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Capital Market Authority Announcement Regarding Obligating Entities Listed on Parallel Market to Disclose their IFRS Transition Progress on Phases

​Reference to the transition plan to adopt the International Financial Reporting  Standards (the "IFRS"), which were endorsed by the Saudi Organization for Certified Public Accountants ("SOCPA") , who had resolved for entities listed on the Parallel Market to implement the IFRS starting from 1/1/2018, and moving forward from the Capital Market Authority (the "Authority") role in regulating and monitoring the works and activities of parties subject to the control and supervision of the Authority, and regulating and monitoring the full disclosures of information regarding financial securities and their issuers, and for the purpose of getting  the necessary comfort regarding the preparation of IFRS financial statements by entities listed on the Parallel Market before the due date, and getting the necessary comfort regarding the extent of commitment of the listed entities on Parallel Market to the IFRS convergence plan, the Authority announces the Board of Commissioners resolution which obligates listed entities on Parallel Market  to disclose their IFRS transition progress on phases as follows:

 

Phase one:
During the period from 1/7/2017 to 1/8/2017, listed entities on Parallel Market should disclose the following on the Saudi Stock Exchange "Tadawul" web site:

  1. Whether an IFRS transition plan had been prepared, which should include as an example, the determination of the target date to approve the accounting policies.Where a plan had not been prepared, the listed entity should determine the target date for preparing the plan. Such target dates should be appropriate enough to assure the transition to the IFRS before 1/1/2018.
  2. Whether an  IFRS experienced and specialized external consultant  had been hired. Where a consultant had not been hired, the listed entity should disclose if it has a plan to hire a consultant and determine the target hiring date. Such target dates should be appropriate enough to assure the transition to the IFRS before 1/1/2018. If there is no plan to hire an external consultant, the listed entity should disclose the reasons for not hiring a consultant.
  3. Whether an entity's internal team responsible for the IFRS transition plan and its implementation had been formulated. Where a team had not been formulated, the listed entity should disclose the reasons for not doing so.
  4. The IFRS transition process difficulties, if any, which the listed entity is facing.

Where the entity is ready to implement  the IFRS, it would also be exempted from the above disclosures, stipulating that the entity should disclose that it has readily available IFRS financial statements  and the significant effects as a result of implementing the IFRS.

 

Phase two:
During the period from 1/9/2017 to 1/10/2017 listed entities on Parallel Market  should disclose the following on the Saudi Stock Exchange "Tadawul" web site:

  1. Phase one disclosures updates.
  2. Whether the accounting policies necessary for the preparation of IFRS financial statements had been approved. Where the accounting policies had not been approved, the listed entity should determine the target date for approving the aforementioned accounting policies. Such target dates  should be appropriate enough to assure the transition to the IFRS before 1/1/2018.

Where the entity is ready to implement  the IFRS, it would also be exempted from the above disclosures, stipulating that the entity should disclose that it has readily available IFRS financial statements  and the significant effects as a result of implementing the IFRS.

 

Phase three:
During the period from 1/12/2017 to 31/12/2017, listed  entities on Parallel Market should disclose the following on the Saudi Stock Exchange "Tadawul" web site:

  1. Phase one and two disclosures updates.
  2.  Audited opening IFRS statement of financial position as of the IFRS transition date that is prepared as part of the IFRS transition project.
  3.  Whether an IFRS financial statements had been prepared and the periods, over which such financial statements had been prepared.
  4.  The significant effects on the entity as a result of implementing the IFRS, the moment the entity can determine such effects. Where the effects of implementing the IFRS is immaterial , the listed entity should disclose so.
  5.  Any hindrances that might affect the listed entity ability to prepare its IFRS financial statements.
  6.  The extent of the listed entity's readiness to prepare its IFRS financial statements for 2018 first quarter within the applicable regulatory period.

The aforementioned board resolution also indicated that the Authority might request the listed entities on Parallel Market to make any additional  disclosures the Authority finds to be necessary in relation to the IFRS transition plan.