IFRS Adoption in the GCC: A Complete Guide for Businesses in Oman, UAE, Saudi Arabia & Beyond (2024 Update)

Introduction

Over the last decade, the Gulf Cooperation Council (GCC)—including Oman, UAE, Saudi Arabia, Qatar, Kuwait, and Bahrain—has undergone one of the most significant financial reporting transformations in the world: the widespread adoption of International Financial Reporting Standards (IFRS). Driven by economic diversification, global investor participation, and national transformation programs, IFRS has become the backbone of financial reporting across nearly all major industries in the region.

Whether a company is a startup, SME, LLC, holding company, financial institution, or listed entity, IFRS touches every aspect of its financial reporting—from revenue recognition to leases, fair value measurement, consolidation, impairment, and disclosures.

This in-depth 3,000+ word guide explores the evolution of IFRS in the GCC, current adoption status, major challenges, implementation insights, disclosure requirements, industry-specific considerations, and the future of accounting standards in the region.

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1. IFRS Adoption Status Across the GCC

IFRS is now the dominant accounting framework across the GCC. Below is a country-by-country breakdown.

1.1 Oman

Oman fully mandates IFRS for:

• Banks
• Insurance companies
• Listed companies
• Large LLCs
• Investment firms

Regulator: CMA (Capital Market Authority)

Banks follow IFRS with additional CBO (Central Bank of Oman) circulars.

Oman has strong enforcement with:

• Detailed disclosure requirements
• IFRS training mandates
• Industry-specific reporting rules

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1.2 United Arab Emirates (UAE)

IFRS is mandatory for all:

• Listed companies (DFM, ADX, Nasdaq Dubai)
• Banks and financial institutions
• Free zone entities (DIFC, ADGM)
• Large private companies

Regulators: SCA, UAE Central Bank, DFSA, ADGM

DIFC and ADGM explicitly require IFRS or IFRS for SMEs.

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1.3 Saudi Arabia (KSA)

Saudi Arabia has one of the strongest IFRS adoption frameworks.

• SOCPA (Saudi Organization for Chartered and Professional Accountants) aligned all listed companies to IFRS.
• Banks follow IFRS with SAMA additional reporting.
• Insurance firms follow IFRS 17 with local rules.

Saudi Arabia uses “IFRS as endorsed in KSA,” meaning standards are adopted with minor modifications.

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1.4 Qatar

Qatar requires IFRS for:

• Listed companies
• Financial institutions
• Insurance companies
• Large private companies

Regulated by QFMA, QCB, and QFCA.

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1.5 Bahrain

Bahrain mandates IFRS for all:

• Banks
• Listed entities
• Licensed financial institutions

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1.6 Kuwait

Kuwait mandates IFRS for:

• Listed companies
• Investment firms
• Financial institutions

Private companies often follow IFRS voluntarily.

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2. Why IFRS Matters for GCC Businesses

2.1 Attracting Foreign Investment

IFRS enhances transparency and comparability—key priorities for international investors entering GCC markets.

2.2 Economic Diversification

As Oman, UAE, and Saudi Arabia shift away from oil dependency, IFRS provides the foundation for competitive and globally aligned financial ecosystems.

2.3 Compliance with Global Markets

Multinational companies operating in the GCC require IFRS consistency across subsidiaries.

2.4 Improved Internal Controls

IFRS adoption strengthens:

• Governance
• Risk management
• Accountability
• Financial discipline

2.5 Better Access to Capital

Banks rely heavily on IFRS-compliant financial statements for lending decisions.

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3. Major IFRS Standards Impacting GCC Companies

Here we explore the most important IFRS standards affecting GCC industries.

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3.1 IFRS 15 – Revenue From Contracts With Customers

This is one of the most challenging standards for GCC companies because of:

• Construction contracts (very common in GCC)
• Long-term service agreements
• Oil & gas revenues
• Telecom subscription models
• Real estate developments

Issues involve:

• Identifying performance obligations
• Allocation of transaction price
• Variable consideration
• Contract modifications

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3.2 IFRS 16 – Leases

This standard has had a huge impact due to:

• Retail leases (especially in UAE, KSA)
• Equipment leases
• Land leases
• Real estate and construction leases

Almost all leases must now be capitalized, affecting:

• Assets
• Liabilities
• EBITDA
• Debt ratios

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3.3 IFRS 9 – Financial Instruments

Highly relevant in GCC due to:

• Banking and finance dominance
• Investment companies
• Islamic finance products
• Trade receivables impairment (expected credit loss model)

Issues include:

• Credit risk modeling
• Fair value measurement
• Hedge accounting

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3.4 IFRS 17 – Insurance Contracts

A major standard affecting all GCC insurance companies.
Oman, UAE, KSA, Qatar, and Bahrain have fully implemented IFRS 17.

