Ey Ifrs Adoption in Kingdom of Saudi Arabia

IFRS adoption
in Kingdom of Saudi
Arabia
December 2017
Contents
Introduction 3
Executive summary 5
Effects of IFRS adoption:

• Effects on retained earnings
7
• Effects on assets
• Effects on liabilities
Key IFRS 1 exemptions utilized 11
Early adoption of IFRS 9 and IFRS 15 14
Appendices 16
Disclaimer
This document provides a summary of our key observations on the IFRS adoption in KSA.
The contents of this document comprise information published by individual companies in Tadawul website.
Our analysis is based on the completeness and accuracy of the facts and figures published on Tadawul website.
Other than to the extent required for the purpose of this report, this information has not been independently
verified.
The analysis made in this report are based on the published financial statements of the concerned companies for
the first quarter under IFRS ended on 31 March 2017. We will not update our report for subsequent changes or
modifications to laws, regulations and IFRS.
01
Introduction
Introduction
About this report

The International Accounting Standards Board (IASB) is now on track to achieve the vision of one global
accounting standard. Adhering to the vision of IASB, the Saudi Organization for Certified Public Accountants
(SOCPA) had decided to apply International Financial Reporting Standards as endorsed in Kingdom of Saudi
Arabia (referred hereafter as IFRSs) to all listed and unlisted companies.
Mandatory dates of transition

companies
Date of transition to IFRS Comparative information Reporting date

Listed
1 Jan 2016 31 Dec 2016 31 Dec 2017
Date of transition to IFRS Comparative information Reporting date

companies*
Unlisted
1 Jan 2017 31 Dec 2017 31 Dec 2018

Unlisted companies have an option to early adopt along with listed companies
*Unlisted companies not acting in fiduciary capacity can choose either to apply IFRS for SMEs as endorsed in Kingdom of Saudi Arabia or full
set of IFRS.
4
12
Based on the transition date
decided by SOCPA, listed
33
companies were required to
publish their Q1 financial
statements for FY17 in 123 4
accordance with IFRS. As of
31 December 2016, there
were 176 listed companies on
Tadawul. Banking Diversified financials Insurance REIT Other Sectors
Companies in ‘other sectors’ that had published Q1 results under IFRS

107
Q1 IFRS financial statements not available due to Hijri calendar or other than 31
16 December year end
This report is an analysis of the IFRS adoption by the Kingdom of Saudi Arabia (KSA) based on
the Q1 financial statements as of 31 March 2017, published on Tadawul by these 107 equity
listed companies in fifteen (15) sectors (see Appendix I for detailed description of sectors).
The analysis is extended further at the sector level as shown in Appendix VI.
All Rights Reserved — EY IFRS adoption in KSA 4

02
Executive summary
Executive summary
By issuing the Q1 results in IFRS, the listed companies have successfully put their initial step in this
transition. It is now time to evaluate the status of IFRS transition and its impact on the overall financial
position of the company as well as different sectors based on the published financial statements.
This report is evaluating the IFRS adoption in KSA based on the analysis of published financial statements of
107 companies under three focus areas and the major observations are as follows:
Effects of IFRS adoption
Retained earnings decreased for all sectors except Media, Retailing

01 and Utilities.
02 Materials sector had the highest decrease of SAR12,162m

(31.6%).
Retained earnings:
SAR18,116m
(12.4%)
03 There is a net increase in the value of asset by SAR2,986m.
The net increase in liabilities as a result of IFRS adoption is

SR17,615m.
04
05 Appendix VI illustrates certain sector-wise impact of
IFRS adoption.
Major IFRS 1 exemptions utilized

Key exemptions utilized are:
• IFRS 3 (Business combinations)
48 Companies utilized
the exemptions
•
•
IAS 21 (Cumulative translation differences)
IAS 23 (Borrowing costs)
• IFRIC 4 (Arrangements containing a lease)
Early adoption of IFRS 9 and IFRS 15
IFRS 9 IFRS 15
These companies belong to consumer durables and
apparels, capital goods, energy, material, real estate,
retailing and transportation sectors.
10 Companies 07 Companies

03
• Effects on retained earnings
• Effects on assets
• Effects on liabilities
Retained earnings SAR18,116m

at the date of transition
Impact on retained earnings (SARm): App. II
70,000
35,000
30,000
15,000
10,000
5,000
773
0
(1,598) (1,009) (669) (861)

(2,591)
(12,162)
Food and Tele-
–15,000 Material Capital goods Real estate beverage communication Utilities Other sectors
Sum of RE on date of transition (SOCPA) Sum of RE (IFRS) Net impact
The impact on retained earnings is

primarily due to increased liabilities.
Asset 2,986m (App. III) There was a decrease in retained
earnings for all, except media, retailing
and utilities sectors.
Material sector has the highest impact
due to adjustments in Goodwill and PPE.
Liability (17,615m) (App. IV)
Utilities sector has the highest net
increase in retained earnings
(SAR773m).
IFRS adoption has an insignificant
Other components
of equity*
(3,487m) impact on the media, retailing and
commercial and professional services
sectors.
*Adjustments to other components of equity (non-controlling interest, foreign currency translation reserve and
other reserves)

