocated for obligations under new terms, and how to account for costs and fees incurred when accounting for the exchange or modification of debt instruments as a settlement of obligations.
  • The improvement to IAS 41 "Agriculture", which relates to amounts included in cash flows for the purpose of measuring fair value.
  • The amendments to IAS 37 "Provisions, Contingent Liabilities and Contingent Assets", which clarify the meaning of cost of fulfilling a contract in the context of the definition of onerous contracts.
  • The amendments to IAS 16 "Property, Plant and Equipment", which address the treatment of proceeds from selling items produced while a company is testing an asset.
  • Several amendments to IFRS 3 "Business Combinations".

You may review the above periodic improvements and amendments by visiting the official website of the Saudi Organization for Chartered and Professional Accountants (SOCPA) - International Standards page.

Yours sincerely,...

Finance Companies Supervision Department - Offsite Division
Saudi Central Bank
SAMA
Saudi Central Bank

Note: This email address is not intended to receive replies and incoming messages are not monitored.

Distribution Scope:

  • Finance companies operating in the Kingdom

P.O. Box 2992 Riyadh 11169, Kingdom of Saudi Arabia Tel: +966 11 463 3000
P.O. Box 2992, Riyadh, Kingdom of Saudi Arabia Tel: +966 11 463 3000

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