The Future of Financial Reporting in KSA: IFRS Updates Every CFO Must Know

Saudi Arabia’s ongoing adoption and refinement of International Financial Reporting Standards (IFRS) have reshaped the financial reporting framework across sectors. With new standards and amendments taking effect, finance leaders must understand the implications for recognition, measurement, and disclosure to meet regulatory expectations and maintain stakeholder confidence.

This article outlines the most relevant IFRS developments for CFOs in Saudi Arabia and explores their implications for future-ready financial reporting.

IFRS in Saudi Arabia: A Modernised Reporting Environment

Saudi Arabia’s alignment with IFRS has positioned the Kingdom among global leaders in financial transparency. Listed entities, and many non-listed organisations, now report under IFRS, ensuring consistency and comparability across capital markets.

The Saudi Organisation for Chartered and Professional Accountants (SOCPA) continue to issue local guidance to support effective implementation. This role is critical in helping companies navigate complex accounting requirements and maintain high reporting quality as standards evolve.

Key IFRS Updates Affecting 2026 and Beyond

CFOs should closely monitor several IFRS updates expected to significantly influence reporting processes, data systems, and governance frameworks.

1. IFRS 17 – Insurance Contracts

IFRS 17 introduces a unified and robust framework for insurance accounting, enhancing comparability and transparency across the industry. Key impacts include:

• Measurement of liabilities based on current, unbiased estimates of future cash flows
• Recognition of profits in line with insurance service delivery
• Substantial disclosure requirements to provide clearer insight into financial performance

For insurance providers and financial institutions, IFRS 17 will materially affect balance sheets, profitability patterns, and operational processes. Early adoption planning and upgraded systems are essential.

2. IFRS 9 – Financial Instruments

IFRS 9 continues to evolve through amendments and clarifications, particularly in:

• Expected credit loss (ECL) modelling and forward-looking risk assessment
• Hedge accounting, enabling closer alignment with risk management strategies
• Reclassification and measurement of financial assets as business models change

Banks, lenders, investment firms, and corporates with complex financial portfolios must ensure that credit models and reporting systems remain robust and up to date.

3. IFRS 16 – Leases

IFRS 16 requires the recognition of most leases on the balance sheet, transforming the way companies account for leasing arrangements. CFOs should focus on:

• Accurate identification and classification of leases
• The effect on depreciation, finance costs, and key financial ratios
• Expanded disclosures relating to lease terms and obligations

Organisations should reassess their lease portfolios to understand the potential impact on covenants, cash flow metrics, and funding decisions.

4. IFRS 15 – Revenue from Contracts with Customers

IFRS 15 provides a principles-based framework for recognising revenue across all industries. Key considerations include:

• Identifying distinct performance obligations
• Recognising revenue as these obligations are fulfilled
• Enhancing transparency around contract structures and revenue streams

Sectors such as construction, technology, and services where multi-element contracts are common must ensure that their revenue models and contract governance processes fully align with IFRS 15.

5. The Rise of Sustainability-Linked Reporting

While IFRS Sustainability Disclosure Standards continue to mature, companies in Saudi Arabia should expect increasing regulatory and investor emphasis on ESG-related reporting. Anticipated requirements may include:

• Climate-related risk disclosures
• Sustainability-linked financial instruments
• Governance structures supporting environmental and social commitments

Early preparation will help organisations align with emerging expectations and remain competitive in global markets.

What This Means for CFOs

These IFRS developments carry significant implications for financial leadership:

• Systems and Technology: Modern reporting requires advanced ERP capabilities, stronger automation, and enhanced analytics.
• Internal Controls: More complex standards demand robust control frameworks and audit-ready processes.
• Investor Relations: Transparent and consistent reporting under IFRS strengthens trust in capital markets.
• Strategic Insight: High-quality financial data supports better decisions on risk, investment, and long-term growth.
• Capability Building: Finance teams must be equipped with the latest IFRS knowledge, supported by training and continuous development.

Preparing for What Comes Next

CFOs can strengthen readiness by taking the following steps:

1. Conduct a comprehensive gap analysis against upcoming IFRS changes.
2. Update accounting policies to reflect amendments and interpretations.
3. Invest in technology that enhances accuracy, automation, and compliance.
4. Build IFRS expertise across finance teams through targeted training.
5. Work closely with auditors and advisors to validate interpretations and ensure consistent application.

Proactive preparation will position organisations to meet regulatory requirements with confidence and elevate the quality of financial insight available to decision-makers.

A New Chapter for Financial Reporting in KSA

The future of financial reporting in Saudi Arabia is defined by ongoing IFRS development and a national drive for transparency, accountability, and global alignment. CFOs who stay ahead of these changes and implement strong reporting frameworks will play a pivotal role in enhancing corporate governance, strengthening stakeholder trust, and enabling strategic, data-driven decision-making.

In today’s environment, embracing IFRS evolution is not merely a compliance exercise, it is a critical element of financial leadership and a foundation for long-term success in the Kingdom’s dynamic and rapidly progressing economy.