ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has directed companies that the applicability period of optional temporary exemption from applying IFRS 9 (Financial Instrument) is extended till January 1, 2026.

According to an S.R.O.506(I)/2024 issued by the SECP, in exercise of the powers conferred by section 510, read with subsection (1) of section 225 of the Companies Act, 2017, the SECP has directed that the applicability period of optional temporary exemption from applying “IFRS 9” – Financial Instrument as given in para 20A of “IFRS 4” – Insurance Contracts (IFRS 4) is extended for annual periods beginning before January 1, 2026. This is subject to fulfilling the same conditions as are prescribed by para 20B of IFRS-4, it added.

Last year, the SECP had exempted certain companies holding financial assets from requirement of submission of the “IFRS 9” (Financial Instruments).

This is subject to the conditions specified for the companies in the SRO 67(I)/2023.

According to the previous notification, the SECP has notified that, in respect of companies holding financial assets, due or ultimately due from the Government of Pakistan in respect of circular debt, the requirements contained in “IFRS 9 (Financial Instruments) with respect to application of Expected Credit Losses Method” shall not be applicable on such financial assets for the financial years ending on or before December 31, 2024.

Provided that such companies shall follow relevant requirements of IAS 39-Financal Instruments: Recognition and Measurement, in respect of referred financial assets during the exemption period, the SECP added.

Copyright Business Recorder, 2024