Browse Profiles > Algeria > International Financial Reporting Standards
  Score Rank
Standards Compliance Index 9.17 out of 100 74
Business Indicator Index 3.91 out of 12 77
Algeria

International Financial Reporting Standards

Summary
According to the 2004 Financial System Stability Assessment conducted by the International Monetary Fund, Algerian accounting principles are overly vague and financial statements are generally unreliable for information on company performance. Furthermore, companies are not required to prepare consolidated financial statements and there are no accounting guidelines for the treatment of a number of important transactions. Also, compliance with local standards is not enforced effectively and there is no framework for sanctions and penalties. As stated in a 2005 World Bank report, in the spring of 2003 the World Bank completed a Report on the Observance of Standards and Codes on accounting and auditing in Algeria that evaluated the weaknesses and strengths of the country's accounting and auditing requirements and compared its reporting requirements against actual practices, using the International Financial Reporting Standards and International Standards on Auditing as the benchmarks. However, this report on Algeria has not been made publicly available.

    General Overview

    According to the 2004 Financial System Stability Assessment conducted by the International Monetary Fund (IMF), "local accounting norms and regulations, some of which date back to the command economy, are overly vague and financial statements fail to give an accurate and fair view of company performance" (p. 6). Further, Algerian accounting practices do not require the preparation of consolidated financial statements, and the required accounting treatment for a number of important transactions has not been laid out. Also, compliance with local standards is not effectively enforced, and there is no framework for sanctions and penalties. As stated in a 2005 World Bank report, in the spring of 2003 the Bank completed a Report on the Observance of Standards and Codes (ROSC) on accounting and auditing in Algeria, using the International Financial Reporting Standards and International Standards on Auditing as the benchmarks for assessing national standards. However, this report has not been made publicly available.
    According to the IMF, with regard to the banking sector, supervisory functions are performed by three independent bodies: the Monetary and Credit Board, which licenses lending institutions and also has the regulatory authority, the Banking Commission, in charge of on-site and off-site supervision and sanctions, and the Bank of Algeria (BoA), in charge of legislation and audits. The Governor of the BoA, chairs the three institutions. The IMF noted that the banks' accounting system has "serious flaws that make it difficult to determine their exact exposure and financial condition" (p. 31). The International Federation of Accountants (IFAC) website discloses that Algeria is not an IFAC member.


    The Principles

    IFRS 1: First-time Adoption of International Financial Reporting Standards (effective 2006)

    There is insufficient publicly available information as to Algeria's compliance with this principle.

    IFRS 2: Share-based Payment (effective 2005)

    There is insufficient publicly available information as to Algeria's compliance with this principle.

    IFRS 3: Business Combinations (effective 2004)

    There is insufficient publicly available information as to Algeria's compliance with this principle.

    IFRS 4: Insurance Contracts (effective 2006)

    There is insufficient publicly available information as to Algeria's compliance with this principle.

    IFRS 5: Non-current Assets Held for Sale and Discontinued Operations (effective 2005)

    There is insufficient publicly available information as to Algeria's compliance with this principle.

    IFRS 6: Exploration for and Evaluation of Mineral Resources (effective 2006)

    There is insufficient publicly available information as to Algeria's compliance with this principle.

    IFRS 7: Financial Instruments: Disclosures (effective 2007)

    There is insufficient publicly available information as to Algeria's compliance with this principle.

    IAS 1: Presentation of Financial Statements (effective 2007)

    There is insufficient publicly available information as to Algeria's compliance with this principle.

    IAS 2: Inventories (effective 2005)

    There is insufficient publicly available information as to Algeria's compliance with this principle.

    IAS 7: Cash Flow Statements (effective 1994)

    There is insufficient publicly available information as to Algeria's compliance with this principle.

    IAS 8: Accounting Policies, Changes in Accounting Estimates and Errors (effective 2005)

    There is insufficient publicly available information as to Algeria's compliance with this principle.

    IAS 10: Events after the Reporting Period (effective 2005)

    There is insufficient publicly available information as to Algeria's compliance with this principle.

    IAS 11: Construction Contracts (effective 1995)

    There is insufficient publicly available information as to Algeria's compliance with this principle.

    IAS 12: Income Taxes (effective 2001)

    There is insufficient publicly available information as to Algeria's compliance with this principle.

    IAS 14: Segment Reporting (effective 1998)

    There is insufficient publicly available information as to Algeria's compliance with this principle.

    IAS 16: Property, Plant and Equipment (effective 2005)

    There is insufficient publicly available information as to Algeria's compliance with this principle.