Effects of IFRS adoption (contd)
Impact on assets (SARm) at the date of transition: see App. III for detailed analysis
16,500
15,028
1.500
693
1.000
500
0
-500
–1,000
(1,256) (643)
(531)
–1,500
(2,205)
–2,000
–2,500
–3,000
–3,500
–4,000
–8,500 (8,099)
Tele- Food &
Material Real estate Capital goods
communication Other sectors Beverages Utilities
PPE Advances and prepayments Other assets

Investment in other companies Goodwill Total adjustments
The following table highlights the net effect on selective categories of assets
(all sectors combined).
SARm
IFRS adoption had a 1 PPE 13,371
net increase of 2 Advances and prepayments 4,651
SAR2,986m on the
3 Investment properties 1,948
assets of the
4 Investment in other companies (4,288)
companies
considered. Utilities 5 Goodwill (3,131)
sector had the 1. Utilities sector has a net increase of SAR16,205m in PPE whereas other sectors generally
reported a decrease.
highest net increase 2. Utilities sector has the highest increase in assets of SAR4,974m. Other sectors generally had
and materials sector a decreasing effect in advances and prepayments.
3. Retailing (SAR692m), consumer services (SAR544m) and utilities (SAR539m) sectors had an
had the highest net increase on investment property whereas real estate sector noted a decrease by SAR873m.
decrease. 4. Utilities (SAR1,965m), material (SAR1,326m) and telecommunication (SAR487m) are the
mainly affected sectors of investment in other companies.
5. The entire adjustment in goodwill is related one material sector entity.

Effects of IFRS adoption (contd)
Impact on liabilities (SARm) at the date of transition: see App. IV for detailed analysis
46,500 14,194
3,500 3,389
2,500
2,000
1,500
1,000
554
500 247
88
0
–500 (149)
–1,000 (709)
–53,500
Real estate Capital goods Other sectors Tele- Food and Material Utilities
communications beverages
Loans Government grants Payables

Employee benefits Other liabilities Total adjustment to liabilities
The following table highlights the net effect on different categories of

IFRS adoption had liabilities (all sectors combined).
increased the SARm
liabilities by 1 Government grants 46,091
SAR17,615m in the
2 Loans 9,015
financial statements
3 Other liabilities 5,503
of the companies
considered. Utilities 4 Employee benefits 5,090
sector had the 5 Payables (49,998)

highest net upward 1. Utilities sector has an increase of SAR46,035m in government grants due to reclassification
from long-term governmental payables of SAR42,346m of an entity.
movement and 2. Utilities sector has the highest impact of SAR8,683m along with telecommunication
real estate sector (SAR1,294m). Loans in material sector reduced by SAR1,042m.
3. Utilities sector marked the highest increase in other liabilities (SAR12,048m) whereas other
had the highest sectors reported a reduction in general.
downward 4. Majority of sectors marked an increase in employee benefits and material sector has a
considerable increase by SAR3,738m.
movement. 5. Decrease in payables was mainly contributed by utilities sector (SAR53,372m).

04
Major IFRS 1
exemptions utilized
Major IFRS 1 exemptions utilized
48 companies used exemptions

IFRS 1 lists some optional exemptions which companies can
use during their first time transition to IFRS. Forty-eight
companies used these exemptions. One entity in
telecommunication sector used the maximum number
of exemptions (six).
Most of the companies had used exemption for IFRS 3

Business Combinations (33 companies).
Optional exemptions utilized
1
11 IFRS 2 (Share-based payments)
3 IFRS 3 (Business combinations)
4 IFRS 9 / IAS 39 (Financial instruments)

33
IAS 16 (Assets deemed cost)
IAS 21 (Cumulative translation differences)

13
IAS 23 (Borrowing costs)
IAS 28 (Group, subsidiary, associate and joint

venture transition dates)
IFRIC 1 (Decommissioning liabilities)
4
13 IFRIC 4 (Arrangements containing a lease)
8
The numbers represent the number of companies using the respective exemptions

Major IFRS 1 exemptions utilized (contd)
Sector-wise analysis (exemptions utilised)
12
11
10
9
8
7
6
5
4
3
2
1
0
Material Capital goods Consumer services Telecommunication Other sectors
IFRS 3 IAS 16 IAS 21 IAS 23 IFRIC 4 Other exemptions
All sectors utilized the exemptions except the commercial and professional services sector.
Materials sector utilized the maximum number of exemptions as an individual sector
(28 exemptions by 15 companies). The exemptions for IFRS 3 (business combinations) was
utilized by most of the companies and the least utilized exemption was IFRS 2 (share-based
payments). For a detailed analysis of IFRS 1 exemptions utilized, refer Appendix V.
Sector-wise analysis (number of companies)

39
32
18
15
12 11
6 6 7
4 3 2
Material Capital goods Health care Real estate Food & beverages Other sectors
equipment &
services
No:of Companies used exemption Total no: of companies

05
Early adoption of
IFRS 9 and IFRS 15
Early adoption of IFRS 9 and IFRS 15
IFRS 9 10 companies
IFRS 15 07 companies
In May 2014,the IASB issued
IFRS 15 Revenue The companies which early adopted IFRS
from Contracts with 9 belongs to consumer durables and
Customers that will supersede apparels, capital goods, energy,
virtually all revenue material, real estate, retailing and
recognition transportation sectors.
requirements under IFRS and
become effective from 1 IFRS 15 has been early adopted by
January 2018 with early companies in the consumer durables and
adoption permitted. In July apparels, capital goods, material,
2014, the IASB issued IFRS 9 real estate and transportation sectors.
Financial Instruments,
replacing IAS 39 Financial
Instruments:
Recognition and
Measurement. The standard is
effective for annual periods
beginning on or after
1 January 2018,
with early
adoption permitted.

