The Egypt Financial Regulatory Authority published remarks by its chairman, Mohamed Farid, setting out the scope of reforms implemented to modernise Egyptian Accounting Standards and related Egyptian auditing and assurance standards, with a stated objective of closer alignment with international practice. The update highlighted increased flexibility in financial reporting, including wider use of fair value measurement and the introduction of a dedicated accounting interpretation for carbon emission reduction certificates. Key changes referenced included amendments to Egyptian Accounting Standard (EAS) 34 on investment property to incorporate a fair value model alongside the cost model, with subsequent alignment toward recognising fair value movements in profit or loss while retaining a one-time option to record the difference in other comprehensive income over the life of the asset or investment. The reform programme also cited replacement and updates to EAS 13 on foreign exchange effects to reflect international developments on currency exchangeability and related disclosures, including optional accounting treatments aimed at addressing the impacts of exceptional Central Bank of Egypt economic decisions. Further amendments included an appendix to EAS 47 on financial instruments introducing optional exceptions when assessing credit risk and expected credit losses, following implementation concerns about local-currency instruments issued by the Egyptian government and the Central Bank of Egypt. EAS 17 on separate financial statements was updated to add the equity method for investments in subsidiaries and associates. The new interpretation on carbon emission reduction certificates sets out accounting treatments for different scenarios, including issuance to project owners or non-owner developers or financiers, and purchases for cancellation to achieve carbon offsetting or for trading, in the context of carbon certificates being treated as financial instruments eligible for listing and trading on the Egyptian Exchange. Farid indicated that standards-setting work remains ongoing through the permanent committee he chairs, and reiterated the importance of continuing professional development and the role of external auditors as the first line of defence for the quality and integrity of corporate financial reporting.
Egypt Financial Regulatory Authority 2025-01-30
Egypt Financial Regulatory Authority outlines overhaul of Egyptian Accounting Standards including new accounting guidance for carbon emission reduction certificates
The Egypt Financial Regulatory Authority announced reforms to modernize Egyptian Accounting Standards, aligning them with international practices. Updates include amendments to EAS 34 on investment property, EAS 13 on foreign exchange effects, and EAS 47 on financial instruments, plus a new interpretation for carbon emission reduction certificates. Chairman Mohamed Farid emphasized ongoing standards-setting efforts and the critical role of external auditors in maintaining corporate financial reporting integrity.