Egypt Financial Regulatory Authority issues first Egyptian standards for valuing intangible assets

The Egypt Financial Regulatory Authority issued new Egyptian valuation standards setting out, for the first time, a unified framework for financial valuation of intangible assets, aiming to support fair and consistent valuations and strengthen confidence in company valuations used for investment decisions. The standards will apply to all valuation exercises conducted within the Authority’s remit. The framework defines an intangible asset as a non-monetary asset that provides rights or economic benefits without physical substance, and lists examples including technology, software, trademarks, customer and supplier lists, non-compete agreements, trade data, patents, copyrights, operating licences such as franchise and gaming licences, broadcast spectrum, and other intellectual property rights. It sets out three core valuation approaches, the income approach based on the present value of economic benefits over the asset’s economic life, the market approach based on comparable market transactions, and the cost approach based on the cost of an equivalent asset or one providing similar services, alongside key considerations such as recognition criteria, discount and return rates, and economic life, including that an intangible asset is only recognised if separable or arising from contractual or other separable rights. The Authority also linked the standards to Egypt’s national intellectual property strategy and indicated it will support implementation through training and awareness programmes to improve the quality of valuation reports and facilitate the handling and use of intangible assets in contexts including venture capital investment, mergers and acquisitions, restructuring, and financial and tax reporting.