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Thursday, 9 February 2017

Gov’t issues amendment to accounting standards to allow for recognizing FX costs

This comes as Investment Minister Dalia Khorshid has approved an amendment to how FX losses are treated for tax purposes under Egyptian Accounting Standards, Al Mal reported. The amendment adds an additional option to the standards that allows companies to recognize changes in valuations that preceded the EGP float in November 2016. Egyptian Financial Supervisory Authority (EFSA) head Sherif Samy told the newspaper that the amendment will only be applied this fiscal year, and is not mandatory. In addition to laying out procedures for factoring in FX losses or gains on the income statement, the amended standards will also outline how USD debt will be translated, he added. The amendments will not affect how much companies will ultimately pay in taxes, but will distribute the FX changes over multiple periods, said PwC’s El Adly. Page 1 of the amendment is here and page 2 is here.

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