06
Appendices
Index
I Sector description 18
II Retained earnings analysis 21
III Assets analysis 22
IV Liabilities analysis 23
V Exemptions utilized 24
VI Sector analysis 25

Appendix I
Sector description
Tadawul’s market structure is classified based on the Level 2 classification under Global
Industry Classification Standard (GICS)*. The details of the sectors considered for the analysis
are given in the alphabetical order here:
Capital goods (12 companies)
It consists of:
• Aerospace and defense
• Building products
• Construction and engineering
• Electrical equipment
• Industrial conglomerates
• Machinery
• Trading companies and distributors
Electrical equipment includes: electrical components and equipment, heavy electrical equipment.
Machinery includes: Construction machinery and heavy trucks, agricultural and farm machinery,
and industrial machinery.
Commercial and professional services (1 company)

It consists of:
• Commercial services and supplies
• Professional services
Commercial services and supplies includes: commercial printing, environmental and facilities services,
office services and supplies, diversified support services, and security and alarm services. Professional
services includes human resource and employment services, research and consulting services.
Consumer durables and apparel (4 companies)

It consists of:
• Household durables
• Leisure products
• Textiles, apparel and luxury goods
Household durables includes: commercial printing, environmental and facilities services, office services
and supplies, diversified support services, and security and alarm services. Professional services includes
human resource and employment services, and research and consulting services.
Consumer services (5 companies)

It consists of:
• Hotels, restaurants and leisure
• Diversified consumer services
Hotels, restaurants and leisure includes: casinos and gaming, hotels, resorts and cruise lines, leisure
facilities and restaurants. Diversified consumer services include education services and specialized
consumer services.
*The Global Industry Classification Standard (GICS) is an industry taxonomy developed in 1999 by MSCI and
Standard & Poor's (S&P) for use by the global financial community.

Appendix I (contd)
Sector description
Energy (4 companies)
It consists of:
• Energy equipment and services
• Oil, gas and consumable fuels
Energy equipment and services includes: oil and gas drilling, oil and gas equipment and services. Oil, gas
and consumable fuels includes integrated oil and gas, oil and gas exploration and production, oil and gas
refining and marketing, oil and gas storage and transportation, and coal and consumable fuels.
Food and beverages (11 companies)

It consists of:
• Beverages
• Food products
• Tobacco
Beverages includes: brewers, distillers and vintners, and soft drinks. Food products includes agricultural
products, and packaged foods and meats.
Food and staples retailing (4 companies)

It includes: drug retail, food distributors, food retail, and hypermarkets and super centers.
Health care equipment and services (6 companies)

It consists of:
• Health care equipment and supplies
• Health care providers and services
• Health care technology
• Pharmaceuticals
• Life sciences tools and services
Health care equipment and supplies includes: health care equipment and health care supplies. Health care
providers and services includes health care distributors, health care services, health care facilities and
managed health care.
Materials (39 companies)

It consists of:
• Chemicals
• Construction materials
• Containers and packaging
• Metals and mining
• Paper and forest products
Chemicals includes: commodity chemicals, diversified chemicals, fertilizers and agricultural chemicals,
industrial gases and specialty chemicals. Containers and packaging includes metal and glass containers
and paper packaging. Metals and mining includes aluminum, diversified metals and mining, copper, gold,
precious metals and minerals, silver and steel industries. Paper and forest products includes forest
products and paper products.

Appendix I (contd)
Sector description
Media (1 company)
Media includes: advertising, broadcasting, cable and satellite, movies and entertainment, and publishing.
Real estate (7 companies)

It includes: diversified Real estate activities, real estate operating companies, real estate development and
real estate services.
Retailing (5 companies)
It consists of:
• Distributors
• Internet and direct marketing retail
• Multiline retail
• Specialty retail
Multiline retail includes: department stores and general merchandise store. Specialty retail includes apparel
retail, computer and electronics retail, home improvement retail, specialty stores, automotive retail and
home furnishing retail.
Telecommunication services (3 companies)

It consists of:
• Diversified telecommunication services
• Wireless telecommunication services
Diversified telecommunication services includes: alternative carriers and integrated telecommunication
services.
Transportation (3 companies)
It consists of:
• Air freight and logistics
• Airlines
• Marine
• Road and rail
• Transportation Infrastructure
Road and rail includes: railroads and trucking. Transportation infrastructure includes airport services,
highways and rail tracks, and marine ports and services.
Utilities (2 companies)
It consists of:
• Electric utilities
• Gas utilities
• Multi-utilities
• Water utilities
• Independent power and renewable electricity producers
Independent power and renewable electricity producers includes: independent power producers and energy
traders, and renewable electricity.

