ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has announced a temporary deferment in the enforcement of the Expected Credit Losses (ECL) Model under International Financial Reporting Standard (IFRS) 9, specifically pertaining to financial instruments for companies with financial assets due from the Government of Pakistan related to inter-corporate circular debt. This deferment applies until the financial year ending on or before December 31, 2025.
According to Securities and Exchange Commission of Pakistan, this extension is granted to accommodate the development of a comprehensive guideline by the Institute of Chartered Accountants of Pakistan. The guideline aims to assist companies in adhering to the ECL Model requirements concerning the unique circular debt situation in Pakistan, ensuring full compliance with IFRS 9. The guideline is projected to be released by December 31, 2024.