Daily The Business

SECP halts replacement Int’l Accounting Standard 39

LAHORE: The Securities and Exchange Commission of Pakistan (SECP) has
deferred the applicability of the International Financial Reporting
Standard (IFRS) 9 “Financial Instruments” for all companies required
to prepare their financial statements in accordance with the
requirements of IFRS.

Through SRO 1007(I)/2017, dated October 4, 2017, the SECP had
notified IFRS 9, replacing the International Accounting Standard (IAS)
39 “Financial Instruments: Recognition and Measurement” with effect
from reporting periods starting July 1, 2018. However, a number of
companies have approached the SECP, requesting either relaxation from
or deferral of the IFRS 9 due to non-availability of relevant
data/estimates, increased complexity of the new impairment model, time
constraint for finalization of financial statements for the period
ending on December 31, 2018, and peculiar circumstances of various
companies facing the issue of circular debt.

Based on the recommendation of the Institute of Chartered Accountants
of Pakistan (ICAP), the SECP has deferred the applicability of IFRS 9
for reporting period/year ending on or after June 30, 2019.

It is expected that the companies will benefit from the extension and
will fully prepare themselves for transition to ensure complete
compliance with IFRS 9 by the new effective date. The SECP has also
allowed early adoption of IFRS-9 for companies that wish to do so.
Section 225 of the Companies Act, 2017, has empowered the SECP to
notify financial reporting standards for the purposes of preparation
of financial statements by companies.

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