SIDC corrects SAR 132.9M accounting treatment for Ibn Rushd stake

Saudi Industrial Development Co. (SIDC) corrected an accounting treatment relates to its stake in Arabian Industrial Fibers Co. (Ibn Rushd), by reclassifying SAR 132.9 million from the accumulated losses account to the fair value reserve of financial assets through other comprehensive income (OCI).

This adjustment is made in accordance with the requirements of the International Financial Reporting Standards (IFRS).

In a statement to Tadawul, the company said this relates to its reclassification during the financial year ended Dec. 31, 2023, of the fair value reserve balance of financial assets measured at fair value through the OCI, associated with its invested stake in Ibn Rushd.

The balance of this reserve at the time of transfer amounted to SAR 132.9 million and had been moved to the accumulated losses account before derecognizing the related asset.

The company said the transferred amount will now be reclassified by reversing the accounting entry recorded at the end of 2023, thereby restoring the fair value reserve of financial assets through OCI within equity.

It added that the comparative financial statements for 2023 and 2024 will be restated when preparing the 2025 financial statements, with full disclosure of the nature and impact of the adjustment in accordance with IFRS.

SIDC said that the financial impact of this correction is limited to a reclassification within equity, with SAR 132.9 million moved from accumulated losses back to the fair value reserve of financial assets at fair value through OCI.

There will be no effect on operating activities, cash flows, assets, or liabilities, the statement added.

The company also clarified that the impact on retained earnings is not distributable as cash, as it arises from a reclassification due to correcting an accounting treatment rather than from realized operating profits. Moreover, it does not affect the company’s operational performance.

SIDC emphasized that the correction does not constitute a change in accounting policies or estimates.