Appendix II
Retained earnings analysis

Retained earnings % of net change
on date of transition Retained earning Net change over retained
Sectors (SOCPA) SARm (IFRS) SARm SARm earning (SOCPA)
Real estate 2,137 539 (1,598) (74.80)%
Capital goods 5,123 2,531 (2,591) (50.60)%
Material 38,546 26,385 (12,161) (31.55)%
Consumer durables 275 207 (68) (24.40)%

and apparel
Energy 2,857 2,416 (441) (15.50)%
Food and beverages 7,992 6,983 (1,009) (12.60)%
Health care equipment 1,863 1,685 (178) (9.60)%

and services
Transportation 918 848 (70) (7.60)%
Consumer services 2,005 1,882 (123) (6.10)%
Food and staples 724 703 (21) (2.90)%

retailing
Telecommunication 65,894 65,225 (669) (1.00)%
Commercial and 212 211 (1) 0.00%

professional services
Media (99) (96) 3 3. 0%
Retailing 1,016 1,054 38 3.70%
Utilities 16,068 16,842 773 4.80%
Total 145,531 127,415 (18,116) (12.45)%

Appendix III
Assets analysis
All figures are in SARm with rounding off exception
Advances and Investment Available for sale Deferred Held to

Sectors PPE prepayments properties Receivables investments tax maturity Cash
Capital goods 487 (163) 8 (19) 88 – – (27)

Commercial and – – – – – – – –
Consumer durables (3) – – (13) 84 – – –
and apparel
Net increase in assets
Consumer services (546) (119) 544 104 – 3 – –

Energy (282) – – (70) – – – –
Food and beverages 941 (40) 368 (247) (28) – – (20)
Food and staples (216) (56) 170 (18) (1) – – (6)
retailing
Health care equipment 10 19 – (86) – 18 – (5)
and services
Material (1,658) 143 194 32 149 271 – –
Media (6) – – – – – – –
Real estate (719) (17) (873) (44) 233 – – 2
Retailing (735) (69) 692 63 99 – – –
Telecommunication 221 – – 1,563 (12) – – –
Transportation (327) (22) 307 47 (17) – – –
Utilities 16,205 4,974 539 – 282 – 210 193
Total 13,371 4,651 1,948 1,311 878 292 210 136
Investment Total
Biological Intangible Loans to in other Other adjustment
Sectors assets assets Inventories others Goodwill companies assets to assets
Capital goods – (4) (98) (66) – (78) (1,385) (1,256)
Commercial and – – (21) – – – – (21)

Consumer durables and – – 9 – – (150) – (72)
apparel
Net decrease in assets
Consumer services – – – – – (2) – (16)
Energy – – – (37) – – (13) (403)

Food and beverages 36 86 1 – – (371) (35) 693
Food and staples retailing 1 2 (35) – – 43 – (116)
Health care equipment and – 4 (67) – – 35 – (73)

services
Material – (121) (293) (832) (3,131) (1,326) (1,527) (8,099)
Media – 7 (4) – – – – (3)
Real estate (49) 17 – – – (1) (754) (2,205)
Retailing – 3 – – – – (7) 46
Telecommunication – (352) – – – (487) (1,464) (531)
Transportation – 22 – – – 13 (8) 15
Utilities – 157 98 (860) – (1,965) (4,804) 15,028
Total (12) (180) (410) (1,795) (3,131) (4,288) (9,997) 2,986

Appendix IV
Liabilities analysis
All figures are in SARm with rounding off exception
Provision for
Government Other Employee Deferred Tax Capital
Loans decommissioning
Sectors grants liabilities benefits income liabilities leases
liability
Capital goods – (114) (256) 95 – 14 21 –
Commercial and – – – – – – – –
Consumer durables – – – 5 – – – –
Net increase in liabilities
and apparel
Consumer services – – (1,431) 40 1,063 – 8 68
Energy – – – 71 – – – –
Food and beverages 14 268 18 219 (181) 97 24 –
Food and staples – – (16) – – – (1) –
retailing
Health care equipment 42 (59) 110 46 18 – (3) –
and services
Material – (1,042) 23 3,738 – 174 482 88
Media – – – (3) – – – –
Real Estate – (15) (702) 23 (8) – – –
Retailing – – (110) 43 (2) – – –
Telecommunication – 1,294 (4,054) (329) 198 336 – –
Transportation – – (81) 75 18 – – –
Utilities 46,035 8,683 12,048 1,067 (268) – – –
Total 46,091 9,015 5,503 5,090 837 621 531 156
Total adjustment to
Sector Dividends due Due to related parties Payables liabilities
Capital goods 6 (6) 91 (149)
Commercial and – – (21) (21)
Consumer durables and apparel – – – 5
Consumer services – – 246 (6)
Net decrease in liabilities
Energy – – 16 87
Food and beverages – – 97 554
Food and staples retailing – – (43) (59)
Health care equipment and services (10) – (7) 136
Material – (137) 109 3,389
Media – – – (3)
Real estate – – (8) (709)
Retailing – – 95 27
Telecommunication – – 2,644 88
Transportation (85) – 154 81
Utilities – – (53,372) 14,194
Total (90) (143) (49,998) 17,615

