Regulatory Alerts2017-01-01
Board of Directors Decision No. (27) of 2017
The General Authority for Financial Supervision (GAFS) issued Board Decision No. 27 of 2017 to introduce Appendix No. 1 to the Egyptian Insurance Sector Accounting Standards Guide, establishing a temporary special accounting treatment for foreign exchange valuation differences arising from Egypt's November 3, 2016, currency liberalization. The directive mandates that insurance companies recognize at least 80% of exchange rate liberalization-induced valuation gains or losses in Other Comprehensive Income rather than the income statement, with remaining fluctuations allocated to profit or loss or a non-distributable Special Reserve within equity. This exceptional treatment applies exclusively to the financial period from July 1, 2016, to December 31, 2016, without requiring retroactive adjustments to comparative prior periods.