FD notifies policy amendment: SOEs’ reporting brought in line with IFRS

ISLAMABAD: The government has amended the State-Owned Enterprises (Ownership and Management) Policy, 2023 to bring financial reporting of state-owned enterprises (SOEs) in line with International Financial Reporting Standards (IFRS), while retaining the State Bank of Pakistan’s (SBP) statutory reporting framework for entities under its regulation.

The Finance Division, through a notification issued on Friday approved amendments to paragraph 31 of the SOEs (Ownership and Management) Policy, 2023 under the State-Owned Enterprises (Governance and Operations) Act, 2023.

Under the amended policy, “International Financial Reporting Standards” for the purposes of the SOEs Act, 2023 will mean the Financial Reporting Standards notified by the Securities and Exchange Commission of Pakistan (SECP) from time to time under Section 225 of the Companies Act, 2017.

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The amendment, however, provides a specific carve-out for entities regulated by the SBP.

For such entities, the statutory financial reporting framework prescribed by the central bank under the Banking Companies Ordinance, 1962—including its circulars, directives and instructions—will take precedence and prevail to the extent of any inconsistency with the IFRS framework.

The government has also clarified the treatment of SECP-approved modifications and exemptions in implementation of IFRS.

According to the amended policy, any modifications or exemptions granted by the SECP to companies generally under Section 225 of the Companies Act, 2017 will also apply to SOEs registered with the SECP under the Companies Act.

However, the provision will not affect the statutory powers, functions or instructions of the SBP in relation to entities regulated by it, which will continue to have an overriding effect as mandated under the SBP Act, 1956.

The amendment also assigns a new financial management responsibility to the Finance Division.

The Finance Division, in consultation with the Auditor General of Pakistan (AGP), has been mandated to issue a detailed framework for the financial management of statutory SOEs.

At the same time, all SOEs will be required to establish internal audit procedures and mechanisms in accordance with Sections 19 and 20 of the State-Owned Enterprises (Governance and Operations) Act, 2023.

The notification said the details of the new financial management arrangements are contained in Annexure 6 of the amended policy.

The move effectively establishes a common IFRS-based reporting reference for SOEs registered under the Companies Act while preserving sector-specific regulatory requirements of the central bank.

The amendment has been approved by the federal government vide Case No. 723/Rule-19/2026/862 dated September 30, 2026 and notified by the Finance Division on October 2, 2026.

Copyright Business Recorder, 2026