Financial Crime World

Yemen Strides Towards Financial Reporting Framework with International Standards

Yemen’s financial institutions are making significant progress in adopting the International Financial Reporting Standards (IFRS), marking a major step forward in enhancing transparency and accountability.

Adoption of IFRS Mandated by Government

In July 2013, Order No. 2952 was issued by the President of the Republic of Yemen, directing all companies across public, mixed, and private sectors to quickly adopt International Accounting Standards (IAS) and IFRS. The Central Bank of Yemen has further solidified this commitment by issuing a circular mandating banking institutions to use IFRS in their financial reporting.

Tax By-Laws Support Adoption of IFRS

Article 107 of the Tax By-Laws requires large and medium-sized companies with revenues exceeding YR 200,000,000 to prepare financial statements using international standards. This move aims to improve transparency and facilitate cross-border transactions.

Public Companies Required to Comply with IFRS

Despite lacking a stock exchange, Yemen’s Commercial Companies Law allows public companies to sell shares to the public. To ensure compliance, these companies are required to prepare financial statements in accordance with generally accepted accounting principles, with most opting for IFRS as their preferred framework.

YACPA Plays Key Role in Adoption of IFRS

The Yemeni Association of Certified Public Accountants (YACPA) is actively working with government and private sector entities to formalize the adoption of IFRS across the country. Their efforts will help ensure a smooth transition to the new standards.

Benefits of Adopting IFRS

The gradual implementation of IFRS in Yemen’s financial reporting framework is expected to have several benefits, including:

  • Improved transparency
  • Enhanced accountability
  • Facilitation of foreign investment
  • Promotion of economic stability and growth

As Yemen moves towards greater integration with the global economy, the adoption of international accounting standards will undoubtedly play a vital role in promoting economic development.