Background

The Institute of Chartered Accountants of Pakistan (ICAP) was established on 1st July 1961 with the prime objective of regulating the profession of accounting in Pakistan.

Institute of Chartered Accountants of Pakistan is the standard-setting body with the mandate to recommend standards to Securities and Exchange Commission of Pakistan for notification in Official Gazette of Pakistan. Securities and Exchange Commission of Pakistan is the corporate regulator empowered under the Companies Act, 2017 of Pakistan to mandate applicability of financial reporting standards for companies in Pakistan.

Accounting Standards

Pakistan has adopted all effective IFRS Accounting Standards, except IFRS 1 First-time Adoption of International Financial Reporting Standards, IFRS 18 Presentation and Disclosure in Financial Statements and IFRS 19 Subsidiaries without Public Accountability. The effective date of IFRS 17 Insurance Contracts has been deferred in Pakistan until 1 January 2027 for companies engaged in insurance, takaful, re-insurance and re-takaful activities. The ICAP Council has recommended adoption of IFRS 18 and IFRS 19 to SECP and SECP is completing its process and expected to notify these two standards shortly in this year.

The SECP and SBP have granted few exemptions from or deferrals to the adopted IFRS Accounting Standards.

Sustainability Disclosure Standards

On 31 December 2024, the Securities and Exchange Commission of Pakistan (SECP) issued an order mandating application of IFRS S1 and S2 and communicated their applicability to listed companies and SECP licensed non-listed Public Interest Companies through a phased approach, under section 238 of the Companies Act, 2017.