Jordan Requires Full Adoption of IFRS Accounting Standards

Enhancing Transparency and Consistency in Financial Reporting

The Jordanian Securities Commission (JSC) has announced that all foreign companies whose securities trade in the public market must use International Financial Reporting Standards (IFRS) accounting standards in their consolidated financial statements. This move aims to ensure that investors have access to high-quality and comparable financial information.

Key Requirements

• All foreign companies listed on the Jordanian Stock Exchange must use IFRS standards as issued by the International Accounting Standards Board (IASB).
• Companies are no longer permitted to use the revaluation model for property, plant, and equipment, intangible assets, and investment property. Instead, they must use the cost-depreciation-impairment model.

Benefits

• Enhances investor confidence
• Promotes transparency in financial reporting
• Provides a more accessible framework for small and medium-sized enterprises (SMEs) to report their financial performance

Support from the IFRS Foundation

The JSC has coordinated with the IFRS Foundation to publish an annual bound volume of IFRS standards in Arabic, making it easier for companies to access and implement the standards.

SMEs and IFRS for SMEs

• Small and medium-sized enterprises (SMEs) are permitted to use the IFRS for SMEs accounting standard
• Formal adoption is still under discussion

Government Support

The Jordanian government has incorporated IFRS standards into law through the Companies Law and regulations issued under that law. This ensures that all companies operating in the country are required to use IFRS accounting standards.

Conclusion

The full adoption of IFRS accounting standards is a major step forward for financial reporting in Jordan, promoting transparency, consistency, and investor confidence.