- Dr. Omran: FRA adopts two new international accounting standards
- Dr. Omran: We cooperate with the Egyptian Society of Accountants and Auditors (ESAA) to raise awareness of the new standards
Dr. Mohammed Omran – FRA’s Chairman and Mr. Hazem Hassan- President of the Egyptian Society of Accountants and Auditors (ESAA) inaugurated the first series of workshops which were prepared and held in cooperation with (ESAA) to follow the developments occurred in the international accounting and auditing standards. This kind of workshops aim at raising the awareness of companies under FRA’s supervision of the two new accounting standards IFRS no. 9-15. Members of (ESAA) Board of Directors and 150 participants representing 112 financial entities of mortgage finance, financial leasing and microfinance companies as well as associations and NGOs and listed companies in the Stock Exchange participated in the workshop, in preparation for the application of this standard if approved by the Standards’ Committee chaired by FRA’s Chairman.
Dr. Omran stressed on the importance of these two new standards, particularly IFRS 9 and the need for raising awareness of the companies on how to apply them. He added that this requires information technology infrastructure that helps to provide the needed data, as well as an advanced level of risk management within the companies and building economic and statistical models to apply the standard correctly. However, IFRS 15 on revenue from contracts with customers requires the application of a number of principles upon determining the amount and timing of revenue’s registration instead of focusing on the principle of risks’ transfer and benefits associated with goods or services
The Chairman added that several workshops will be held besides communicating with different market parties before the decision of the Standards’ Committee headed by FRA’s Chairman regarding the timing set for applying this standard.
Mr. Hazem Hassan explained that IFRS 9 is a clearer model for measuring debt instruments either at amortized cost or at fair value through other comprehensive income or at fair value through profit or loss. The Standard introduces a new model for measuring debt instrument impairment that is not measured at fair value through profit or loss. The new model is based on estimating expected losses in the future rather than the current model which is concerned only with losses that may have already occurred, thus increasing the amount of debt impairment compared to the current situation.