The Authority participated in the first meeting of the Advisory Forum for Accounting Standards (ASAF), affiliated with the International Accounting Standards Board

The Saudi Organization for Certified Public Accountants (SOCPA), represented by its Accounting Standards Board, participated in the first meeting of the Advisory Forum for Accounting Standards affiliated with the International Accounting Standards Board, which was held via video conference during the period from March 24 to 25, 2025. The Executive Director of Professional Standards, Dr. Abdulrahman Al-Rizeen, represented the organization at the meeting.

The participants discussed a number of updates and projects related to international standards, including the project of the International Accounting Standards Board to develop International Accounting Standard 28 regarding the equity method, in order to address a number of practical issues that the International Accounting Standards Board observed, such as purchasing an additional share in the investee company and recognizing gains from transactions with the associate company. The participants provided a number of suggestions regarding the project. The representative of SOCPA proposed including a number of topics in the development project, such as the definition of significant influence, and the extent of influence of both the investing entity and the investee entity on the same control.

One of the topics discussed by the participants was the research project of the International Accounting Standards Board on intangible assets, primarily focusing on the project’s direction. The participants provided a number of suggestions to assist the International Accounting Standards Board in guiding its research efforts. Among the suggestions made by SOCPA’s representative was the need to reconsider how to account for internally developed intangible assets, particularly those related to the use of technology, as they represent key income-generating assets for many companies. Therefore, continuing to exclude such assets could limit the fairness of presenting the financial position of the company in the financial statements. He also proposed reconsidering the restrictions on the use of the revaluation model for intangible assets.

The participants also discussed the project of the International Accounting Standards Board to develop International Accounting Standard 32 regarding financial instruments with equity characteristics. The scope of the discussion was on presentation and disclosure, and did not address measurement issues at this stage. The participants presented a number of suggestions regarding the project.

One of the topics discussed by the participants was the project to develop the statement of cash flows. The participants provided a number of suggestions regarding the project. The representative of SOCPA suggested that the International Accounting Standards Board consider how to deal with digital currencies due to their widespread use. Among the suggestions made by SOCPA’s representative was to consider reclassifying the statement of cash flows in a way that reflects the classification adopted in International Financial Reporting Standard 18, thus increasing the linkage between the two statements and providing useful information to decision-makers regarding the entity’s performance and cash flows arising from various activities.

The participants also discussed during the meeting the post-implementation review of International Financial Reporting Standard 16. The participants provided a number of suggestions regarding what could be included in the request-for-information document to initiate the review. The representative of SOCPA emphasized the appropriateness of the topics proposed by the International Accounting Standards Board, appreciating the inclusion of the sale and leaseback issue as part of the review, as SOCPA had previously requested the International Accounting Standards Board to reconsider these requirements, especially after the issuance of several decisions by the International Financial Reporting Interpretations Committee that need to be reconsidered due to the lack of clarity in the requirements of the standard.

Source: Saudi Organization for Certified Public Accountants