The New Version of the Egyptian Accounting Standards | KPMG | EG

The New Version of the Egyptian Accounting Standards

The New Version of the Egyptian Accounting Standards

Sherif Samy: EFSA welcomes the new version of the Egyptian Accounting Standards after 9 years from the latest update

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Sherif Samy: EFSA welcomes the new version of the Egyptian Accounting Standards after 9 years from the latest update

  • The new Egyptian Accounting Standards correspond to a large extent with the international standards
  • A Special standard for small and medium -sized enterprises to facilitate the preparation of financial statements

EFSA’s Chairman announced that the new version of the Egyptian Accounting Standards is to be applied starting from the first of January 2016. The new standards will be applied by entities that begin its fiscal year from this date or after it. EFSA’s Chairman welcomed the issuance of the Minister of Investment decision No. 110 of 2015 on the issuance of the new Egyptian Accounting Standards which culminated efforts of a committee that included EFSA’s experts and representatives of The Egyptian Society of Accountants & Auditor and the Egyptian auditors and of the Central Auditing Agency (CAA), the General Authority for Investment (GAFI) and the Egyptian Institute of Accountants and the Division of practitioners of Free professions- the Egyptian Commerce Syndicate.

Sherif Samy said that Egypt did not witness any updates to the Egyptian Accounting Standards since 2006, despite the international standards had seen great developments. So it was necessary to work on the issuance of an updated version to serve investment and capital market in Egypt and increase its competitiveness. The new standards include 39 standards and a frame that will be used in the preparation and presentation of financial statements replacing the former Egyptian Accounting Standards. In addition, the new standards include for the first time a special standard for small and medium-sized enterprises. The said standard allows some simplified alternative treatments to suit these entities.

He pointed out that setting a date of application (January 2016) will grant financial auditors and corporate officials the chance to know the new standards and held training courses to facilitate its understanding. He added that it was decided to form a permanent committee to issue general interpretations upon having any questions related to the new standards. The said committee shall also update the Egyptian standards periodically whenever necessary until Egypt kept pace with global best practices.

Mohammed Yehya – Head of standards’ committee - The Egyptian Society of Accountants & Auditor asserted that the Egyptian standards are compatible to a large extent with modern international standards and all companies shall abide by these standards. The new standards will improve the quality of financial statements and standardized treatments and accounting policies. It will achieve more disclosure and transparency. In addition, it will help all concerned parties in understanding and examining the financial statements and to take the economic and financial decisions on a sound basis. He said that the Egyptian standards differ from the international standards in two points, first: dividend paid for the staff and board members are not included as expenses in the income statement but it is included as profit distributions and that is pursuant to the legal requirements. And Second: related to the Financial Leasing standard which is different from IAS, and that is due to the fact that law no. 95 of 1995 on financial leasing include accounting treatments which are quite different from the prevailing international treatments. As the lessor shall retain the leased asset in his registers and depreciate it. The tenant shall bear the profit or loss and it shall be considered as expenses related to that period in which it was paid in.
 

© 2017 KPMG Hazem Hassan Public Accountants & Consultants, an Egyptian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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