الهيئة العامة للرقابة المالية

FRA gives top priority to the development of the Egyptian Accounting Standards (EASs). The EASs play a key role in ensuring that the financial statements of economic entities operating in various production activities accurately reflect their financial position and business operations. The development of EASs is driven by the rapid local, regional, and global economic changes and consequent challenges facing companies to practice their activities and achieve their objectives.

Relatedly, EASs help companies present their financial statements accurately, reflecting their real market value and taking into account economic developments and international standards. This, in turn, enables stakeholders to make sound economic and investment decisions.

The development of EASs also supports the government’s plan to maximize the return on assets (ROA ) as part of implementing the State Ownership Policy Document.

The Ownership Document determines the state’s presence in the economic sectors and seeks to enhance the private sector’s participation in public investments. The move confirms the government’s keenness to facilitate foreign investment inflows and encourage global companies to invest in Egypt.

As part of FRA’s rapid response to various developments and changes, namely the coronavirus (COVID-19) pandemic, the Russian-Ukrainian war, and supply chain disruptions that have caused severe cracks in the global economy, the Egyptian Accounting Standards Review Committee, formed by the Prime Minister’s Decree No. 2115 /2023, approved the introduction of the revaluation model for fixed assets (Standard No. 10), intangible assets (Standard No. 23), exploration and valuation of mineral resources assets (Standard No. 36), and the fair value model for real estate investment (Standard No. 34) and its amendments. The new model enables companies to revalue their assets to accurately reflect their fair values and financial position.

The development of the EASs included the rules and regulations for revaluing various types of companies’ assets, as well as the transitional treatment and disclosures required for those treatments.

In this respect, the amendments to the EASs stipulated the issuance of EAS No. 50 on insurance contracts to align with international standards, alongside the introduction of some treatments for fruit trees to be within Standard No. 10 on fixed assets instead of Standard No. 35.

Implementing these standards will benefit companies and the investment climate in Egypt. To this end, the Board of Directors of FRA issued a decree to establish a registry for appraisers specializing in various activities to apply these standards.

To practice these activities, appraisers should be registered in the FRA registry. The FRA issued terms and conditions for registration and its continuation. So far, about 8 appraisal experts have been registered in the FRA registry.

FRA has also issued a raft of other decrees that enable companies to address the effects of changes in foreign exchange rates. This allows companies to present their financial statements reflecting their real financial position and includes the actual costs of providing foreign currency used in their production activities.

Moreover, FRA has streamlined the rules and regulations for registering auditors in its registries in an effort to attract professional competencies and cadres. The new rules stipulate that auditors should pursue professional education and provide technology infrastructure requirements.

To upskill auditors, the new rules state that each auditor and team member should provide a statement indicating obtaining a minimum of 25 training hours for professional education per year and no less than 120 training hours in accounting and auditing over three years.

As part of FRA’s continuous efforts to keep pace with the developments of international standards, the Prime Minister issued Decree No. 636/2024, amending some provisions of the EASs, Standard No. 13, to allow companies to account for the sudden change in the currency exchange rate in their budgets. This enables companies to apply the exchange rate at which they had executed commercial transactions if the entity could not obtain foreign currency as long as it was recorded in the books.

The standard allows for the entity to choose the exchange rate of the currency to be used in valuing its cash balance at the end of the financial period, which ensures the accuracy of the financial statements in expressing the financial position and business results, as well as Standard No. 17 on standalone financial statements, and amendments to Standard No. 34 on real estate investment, to keep pace with international standards.