• Dr. Omran: Require all companies subject to the Authority’s supervision to fully disclose the impact of the Corona pandemic on its economic position in its first financial statements
At the invitation of the Financial Regulatory Authority, a meeting was held with the Supreme Committee assigned to review the Egyptian Accounting Standards, Egyptian standards, limited examination and other verification tasks. It is worth mentioning that the said Committee was formed by the Ministerial Decree No. 909 of 2011 chaired by Dr. Mohammed Omran, FAR’s Chairman. The committee was established to study the effects of Ministerial Decree No. 69 of 2019 on amending the Egyptian Accounting Standards to be applied as of the beginning of 2020.
In this context, Dr. Mohammed Omran – FRA’s Chairman revealed that given the current conditions the country is going through as a result of the outbreak of the Corona virus and the necessary economic and financial implications associated with it, in addition to the implementation of prevention measures and facing its spread by imposing restrictions on the presence of human resources in companies at full capacity on a regular basis, the committee agreed to postpone the application of the new Egyptian Accounting Standards and the accompanying amendments issued by decision no. 69 . Thus, the companies shall apply these new standards and amendments to the annual financial statements by the end of 2020.
FRA’s Chairman said that the committee preferred to limit the inclusion of the combined effect for the whole year in the annual financial statements. Meanwhile, companies shall disclose this fact and its accounting effects, if any in their periodic statements during 2020.
According to Omran, the committee continues to follow up on all the effects related to the Coronavirus and it will take all measures in the field of applying the new accounting standards in light of the development of the conditions referred to.
In a related context, Dr. Omran asserted that the Authority will demand the listed companies as well as companies and entities subjected to its supervision to make full disclosure in its first financial statement issued by them after publishing FRA’s decision on the Egyptian Stock Exchange – and on its website – about the impact of these events on its economic situation. The disclosure shall include its financial centres , results of its works and its cash flows ( current and future) and the impact of these events on the economic value of the enterprise, while measuring any impairment of assets or additional liabilities in accordance with the current Egyptian Accounting Standards. All this will help the user of these financial statements to take the appropriate decisions.
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