{"id":302,"date":"2026-10-06T12:07:11","date_gmt":"2026-10-06T12:07:11","guid":{"rendered":"https:\/\/xactlegal.com\/blogs\/?p=302"},"modified":"2026-10-06T12:07:12","modified_gmt":"2026-10-06T12:07:12","slug":"finance-division-amends-soe-policy-to-strengthen-ifrs-compliance","status":"publish","type":"post","link":"https:\/\/xactlegal.com\/blogs\/finance-division-amends-soe-policy-to-strengthen-ifrs-compliance\/","title":{"rendered":"Finance Division Amends SOE Policy to Strengthen IFRS Compliance"},"content":{"rendered":"\n

Pakistan’s Finance Division<\/a> has amended the State-Owned Enterprises (SOEs) Ownership and Management Policy, 2023<\/a><\/strong> to strengthen the implementation of International Financial Reporting Standards (IFRS)<\/strong> across state-owned enterprises.<\/p>\n\n\n\n

The amendment introduces clearer financial reporting requirements while maintaining the regulatory authority of the State Bank of Pakistan (SBP).<\/a><\/p>\n\n\n\n

What Has Changed in the SOE Policy?<\/h2>\n\n\n\n

The amendment replaces Paragraph 31 of the SOEs Ownership and Management Policy 2023<\/strong> and establishes a revised framework for IFRS implementation.<\/p>\n\n\n\n

Under the amended policy, IFRS applicable to SOEs refers to the financial reporting standards notified by the Securities and Exchange Commission of Pakistan (SECP)<\/a><\/strong> under Section 225 of the Companies Act, 2017.<\/p>\n\n\n\n

This provides SOEs with a clearer and more consistent financial reporting framework.<\/p>\n\n\n\n

SECP Modifications Will Apply to SOEs<\/h2>\n\n\n\n

The revised policy also clarifies that modifications, exemptions or other financial reporting provisions granted by SECP<\/strong> to companies generally under Section 225 will also apply to SOEs registered under the Companies Act, 2017.<\/p>\n\n\n\n

This can help align SOE financial reporting with the wider corporate regulatory framework.<\/p>\n\n\n\n

SBP-Regulated Entities Have a Separate Framework<\/h2>\n\n\n\n

The amendment recognizes the specific regulatory position of entities governed by the State Bank of Pakistan<\/strong>.<\/p>\n\n\n\n

For SBP-regulated institutions, the statutory financial reporting framework prescribed by SBP under the Banking Companies Ordinance, 1962<\/strong> will prevail where there is an inconsistency with other financial reporting requirements.<\/p>\n\n\n\n

The amendment does not restrict SBP’s statutory powers or regulatory authority.<\/p>\n\n\n\n

Finance Division to Develop Financial Management Framework<\/h2>\n\n\n\n

The Finance Division has also been tasked with developing a detailed financial management framework for statutory SOEs<\/strong> in consultation with the Auditor General of Pakistan.<\/p>\n\n\n\n

The framework is expected to provide further guidance on financial management, reporting and oversight requirements.<\/p>\n\n\n\n

Stronger Internal Audit Requirements<\/h2>\n\n\n\n

The amended policy emphasizes the establishment of appropriate internal audit procedures and mechanisms<\/strong> in accordance with the State-Owned Enterprises (Governance and Operations) Act, 2023<\/strong>.<\/p>\n\n\n\n

This places greater focus on:<\/p>\n\n\n\n