Imagine accounting as a universal language spoken by major companies around the world

To be a skilled and in-demand professional in this field, you must master the rules of this language. The International Financial Reporting Standards (IFRS) are the core rules of that language. They may initially seem complex and extensive—especially when you’re preparing for a decisive exam like the SOCPA Accounting Technician exam.

Do you find it difficult to grasp these standards? Are you struggling to connect their academic wording with the practical questions you may face in the exam? You’re in the right place. We won’t drown you in endless details—we’ll give you a compass that points you directly to your destination.

In this article, we provide a simplified, practical explanation of the top 5 IFRS standards you should prioritize for the Accounting Technician exam, with clarification on how to apply them to likely real-world scenarios.

What you will learn in this guide

• A simplified yet deep understanding of the core IFRS standards: We’ll break down the complexities of the five most important standards you need.
• How to apply these standards to SOCPA exam questions: We’ll connect theory to practical application.
• Practical examples to reinforce concepts: You’ll find examples that make the standards more tangible and easier to grasp.

Section One: Introduction to IFRS

Before diving into the five standards, it’s important to establish a strong foundation for understanding what these standards are and why they have become so crucial in today’s accounting world—particularly in the Kingdom of Saudi Arabia.

What are IFRS?

International Financial Reporting Standards (IFRS) are a set of globally adopted accounting standards issued by the International Accounting Standards Board (IASB). Their purpose is to unify the language of accounting worldwide so that financial statements of companies in different countries are comparable and easily understood by investors, analysts, and other stakeholders. Simply put, they ensure everyone is “reading from the same page.”

The importance of IFRS for accountants

For you, as an ambitious accountant preparing for the SOCPA exam, understanding IFRS is not optional—it’s essential for the following reasons:

• Exam foundation: These standards comprise a large part of the “financial accounting” focus area in the Accounting Technician exam. Mastering them secures a significant portion of your score.
• Labor market requirement: Saudi companies—especially those listed on the stock market—are required to apply these standards. Knowing them makes you a highly valuable candidate.
• The language of modern business: Understanding the standards enables you to analyze and interpret the financial statements of any global company, opening broader professional horizons.

Interaction between international standards and Saudi accounting

Some may ask about the difference between “Saudi accounting standards” and international standards. The fact is that Saudi Arabia—represented by the Saudi Organization for Chartered and Professional Accountants (SOCPA)—has adopted IFRS as the standards applied to entities in the Kingdom. This means that the most important Saudi accounting standards are the same internationally adopted standards. Therefore, when you study IFRS, you are studying the standards actually implemented in the Saudi market.

Section Two: The Top 5 IFRS Standards You Must Know for the SOCPA Exam

Instead of spreading yourself thin across dozens of standards, focus your energy on these five, which form the cornerstone of many practical scenarios and likely exam questions.

IFRS 15 — Revenue from Contracts with Customers

Core idea: Determines “when” and “how” a company recognizes revenue—when control of a good or service transfers to the customer, in an amount that reflects the consideration expected.

What you need to know for the exam (the five-step model):

1. Identify the contract: Is there a clear contract with the customer?
2. Identify performance obligations: What specific goods or services have you promised to deliver?
3. Determine the transaction price: What amount do you expect to receive?
4. Allocate the price to the obligations: If the contract includes more than one service, how do you allocate the price among them?
5. Recognize revenue when (or as) performance is satisfied: When do you recognize revenue—upon transfer of each good or service?

Simple practical example: A telecom company sells a one-year internet plan with a “free” router. Under IFRS 15, the router is not truly “free.” The company must determine stand-alone prices for the router and the internet service as separate obligations, allocate the bundle price between them, recognize revenue for the router upon delivery, and recognize revenue for the internet service over the 12 months.

IFRS 16 — Leases

Core idea: Removes the old distinction between “operating” and “finance” leases from the lessee’s perspective. Most leases must appear on the lessee’s balance sheet.

What you need to know for the exam:

• Right-of-use (ROU) asset: Recognize an asset representing the right to use the leased property or equipment.
• Lease liability: Recognize a liability equal to the present value of future lease payments.

Simple practical example: A company leases an office for five years at SAR 100,000 annually. Instead of recording only rent expense each year, the company recognizes a “right-of-use asset” and a “lease liability” equal to the present value of the five years of lease payments.

IFRS 9 — Financial Instruments

Core idea: Covers classification and measurement of financial assets and liabilities, and expected credit loss calculations.

What you need to know for the exam (financial asset classification):

• Amortized cost: For assets held to collect contractual cash flows (e.g., bonds).
• FVOCI (fair value through other comprehensive income): For assets held to collect cash flows and possibly sell later.
• FVTPL (fair value through profit or loss): For assets held for trading (e.g., speculative equities).

