Regulatory Alerts2024-02-02 | 13612Translation Principles of Foreign-Currency Denominated Assets and Liabilities into Lebanese Pound
Banque du Liban’s Acting Governor issued Basic Decision No. 13612, requiring all Lebanese banks and financial institutions to translate foreign-currency denominated monetary assets and liabilities, along with non-monetary assets classified at fair value, into Lebanese Pounds using the IAS 21 translation principle and rates from the central bank’s approved electronic platform. The mandate applies to financial statements suspended as of January 31, 2024, and aligns domestic regulatory reporting with IFRS standards by mandating valuation based on the net equity method and officially announced exchange rates. This decision updates prior accounting design frameworks to ensure consistent, market-driven currency conversion for financial statement preparation.
Basic Circular No. 167
For Banks and Financial Institutions
We enclose herewith a copy of the Basic Decision No. 13612 dated February 2, 2024, concerning the translation principles of foreign-currency denominated assets and liabilities into the Lebanese Pound.
Beirut, February 2, 2024 Acting Governor of Banque du Liban Dr. Wissam Mansouri
Basic Decision No. 13612 Translation Principles of Foreign-Currency Denominated Assets and Liabilities into the Lebanese Pound
The Acting Governor of Banque du Liban, Pursuant to the Monetary and Banking Law, particularly Articles 70, 146, and 174 thereof; And pursuant to Law No. 28/67 dated May 9, 1967, concerning the amendment and completion of legislation regarding banks and the establishment of a mixed institution for guaranteeing bank deposits, particularly Article 3 thereof; And pursuant to Decree No. 4665 dated December 26, 1981, concerning the establishment of a general accounting design, particularly Articles 2 and 22 thereof; And pursuant to the Ministry of Finance Decision No. 10/1/J dated April 9, 1984, concerning the accounting design for banks and financial institutions, particularly Annex No. (4) attached thereto (Principles of valuing foreign-currency transactions); And in accordance with IFRS (International Financial Reporting Standards requirements); And pursuant to the decision of the Central Council of Banque du Liban taken in its meeting held on February 2, 2024;
Decrees as follows:
Article One: All banks and financial institutions, when preparing their financial statements, shall apply the principle of International Accounting Standard (IAS 21) regarding the translation of monetary assets and liabilities denominated in foreign currencies, and non-monetary assets classified at fair value (Fair Value Method Equity), into an amount equivalent to their Lebanese Pound value according to the net equity method, based on the rate announced on the electronic platform approved by Banque du Liban as of the date of preparation of the financial statements.
Article Two: This decision shall take effect as of the statement suspended on January 31, 2024.
Article Three: This decision shall be published in the Official Gazette. Beirut, February 2, 2024 Acting Governor of Banque du Liban Dr. Wissam Mansouri