Published November 10, 2026
by Softtech Financials
6 min read
Companies in Pakistan do not all prepare financial statements under the same rules. Which framework applies depends mainly on the size of the company and whether it is listed or of public interest. This article summarises the structure as described by the IFRS Foundation, so you know which questions to ask.
Who sets the standards
ICAP recommends accounting standards and the SECP notifies them for companies under the Companies Act 2017. Banks and certain financial institutions are subject to additional requirements from the State Bank of Pakistan. Pakistan has adopted IFRS Standards, with the exception of IFRS 1, which covers first-time adoption.
The three main tiers
| Company type | Framework |
|---|---|
| Listed companies, public-interest companies and large non-listed companies | IFRS Standards as adopted in Pakistan |
| Medium-sized entities | IFRS for SMEs |
| Small-sized private entities | ICAP's Accounting and Financial Reporting Standard for Small-Sized Entities (AFRS for SSEs) |
What counts as large or small
Under the criteria summarised in the profile, a non-listed company is treated as large if its paid-up capital is at least PKR 200 million, its turnover exceeds PKR 800 million or it has at least 750 employees. A small-sized private entity is described as one with paid-up capital of PKR 10 million or less, turnover of PKR 150 million or less and no more than 250 employees. Entities in between are medium-sized. Always verify the current definitions and how multiple conditions combine for your company.
Why this matters in practice
- The framework determines the recognition, measurement and disclosure rules your statements must follow.
- Disclosure volume differs a lot: full IFRS requires far more notes than the small-entity standard.
- Lenders, investors and regulators may expect a specific framework regardless of your size.
- If your company grows or changes status, the framework may change and prior-period comparatives may need attention.
Where GAAP fits
GAAP refers to the generally accepted accounting principles of a particular country. The term is most commonly associated with the United States. A business with an overseas parent or investor may be asked for information on a different basis from the statutory statements it files locally. That is a reporting requirement to agree early, not something to solve at year-end.
Next steps
If you are not sure which framework applies, start by confirming your legal form, size against the current thresholds and any requirements from lenders or investors. Our GAAP and IFRS reporting support can help you prepare statements and schedules once the framework is clear and our audit readiness service helps you organise records before the auditor arrives. Contact us to talk through your situation.
Please note: This page is general information, not tax, legal or investment advice. Rules and thresholds change, so confirm the current position with the relevant authority or a qualified adviser before you act.