Egyptian Cabinet Resolution No. 1568/2022 Adjusts Egyptian Accounting Standards to Confront Exchange Rate Fluctuations.

The Egyptian government issued Cabinet Resolution no. 1568/2022, which amended Egyptian Accounting Standard no. 13 to allow companies to account for the sudden change in the currency exchange rate in their budgets. For certain types of assets, such as real estate, fixed assets, intangible assets, and excavations acquired via foreign currency during the period from January 2020 until the latest March devaluation, companies will have the option of citing the exchange rate difference as an additional cost. The accountant can also include the devaluation as a variable when converting foreign liabilities and debts on financial statements. The amendment to the accounting standard is a temporary solution and does not extend to the period subsequent to the currency devaluation. Only Egyptian businesses and organizations whose balance sheets are denominated in Egyptian Pounds are entitled to take advantage of the optional accounting treatment. Egyptian joint-stock companies and companies limited by shares should consult with their appointed auditor to discuss the applicability of Cabinet Resolution no. 1568/2022 to their business. Businesses that take other corporate forms, such as limited liability companies, limited partnerships, and simple partnerships should meet with an accountant before preparing their annual income tax returns and submitting them to the Tax Authority.