Appendix V
IFRS 1 Exemptions utilized

IFRS 9/ IFRIC
Sectors IFRS 2 IFRS 3 IAS 39 IAS 16 IAS 21 IAS 23 IAS 28 IFRIC 1 4
Capital goods 6 4 1 1
Commercial and
professional
services
Consumer durables 1 1
and apparel
Consumer services 3 1 2 1 2
Energy 1 1 1
Food and beverages 2 1
Food and staples 1 1 1 1

retailing
Health care 3 1 2 1
equipment and
services
Material 1 10 3 2 2 4 1 2 3
Media 1 1 1
Real estate 1
Retailing 2 1 1 1 1
Telecommunication 2 1 1 1 1 1 1
Transportation 2 1
Utilities 1
Grand total 1 33 4 8 13 13 4 3 11

Appendix VI
Sector analysis
Sl. no. Sector Page no.
1 Capital goods 27
2 Commercial and professional services 29
3 Consumer durables and apparel 30
4 Consumer services 32
5 Energy 34
6 Food and beverages 35
7 Food and staples retailing 38
8 Health care equipment and services 41
9 Material 44
10 Media 48
11 Real estate 49
12 Retailing 51
13 Telecommunication 53
14 Transportation 55
15 Utilities 57

Appendix VI (contd)
Sector analysis
Capital goods
Total adjustment Total adjustment to

Sl. no Company name Change in RE % to assets liabilities
1 Capital goods A –94% (774,359) 87,777
2 Capital goods B –51% (453,843) (277,848)
3 Capital goods C –36% – –
4 Capital goods D –20% (24,669) 17,423
5 Capital goods E –16% (12,671) 17,613
6 Capital goods F –14% – 8,786
7 Capital goods G –12% (1,105) 3,378
8 Capital goods H 95% 39,566 (1,767)
9 Capital goods I –6% – 8,340
10 Capital goods J –5% (14,807) (1,003)
11 Capital goods K 0% (11,132) (11,577)
12 Capital goods L 1% (3,100) (262)

Appendix VI (contd)
Sector analysis
Capital goods (contd)
Impact on retained earnings (SARm): Capital goods
6,000 5,123
4,000
2,531
2,000 Sum of RE on date of transition (SOCPA)
Sum of RE (IFRS)
0 Net impact
(2,000)
(2,591)
(4,000)
Impact on assets (SARm): Capital goods

500 487
88
50
8
0
(4)
(19) (27)
–50
(66)
–100 (78)
(98)
–150 (1,256)
(163)
–1,300
–1,350
–1,400 (1,385)
PPE Available for sale investments Loans to others

Advances and prepayments Cash Investment in other companies
Investment properties Intangible assets Other assets
Receivables Inventories Total adjustments to assets

Appendix VI (contd)
Sector analysis
Capital goods (contd)
Impact on liabilities (SARm): Capital goods
95 91
100
50 14 21
6
0
(6)
(50)
(100) (149)
(150) (114)
(200)
(250)
(256)
(300)
Loans Provision for decommissioning liability Due to related parties

Other liabilities Tax liabilities Payables
Employee benefits Dividends due Total adjustment to liabilities

Appendix VI (contd)
Sector analysis
Commercial and professional services
Total adjustment Total adjustment

Sl. no Company name Change in RE % to assets to liabilities
1 Commercial and professional services A –0.20% (21,115) (20,698)
Impact on retained earnings (SARm): Commercial and professional services
212
212.0
211.5
211.0 211
0.0
–0.5
–1.0
(1)
Impact on assets (SARm): Impact on liabilities (SARm):

Commercial and professional services Commercial and professional services
0 0
(4) (4)
(8) (8)
(12) (12)
(16) (16)
(21) (21)
(20) (20)
(21)
(21)
(24) (24)
Inventories Total adjustment to assets Payables Total adjustment to liabilities

Appendix VI (contd)
Sector analysis
Consumer durables and apparels

1 Consumer durables and apparels A –35% (53) 1
2 Consumer durables and apparels B –14% (19) 5
3 Consumer durables and apparels C –1% – (1)
4 Consumer durables and apparels D 0% – (0)
Impact on retained earnings (SARm): Consumer durables and apparels
300 275
250
207
200
150
100
50
(50)
(68)
(100)

Appendix VI (contd)
Sector analysis
Consumer durables and apparels (contd)
Impact on assets (SARm): Impact on liabilities (SARm):

Consumer durables and apparels Consumer durables and apparels
85 84 6
9
5
5
5
5
0 3
(3)
-5 2
-10
0
(72)
(13)
–150 (1)
(150)
PPE Employee benefits

Receivables Total adjustments to liabilities
Available for sale investments
Inventories
Investment in other companies
Total adjustment to assets

Appendix VI (contd)
Sector analysis
Consumer services

1 Consumer services A –48% (2) 72
2 Consumer services B –6% (10) (0)
3 Consumer services C –6% 2 5
4 Consumer services D –5% (6) 1
5 Consumer services E –2% 0 (83)
Impact on retained earnings (SARm): Consumer services
2,100
2,005
2,000 1,882
1,900
0
-100
–200 (123)

Appendix VI (contd)
Sector analysis
Consumer services (contd)
Impact on assets (SARm): Consumer services
550 544
104
100
50
3
0
(2)
–50 (16)
–100
–550 (119)
(546)
PPE Receivables Total adjustment to assets
Advances and prepayments Deferred tax
Investment prop Investment in other companies
Impact on liabilities (SARm): Consumer services
1,070 1,063
246
68
60
50
40
40
30
20
10 8
0
–6
–1,440 –1,431
Other liabilities Deferred income Capital leases Total adjustment to liabilities

