ICAP Issues Guidelines on IFRS 9 Application for Circular Debt

The Institute of Chartered Accountants of Pakistan (ICAP) has issued comprehensive Guidelines on the application of the IFRS 9 Expected Credit Loss Model on circular Debt. Earlier, the Securities and Exchange Commission of Pakistan (SECP) had temporarily deferred the applicability of the IFRS-9 Expected Credit Losses (ECL) model only for companies holding financial assets, due directly or ultimately due from the Government of Pakistan in respect of inter-corporate circular debt, till the financial year ending on or before December 31, 2025, considering the development of Guidelines by ICAP. SECP expects that subject Guidelines by ICAP will assist relevant companies in applying the requirements of IFRS 9 on circular debt, leading to the complete implementation of IFRS 9 by these companies as per the timeline already specified by SECP.