KPMG to make private sector ready for upcoming IFRS

Companies working in Saudi Arabia continue to make preparations for adopting the new International Financial Reporting Standards (IFRS), which have been approved by the Saudi Organization for Certified Public Accountants (SOCPA). Listed companies have already applied new IFRS on their financial statements for the period ending Jan. 1. For periods ending after

Jan. 1, 2018, all other establishments shall implement the new standards, with early application as of 2017.

As part of its efforts to prepare and support private sector companies for adopting the new IFRS, KPMG in Saudi Arabia held several events to introduce and discuss the implementation and challenges of IFRS following the transfer from the old standards set by SOCPA.

KPMG focused on the implementation of IFRS 9, 15, and 16 that will be implemented in the coming three years. It is expected to have significant effects on current financial statements. KPMG also discussed the standards to be applied by small and medium enterprises (SMEs) with a group of CFOs, finance department heads, financial controllers, analysts and representatives from companies around the Kingdom.

“The new international financial reporting standards mark significant changes in the way that various accounting procedures are executed,” said Khalil Al-Sedais, managing partner and head of audit, KPMG.

“There are some companies with short-term fears of the new standards as they will change revenue statements from contracts with clients, financial tools and leasing. Here, proper preparation for the implementation of the rules will lead to increased transparency, disclosure and confidence in the financial statements.”

KPMG held two seminars in Riyadh recently to introduce and educate executives that are responsible for financial statements regarding the new procedures and their effect on revenues from contracts with clients, financial tools and leasing contacts.

The seminars also discussed designing templates for expected loss and details of the soon-to-be implemented Value Added Tax (VAT).

Fahad Al-Dosari, KPMG audit director in Saudi Arabia, said: “To begin with the transformation, organizations are to evaluate their need of financial reports, to identify which IFRS are to be applied, starting with regulations of requirements and users of the financial reports. Transformation has to be valuable based on comprehensive workshops that include accountants, regulators and financial report procedures.”