Employee benefits Tax liabilities Payables

Appendix VI (contd)
Sector analysis
Energy

1 Energy A –11% (13) 4
2 Energy B –11% (352) 27
3 Energy C 19% (37) 55
4 Energy D 0% – –
Impact on retained earnings (SARm): Energy
3,000 2,857
2,416
2,500
–500 (441)
Impact on assets (SARm): Energy Impact on liabilities (SARm): Energy
0 100 87
(13)
(37)
(70) 80 71
(150)
60
40
(300) (282)
16
20
(450) (403) 0
PPE Loans to others Total adjustment Employee benefits Payables
Receivables Other assets to asset Total adjustment to liabilities

Appendix VI (contd)
Sector analysis
Food and beverages

1 Food and beverages A –1263% 194 10
2 Food and beverages B –370% 18 2
3 Food and beverages C –31% 480 456
4 Food and beverages D 192% 28 39
5 Food and beverages E –5% (16) (4)
6 Food and beverages F –2% – 3
7 Food and beverages G –1% (2) 46
8 Food and beverages H 0% 1 2
9 Food and beverages I 0% (0) (0)
10 Food and beverages J 4% (0) 0
11 Food and beverages K 5% (10) –
Impact on retained earnings (SARm): Food and beverages

7,992
8,000
7,500
6,983
7,000
–500
–1,000
(1,009)
–1,500

Appendix VI (contd)
Sector analysis
Food and beverages (contd)
Impact on assets (SARm): Food and beverages
1,000
941
900
800
693
700 368
86
36
1
0
(28) (20)
(40) (35)
(247)
–300
–400 (371)
PPE Investment properties Available for sale investments
Advances and prepayments Receivables Cash
Biological assets Inventories Other assets
Intangible assets Investment in other companies Total adjustment to assets

Appendix VI (contd)
Sector analysis
Food and beverages (contd)
Impact on liabilities (SARm): Food and beverages
600 554
500
400
300 268
219
97 97
14 18 24
0
–100
–200 –181
Government grants Employee benefits Tax liabilities
Loans Deferred income Payables
Other liabilities Provision for decommissioning liability Total adjustment to liabilities

Appendix VI (contd)
Sector analysis
Food and staples retailing

Sl. no Co.name Change in RE % to assets to liabilities
1 Food and staples retailing A 69% (9) 1
2 Food and staples retailing B –1% (106) (66)
3 Food and staples retailing C –6% (1) 6
4 Food and staples retailing D 0% – –
Impact on retained earnings (SARm): Food and staples retailing
730 724
720
710 703
–10
–20
(21)
–30

Appendix VI (contd)
Sector analysis
Food and staples retailing (contd)
Impact on assets (SARm): Food and staples retailing (contd)
170
170 43
40
20
20
10 1 2
0
(1)
–10 (6)
–20 (18)
–30
(35)
–40
–50
(56)
(116)
–220 (216)
PPE Available for sale investments Inventories
Advances and prepayments Cash Investment in other Companies
Biological assets Total adjustment to assets

Investment properties
Receivables Intangible assets

Appendix VI (contd)
Sector analysis
Food and staples retailing (contd)
Impact on liabilities (SARm): Food and staples retailing
0
–1
–5
–10
–15
–16
–45 –43
–50
–55
–59
–60
Other liabilities Tax liabilities Payables Total adjustment to liabilities

Appendix VI (contd)
Sector analysis
Health care equipment and services

1 Health care equipment and services A –72% (127) 121
2 Health care equipment and services B 15% 61 9
3 Health care equipment and services C –3% (4) 8
4 Health care equipment and services D –2% 6
5 Health care equipment and services E 1% (2) (6)
6 Health care equipment and services F 1% – (2)
Impact on retained earnings (SARm): Healthcare equipment and services
2,000
1,863
1,800 1,685
–200
(178)

Appendix VI (contd)
Sector analysis
Health care equipment and services (contd)
Impact on assets (SARm): Healthcare equipment and services
35
35
30
25
19 18
20
10
10
5 4
0
–5
(5)
–70
(67)
–75
(73)
–80
–85
(86)
–90
PPE Deferred tax Inventories
Receivables Intangible assets Total adjustment to Assets

Appendix VI (contd)
Sector analysis
Health care equipment and services (contd)
Impact on liabilities (SARm): Healthcare equipment and services
140 136
130
120 110
110 46
42
40
30
18
20
10
0
–3
–10 –7
–10
–20
–30
–40
–50
–60
–59
Government grants Employee benefits Dividends due
Loans Deferred Income Payables
Other liabilities Tax liabilities Total adjustment to liabilities

Appendix VI (contd)
Sector analysis
Material

1 Material A –1570% (18) 4
2 Material B –629% (115) 3
3 Material C –261% (3)
4 Material D –240% (164) 20
5 Material E –68% (313) –
6 Material F –65% (682) 80
7 Material G –58% (985) 85
8 Material H –57% (2,428) 2,896
9 Material I –50% (434) 24
10 Material J –33% (32) 1
11 Material K –30% (2,573) (312)
12 Material L –27% – 23
13 Material M –27% (113) 236
14 Material N –23% (11) 2
15 Material O –23% (242) (4)
16 Material P –21% (103) 33
17 Material Q –12% (35) 10
18 Material R –10% (92) 5
19 Material S 15% 250 (31)
20 Material T 22% (51) –
21 Material U –4% 148 85
22 Material V –3% (41) 227

