Cambodia's IFRS Roadmap

The National Accounting Council (NAC) of Cambodia has been leading a phased transition to full International Financial Reporting Standards (IFRS) adoption. This aligns Cambodia with international best practices and improves the credibility of financial reporting for investors, lenders, and regulators.

Cambodia currently uses the Cambodian International Financial Reporting Standards (CIFRS), which are largely based on IFRS but with certain local modifications permitted for non-public entities.

Phased Implementation Timeline

Phase 1 — Public Interest Entities (PIEs)

Banks, insurance companies, microfinance institutions, and entities listed or planning to list on the Cambodia Securities Exchange (CSX) are classified as Public Interest Entities. They are required to apply full IFRS for financial reporting periods beginning on or after 1 January 2023.

PIEs must publish audited financial statements within 90 days of year-end (for publicly listed companies) or 180 days (for non-listed PIEs).

Phase 2 — Large Non-PIE Entities

Entities with total assets exceeding USD 10 million, annual revenue exceeding USD 5 million, or more than 300 employees are required to adopt CIFRS — the full local version closely aligned with IFRS — for periods beginning 1 January 2024.

Phase 3 — SME Entities

Small and medium entities may apply the simplified CIFRS for SMEs framework. While the NAC has not yet mandated a specific adoption date for smaller entities, businesses preparing for growth and eventual external financing should consider proactive early adoption.

Key Areas of Change

For businesses transitioning from prior local GAAP, the most significant changes typically involve:

  • IFRS 16 (Leases): Operating leases must now be recognized on the balance sheet as right-of-use assets and corresponding lease liabilities — significantly affecting businesses with substantial rental arrangements.
  • IFRS 9 (Financial Instruments): New expected credit loss model for impairment of receivables, requiring earlier recognition of potential credit losses.
  • IFRS 15 (Revenue Recognition): Five-step model for recognizing revenue from contracts with customers, which may change the timing of revenue recognition for long-term or bundled contracts.

Companies that prepare for IFRS adoption proactively — rather than reactively in the final months before the deadline — typically achieve a smoother transition with fewer restatements and less disruption to their annual reporting cycle.

Audit Requirements Under IFRS

Entities adopting full IFRS are required to have their financial statements audited by a registered external auditor. The audit must be conducted in accordance with International Standards on Auditing (ISA) and the auditor must express an opinion on whether the financial statements present fairly in all material respects.

Recommended Preparation Steps

  • Gap Analysis: Compare current accounting policies against IFRS requirements to identify areas requiring change
  • Data Collection: Gather historical data needed for transition adjustments, particularly for leases and financial instruments
  • System Assessment: Evaluate whether current accounting software can support IFRS reporting requirements
  • Staff Training: Ensure the finance team understands the new standards and their practical application
  • Opening Balance Sheet: Prepare a compliant IFRS opening balance sheet at the transition date

EP Partners provides IFRS transition advisory services including gap analysis, accounting policy drafting, and first-year financial statement preparation. Contact our team to discuss your entity's specific requirements.