    IAS 17: Leases (effective 2005)

    There is insufficient publicly available information as to Algeria's compliance with this principle.

    IAS 18: Revenue (effective 1995)

    There is insufficient publicly available information as to Algeria's compliance with this principle.

    IAS 19: Employee Benefits (effective 2006)

    There is insufficient publicly available information as to Algeria's compliance with this principle.

    IAS 20: Accounting for Government Grants and Disclosure of Government Assistance (effective 1984)

    There is insufficient publicly available information as to Algeria's compliance with this principle.

    IAS 21: The Effects of Changes in Foreign Exchange Rates (effective 2005)

    There is insufficient publicly available information as to Algeria's compliance with this principle.

    IAS 23: Borrowing Costs (effective 1995)

    There is insufficient publicly available information as to Algeria's compliance with this principle.

    IAS 24: Related Party Disclosures (effective 2005)

    There is insufficient publicly available information as to Algeria's compliance with this principle.

    IAS 26: Accounting and Reporting by Retirement Benefit Plans (effective 1998)

    There is insufficient publicly available information as to Algeria's compliance with this principle.

    IAS 27: Consolidated and Separate Financial Statements (effective 2005)

    According to the 2004 IMF report, Algerian accounting standards do not require the preparation of consolidated financial statements.

    IAS 28: Investments in Associates (effective 2005)

    There is insufficient publicly available information as to Algeria's compliance with this principle.

    IAS 29: Financial Reporting in Hyperinflationary Economies (effective 1990)

    There is insufficient publicly available information as to Algeria's compliance with this principle.

    IAS 31: Interests in Joint Ventures (effective 2005)

    There is insufficient publicly available information as to Algeria's compliance with this principle.

    IAS 32: Financial Instruments: Disclosure and Presentation (effective 2005)

    There is insufficient publicly available information as to Algeria's compliance with this principle.

    IAS 33: Earnings per Share (effective 2005)

    There is insufficient publicly available information as to Algeria's compliance with this principle.

    IAS 34: Interim Financial Reporting (effective 1999)

    There is insufficient publicly available information as to Algeria's compliance with this principle.

    IAS 36: Impairment of Assets (effective 2004)

    There is insufficient publicly available information as to Algeria's compliance with this principle.

    IAS 37: Provisions, Contingent Liabilities and Contingent Assets (effective 1999)

    There is insufficient publicly available information as to Algeria's compliance with this principle.

    IAS 38: Intangible Assets (effective 2004)

    There is insufficient publicly available information as to Algeria's compliance with this principle.

    IAS 39: Financial Instruments: Recognition and Measurement (effective 2006)

    There is insufficient publicly available information as to Algeria's compliance with this principle.

    IAS 40: Investment Property (effective 2005)

    There is insufficient publicly available information as to Algeria's compliance with this principle.

    IAS 41: Agriculture (effective 2003)

    There is insufficient publicly available information as to Algeria's compliance with this principle.

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    Sources of Assessment

    International Monetary Fund, "Algeria: Financial System Stability Assessment, including Reports on the Observance of Standards and Codes on the following topics: Monetary and Financial Policy Transparency and Banking Supervision," Country Report No. 04/138, Washington, D.C.: IMF, May 2004. Available from International Monetary Fund website. Accessed on December 17, 2007. (IMF 2004)

    World Bank, "Algeria- Financial Sector Assessment," July 2004. Available from World Bank website. Accessed on December 17, 2007. (WB 2004)

    World Bank, "International Bank for Reconstruction and Development International Finance Corporation Country Assistance Strategy Progress Report for People's Democratic Republic of Algeria for the Period 2004-06," Report No. 32956-DZ, July 27,2005. Available from World Bank website. Accessed on December 17, 2007. (WB 2005)

    Relevant Organizations

    Bank of Algeria - Banque D'algérie (BoA) (website in French only)

    Banking Commission, Bank of Algeria - Commission Bancaire (CB) (in French only)

    Commission for Organizing and Surveying Market Operations - Commission d'Organisation et de Surveillance des Opérations de Bourse (COSOB) (website in French only)

    Council on Money and Credit, Bank of Algeria - Conseil de la Monnaie et du Credit, Banque D'algérie (CMC) (in French only)

    Ministry of Finance - Ministère Des Finances (MoF). (in French only)



    Relevant Legislation/Regulation

    Money and Credit Law No. 90/10, 1990 (as amended in 2001) (in French only)

    Money and Credit Ordinance No. 03/11, 2003 (in French only)



    Supplementary Sources

    International Federation of Accountants website. Accessed on December 21, 2007. (IFAC website)
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