Appendix VI (contd)
Sector analysis
Material (contd)

23 Material W –9% (5) –
24 Material X –8% (14) (2)
25 Material Y –4% 30 21
26 Material Z –4% – 3
27 Material AA –4% (19) 3
28 Material AB –4% (3) 6
29 Material AC –3% (6) –
30 Material AD –3% – 1
31 Material AE –2% – 2
32 Material AF –1% (5) –
33 Material AG –1% – 8
34 Material AH 0% 2 8
35 Material AI 0% (55) (55)
36 Material AJ 0% – –
37 Material AK 0% – –
38 Material AL 0% – –
39 Material AM 0% 11 9

Appendix VI (contd)
Sector analysis
Material (contd)
Impact on retained earnings (SARm): Material
45,000
38,546
40,000
35,000
30,000 26,385
25,000
20,000
15,000
10,000
5,000
0
5,000
10,000
15,000 (12,161)
Impact on assets (SARm): Material

400 271
143 194 149
200 32
0
–200 (121)
–400 (293)
–600
–800
–1,400 (832)
(1,326)
–1,600
(1,527)
(1,658) (8,099)
(3,131)
–8,200
PPE Deferred tax Investment in other countries
Advances and prepayments Intangible assets Other assets
Investment properties Inventories Total adjustment to assets
Receivables Loans to others
Available for sale investments Goodwill

Appendix VI (contd)
Sector analysis
Material (contd)
Impact on liabilities (SARm): Material
4,000
3,738
3,389
3,500
482
174 88 109
23
0
–137
–500
–1,000
(1,042)
–1,500
Loans Provision for decommissioning liability Due to Related Parties
Other Liabilities Tax liabilities Payables
Employee benefits Capital leases Total adjustment to Liabilities

Appendix VI (contd)
Sector analysis
Media

1 Media A –2.80% (2,644) (2,816)
Impact on retained earnings (SARm): Media

4 3
–96
(96)
–98
–100 (99)
Impact on assets (SARm): Media Impact on liabilities (SARm): Media
8 7 0,0
6 –0.5
4
–1.0
2
–1.5
0
–2.0
(2) (3)
(4) –2.5
(4) –3.0
(6)
(6) –3.0
–3.0
PPE Inventories
Employee benefits
Intangible assets Total adjustment to assets
Total adjustment to liabilities

Appendix VI (contd)
Sector analysis
Real estate

1 Real estate A –8551% (2,144) (697)
2 Real estate B –42% (71) 3
3 Real estate C –4% (56) 3
4 Real estate D –2% (2) (8)
5 Real estate E 0% – –
6 Real estate F 0% – –
7 Real estate G 4% 68 (10)
Impact on retained earnings (SARm): Real estate
2,500
2,137
539
500
0
–500
–1,000
–1500
(1,598)
–2,000

Appendix VI (contd)
Sector analysis
Real estate (contd)
Impact on assets (SARm): Real estate
240 233
17
10 2
0
(1)
–10
–20 (17)
–30
–40
(44)
–720 (49)
(719)
–730
–740
–750
(2,205) (754)
(873)
–2,210
PPE Available for sale investments Investment in other companies
Advances and prepayments Cash Other assets

Investment properties Biological assets Total adjustment to assets
Receivables Intangible assets
Impact on liabilities (SARm): Real estate

23
25
20
15
10
5
0
-5
–10 –8 –8
–15
–15
–705 –702
–710 –709
–702
Loans Employee benefits Payables
Other liabilities Deferred income Total adjustment to liabilities

Appendix VI (contd)
Sector analysis
Retailing

1 Retailing A 140% 70 –
2 Retailing B –7% (3) 23
3 Retailing C –4% (6) 1
4 Retailing D –3% (12) 5
5 Retailing E –1% (3) (2)
Impact on retained earnings (SARm): Retailing
1,054
1,060
1,040
1,016
1,020
38
20

Appendix VI (contd)
Sector analysis
Retailing (contd)
Impact on assets (SARm): Retailing
700
99
80
63
60
692
40
46
20
3
0
–20 (7)
–40
(735)
–60
(69)
–740
PPE Receivables Other assets
Advances and prepayments Available for sale investments Total adjustment to assets
Investment properties Intangible assets
Impact on liabilities (SARm): Retailing

95
100
50 43
27
0
–2
(50)
(100)
–110
(150)
Other liabilities Deferred income Total adjustment to liabilities

Employee benefits Payables

Appendix VI (contd)
Sector analysis
Telecommunication

1 Telecommunication A 0% (480) (258)
2 Telecommunication B 1% (132) (115)
3 Telecommunication C –7% 82 461
Impact on retained earnings (SARm): Telecommunication
66,000 65,894
65,500 65,225
–500
(669)
–1,000

Appendix VI (contd)
Sector analysis
Telecommunication (contd)
Impact on assets (SARm): Telecommunication
2,000
1,563
1,500
1,000
500 221
(12)
0
–500 (352)
(487)
–1,000 (531)
–1,500 (1,464)
PPE Intangible assets Total adjustment to assets
Receivables Investment in other companies
Available for sale investments Other assets
Impact on liabilities (SARm): Telecommunication
2.800 2,644
1,294
1,200
1,000
800
600
336
400 198
200 88
0
–200
-329
–4,200 -4,054
Loans Deferred income Total adjustment to liabilities

