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Sunday, February 9, 2025

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Because of the exchange rate.. Egypt extends work to amend its accounting standards

The new decision allows companies to carry out an optional and temporary accounting treatment to cope with the effects of changes in exchange rates after the exceptional economic decision related to the movement of the exchange rate.

According to the decision, the financial year for the application of the special accounting treatment mentioned in this appendix is ​​the fiscal year or the fiscal period that begins before the date of October 27, 2022, which is the date of movement of the exchange rate, and ends on or after that date and the following fiscal year or year.

Egypt had exceptionally amended this accounting standard for a temporary period with the aim of helping the different entities to reclassify losses resulting from exchange rate differences according to decisions related to the evolution of the exchange rate, so as to alleviate the pressure on its finances financial statements, results of operations and property rights.

In turn, the FRA said the Cabinet’s decision came after it submitted a request for an extension of the deadline to make the accounting adjustment, allowing companies that have existing foreign currency obligations related to assets acquired before amending the exchange rate and which are still present and In light of difficult global economic conditions, which have resulted in a combination of high food and fuel prices, disruption of supply chains and costs of high shipping, which resulted in inflationary pressures that affected the economies of many countries, including Egypt.

In the authority’s statement, she said the philosophy of the amendment is to allow companies that have acquired foreign currency assets before changing the exchange rate, and there are still funding obligations on that asset to capitalize losses from exchange rate differences on these assets and recognize them in its financial statements as assets, in order to mitigate the severity of the impact of Expenditure price differences on its annual results of activity and its financial indicators.

The new amendments also make it possible to recognize in the items of comprehensive income the net debit and credit exchange differences realized during the period, in addition to the differences resulting from the recalculation of the balances of items of a monetary nature existing at the end of December 31, 2023.

As part of the mitigation and facilitation of companies listed on the Egyptian Stock Exchange, the Board of Directors of the General Financial Supervisory Authority has extended the date of submission of periodic financial statements for companies listed on the Egyptian Stock Exchange and entities subject to the supervision and control of the AMF, for the financial year ended March 31, 2023, by May 30, 2023 at the latest.

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Arab Desk
Arab Desk
The Eastern Herald’s Arab Desk validates the stories published under this byline. That includes editorials, news stories, letters to the editor, and multimedia features on easternherald.com.

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