Simple practical example: A company purchases government bonds and intends to hold them to maturity to collect interest and principal. Classify at amortized cost.

IAS 36 — Impairment of Assets

Note: More common in Accounting Technician exams than IFRS 13 and IFRS 3.

Core idea: Assets should not be carried above their recoverable amount.

What you need to know for the exam:

• Recoverable amount: The higher of fair value less costs of disposal and value in use.
• Impairment loss: If carrying amount > recoverable amount, recognize a loss for the difference.

Simple practical example: A machine’s carrying amount is SAR 200,000. Fair value is SAR 150,000; value in use is SAR 160,000. Recoverable amount = SAR 160,000 (higher). Recognize impairment loss = 200,000 − 160,000 = SAR 40,000.

IAS 16 — Property, Plant and Equipment (Fixed Assets)

Core idea: Accounting for fixed assets—initial recognition, subsequent measurement (cost or revaluation), depreciation, and derecognition.

What you need to know for the exam:

• Cost of the asset: Purchase price plus directly attributable costs to bring the asset to the location and condition necessary for use.
• Depreciation: Systematic allocation of cost over useful life (e.g., straight-line, declining balance).

Simple practical example: A car is purchased for SAR 120,000, useful life 5 years, residual value SAR 20,000. Straight-line depreciation = (120,000 − 20,000) ÷ 5 = SAR 20,000 per year.

Section Three: How to Apply IFRS in the SOCPA Exam

Knowing the standards in theory won’t help if you cannot apply them to solve questions.

Analyzing practical questions on the SOCPA exam

IFRS questions typically appear as short scenarios followed by multiple-choice options. You should:

• Identify the relevant standard.
• Apply the correct principle (recognition, measurement).
• Compute the correct amount (e.g., revenue, depreciation, impairment).

The importance of practicing with real-world cases

Practice helps you:

• Increase speed: Quickly identify what’s required and apply the rule confidently.
• Understand nuances: Small changes in data can change the answer.
• Build confidence: Frequent practice reduces anxiety under time pressure.

Section Four: Preparing for the SOCPA Exam Using IFRS

Effective study strategies

• Don’t memorize—understand: Focus on the logic behind each standard.
• Connect the standards: e.g., how IAS 36 impairment affects IAS 16 fixed assets.
• Use summaries and mind maps: One-page outlines with core ideas and key points.

Using reliable sources to apply the standards

Rely on official sources such as the IFRS Foundation website for the standards’ text and the SOCPA website for any local clarifications.

You now have a clear, simplified view of the most important IFRS standards you’ll encounter on the SOCPA exam. You have enough knowledge to start studying with greater focus and confidence—the complex task has become a set of manageable steps.

However, theoretical knowledge—even when simplified—may not always be enough to ensure rapid and accurate application under exam pressure. To confirm deep understanding and the ability to solve any practical scenario, you need intensive training and expert guidance.

In the “Accounting Technician Readiness Program,” we don’t just explain the standards—we take you through practical workshops with hands-on solutions to dozens of cases that mirror real exam questions, ensuring knowledge retention and success.

Turn your theoretical understanding into a practical skill that guarantees your success.
Join the “Accounting Technician Readiness Program” now and practice solving IFRS-based exam questions so you’re fully prepared to enter the exam with unshakable confidence.

Conclusion

Understanding IFRS is no longer an impossible task. By focusing on the key points of the five standards we’ve reviewed, you can build a strong, reliable foundation. You have:

• Learned the main ideas of the top 5 IFRS standards you need for the SOCPA exam.
• Understood how to apply these standards to practical cases to ensure full readiness to pass the exam.

Now that you’ve gained this structured knowledge, it’s time to apply it confidently and move forward toward achieving your goal and succeeding in the SOCPA exam.

FAQ Section

Q1: What is IFRS 15?

IFRS 15 is the international standard for “Revenue from Contracts with Customers.” It sets out a five-step model that companies must follow to recognize revenue accurately and consistently, ensuring revenue is recorded when control of a good or service transfers to the customer.

Q2: Can I pass the SOCPA exam without understanding IFRS?

It’s very difficult—if not impossible—to pass successfully without a comprehensive understanding of IFRS. These standards constitute the bulk of the financial accounting section, and the questions require practical application of their principles.

Q3: What are the top strategies for studying IFRS?

The most important strategies are: first, focus on understanding the logic behind each standard rather than memorization. Second, study each standard individually and then connect it with others. Third—and most importantly—practice extensively by solving questions and practical cases that mirror the nature of SOCPA exam questions.