Other liabilities Provision for decommissioning liability
Employee benefits Payables

Appendix VI (contd)
Sector analysis
Transportation

1 Transportation A –14% (6) 67
2 Transportation B 2% 21 14
3 Transportation C 0% – –
Impact on retained earnings (SARm): Transportation
950 918
900
848
850
–50
–100 (70)

Appendix VI (contd)
Sector analysis
Transportation (contd)
Impact on assets (SARm): Transportation

310 307
47
40
30
22
20
13
10 15
0
–10
(8)
–20 (17)
(22)
–330 (327)
PPE Receivables Investment in other companies

Advances and prepayments Available for sale investments Other assets
Investment properties Intangible assets Total adjustment in assets
Impact on liabilities (SARm): Transportation
180 154
150
120
75 81
90
60
30 18
0
(30)
(60)
(90)
–81 –85
Other liabilities Deferred income Payables
Employee benefits Dividends due Total adjustment to liabilities

Appendix VI (contd)
Sector analysis
Utilities

1 Utilities A –77% – 17
2 Utilities B 5% 15,028 14,177
Impact on retained earnings (SARm): Utilities
17,000 16,842
16,500
16,068
773
500
0

Appendix VI (contd)
Sector analysis
Utilities (contd)
Impact on assets (SARm): Utilities
17,000
16,205
16,000 15,028
4,974
4,000
3,000
2,000
1,000 539 282 210 193 157 98
0
–1,000 (860)
(1,965)
–5,000 (4,804)
PPE Held to maturity Loans to others
Investment properties Intangible assets Other assets
Available for sale investments Inventories Total adjustment to assets
Impact on liabilities (SARm): Utilities
48,000 46,035
14,194
14,000 12,048
12,000
8,683
10,000
8,000
6,000
4,000
2,000 1,067
0
–268
–54,000 –53,372
Government grants Other liabilities Deferred income Total adjustment to liabilities

Loans Employee benefits Payables

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Ey Ifrs Adoption in Kingdom of Saudi Arabia

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IFRS adoption

Effects of IFRS adoption:

Key IFRS 1 exemptions utilized 11

Early adoption of IFRS 9 and IFRS 15 14

About this report

Mandatory dates of transition

Date of transition to IFRS Comparative information Reporting date

1 Jan 2016 31 Dec 2016 31 Dec 2017

Date of transition to IFRS Comparative information Reporting date

1 Jan 2017 31 Dec 2017 31 Dec 2018

Companies in ‘other sectors’ that had published Q1 results under IFRS

All Rights Reserved — EY IFRS adoption in KSA 4

Effects of IFRS adoption

Retained earnings decreased for all sectors except Media, Retailing

02 Materials sector had the highest decrease of SAR12,162m

The net increase in liabilities as a result of IFRS adoption is

Major IFRS 1 exemptions utilized

Early adoption of IFRS 9 and IFRS 15

All Rights Reserved — EY IFRS adoption in KSA 6

Retained earnings SAR18,116m

(1,598) (1,009) (669) (861)

Sum of RE on date of transition (SOCPA) Sum of RE (IFRS) Net impact

The impact on retained earnings is

All Rights Reserved — EY IFRS adoption in KSA 8

PPE Advances and prepayments Other assets

All Rights Reserved — EY IFRS adoption in KSA 9

Loans Government grants Payables

The following table highlights the net effect on different categories of

sector had the 5 Payables (49,998)

All Rights Reserved — EY IFRS adoption in KSA 10

48 companies used exemptions

Most of the companies had used exemption for IFRS 3

Optional exemptions utilized

3 IFRS 3 (Business combinations)

4 IFRS 9 / IAS 39 (Financial instruments)

IAS 21 (Cumulative translation differences)

IAS 28 (Group, subsidiary, associate and joint

All Rights Reserved — EY IFRS adoption in KSA 12

Sector-wise analysis (exemptions utilised)

IFRS 3 IAS 16 IAS 21 IAS 23 IFRIC 4 Other exemptions

Sector-wise analysis (number of companies)

No:of Companies used exemption Total no: of companies

All Rights Reserved — EY IFRS adoption in KSA 13

All Rights Reserved — EY IFRS adoption in KSA 15

II Retained earnings analysis 21

III Assets analysis 22

All Rights Reserved — EY IFRS adoption in KSA 17

Commercial and professional services (1 company)

Consumer durables and apparel (4 companies)

Consumer services (5 companies)

All Rights Reserved — EY IFRS adoption in KSA 18

Food and beverages (11 companies)

Food and staples retailing (4 companies)

Health care equipment and services (6 companies)

Materials (39 companies)

All Rights Reserved — EY IFRS adoption in KSA 19

Real estate (7 companies)

Telecommunication services (3 companies)

All Rights Reserved — EY IFRS adoption in KSA 20

Retained earnings analysis

Real estate 2,137 539 (1,598) (74.80)%

Capital goods 5,123 2,531 (2,591) (50.60)%

Material 38,546 26,385 (12,161) (31.55)%

Consumer durables 275 207 (68) (24.40)%