It requires:

• Completely new measurement models
• More extensive actuarial involvement
• Enhanced disclosures

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3.5 IFRS 13 – Fair Value Measurement

Highly relevant because:

• GCC real estate valuations are fluctuating
• Investment portfolios are large
• Private equity and venture capital are growing

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3.6 IAS 36 – Impairment of Assets

Critical due to:

• Construction slowdowns
• Inventory build-up
• Changing real estate valuations

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4. IFRS Implementation Challenges in the GCC

4.1 Complex Contract Structures

Construction, oil & gas, and real estate contracts often require detailed IFRS interpretation.

4.2 Limited IFRS Expertise

Many SMEs lack:

• IFRS knowledge
• Technical accounting teams
• Access to training

4.3 Data Quality Issues

IFRS requires accurate:

• Historical data
• Contract documentation
• Valuation inputs

4.4 Fair Value Measurement Challenges

GCC markets often lack:

• Active markets
• Reliable comparable data

4.5 Technology Limitations

Many companies still use basic accounting software.

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5. IFRS for SMEs in the GCC

IFRS for SMEs is widely used by:

• Small private companies
• Free zone entities
• Family-owned businesses

Benefits include:

• Simplified standards
• Reduced disclosures
• Easier implementation

However, banks sometimes prefer full IFRS financials for lending.

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6. Industry-Specific IFRS Challenges in the GCC

6.1 Construction & Contracting (IFRS 15 & IFRS 16)

Challenges:

• Percentage-of-completion
• Contract modifications
• Claims and variations
• Retention receivables

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6.2 Oil & Gas (IFRS 6, IAS 16, IAS 37)

Challenges:

• Exploration and evaluation assets
• Depletion and depreciation
• Provision for site restoration

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6.3 Real Estate & Property (IFRS 13, IFRS 15, IFRS 16)

Challenges:

• Fair value determination
• Revenue recognition for off-plan sales
• Lease accounting

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6.4 Banking & Finance (IFRS 9, IFRS 7, IFRS 13)

Challenges:

• Expected credit loss modeling
• Islamic finance treatment
• Hedge accounting

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6.5 Insurance (IFRS 17)

Challenges:

• Data collection
• Actuarial valuation
• Systems overhaul

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7. IFRS Disclosure Requirements for GCC Companies

GCC regulators increasingly focus on:

• Risk disclosures
• Revenue breakdowns
• Segment reporting
• Related-party transactions
• Fair value hierarchy
• ESG-related financial disclosures
• Credit risk and liquidity risk

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8. IFRS, Audits, and Internal Controls

IFRS compliance strengthens audit processes:

• Enhanced audit trail
• Better internal controls
• Easier KPI validation
• Improved financial statement reliability

Audit committees must:

• Oversee IFRS adoption
• Ensure disclosures meet regulatory expectations
• Monitor impairment and valuation judgments

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9. IFRS & Digital Transformation in the GCC

Technology is reshaping financial reporting:

• Cloud accounting systems
• AI-powered IFRS engines
• Digital audit tools
• Real-time analytics dashboards

Future trends include:

• Automated fair value models
• Blockchain-based contract tracking
• Smart compliance tools

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10. The Future of IFRS in the GCC (2024–2035)

10.1 Mandatory Sustainability Reporting (ISSB)

GCC countries will soon integrate IFRS Sustainability Disclosure Standards (IFRS S1 and S2).

10.2 Increased Enforcement

Regulators in Oman, UAE, and Saudi Arabia will:

• Impose stricter penalties
• Conduct more reviews
• Mandate stronger internal controls

10.3 Greater Transparency

More disclosures on:

• ESG
• Climate risks
• Cybersecurity
• Governance

10.4 Professionalization of Accounting Teams

Governments are investing in local talent development.

10.5 Harmonization Across GCC

A unified Gulf accounting approach may emerge.

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Conclusion

IFRS adoption has transformed the financial landscape of the GCC, aligning it with global best practices, enhancing transparency, and strengthening investor confidence. As Oman, UAE, Saudi Arabia, and other GCC states push forward with economic diversification, strong financial reporting will remain central to achieving their visions.

Companies that invest in:

• IFRS expertise
• Accurate data collection
• Robust systems
• Professional accounting teams
• Strong audit and internal control frameworks

will gain a critical competitive advantage in the evolving GCC marketplace.

IFRS is not just a regulatory requirement—it is a strategic asset, shaping how businesses operate, report, and grow in the modern GCC economy.