Financial Regulatory Authority Chairman's Decision No. (843) of 2022 (Updated Version in 2025)

Decision No. 843 of 2022 dated 2022/5/8 Regarding the Accounting Treatment for Changes in Foreign Currency Exchange Rates against the Egyptian Pound 1 In accordance with the latest amendment by the Authority Chairman's Decision dated 2025/12/24

The Chairman of the Board of Directors of the Financial Regulatory Authority, Having reviewed Law No. 10 of 1981 establishing the Insurance and Supervision on Insurance in Egypt Law and its Executive Regulations, and their amendments; And Law No. 10 of 2009 regulating supervision over non-banking financial markets and instruments; And Presidential Decision No. 192 of 2009 issuing the Basic System of the Financial Regulatory Authority; And Council of Ministers Decision No. 1568 of 2022, issued on 2022/4/27, regarding the amendment of certain provisions of Egyptian Accounting Standards; And Investment Minister Decision No. 356 of 2007 regarding the application of Egyptian Accounting Standards to insurance companies; And Investment Minister Decision No. 110 of 2015 regarding Egyptian Accounting Standards and its amendment; And Investment Minister Decision No. 16 of 2017 regarding Egyptian Accounting Standards and its amendment, issuing Appendix (A) to Standard No. (13) amended in 2015; And Authority Board of Directors Decision No. 70 of 2016 issuing the Application Guide for Egyptian Accounting Standards in the Insurance Sector; And Authority Board of Directors Decision No. 27 of 2017 issuing Appendix (1) to the Application Guide for Egyptian Accounting Standards in the Insurance Sector; And Authority Board of Directors Decision No. 68 of 2017 regarding the continued use of the Special Reserve formed in accordance with Appendix (1) issued by Authority Board of Directors Decision No. 27 of 2017; And Authority Board of Directors Decision No. 75 of 2019 amending Authority Board of Directors Decision No. 68 of 2017; And the letter from the Chairman of the Egyptian Federation of Insurance Companies dated 2022/4/19; And the memorandum from the Central Administration for Supervision and Monitoring of Insurance Companies prepared on this matter;

1 - Amended by virtue of the Authority Chairman's Decision No. (1378) dated 2022/8/16 and the Authority Chairman's Decision No. (3061) dated 2025/12/24.

IT IS DECIDED: (Article One) Insurance companies and the Cooperative Insurance Association, whose operating results were affected by net profits from revaluation differences of monetary assets and liabilities in foreign currencies (whether designated or undesignated) due to changes in exchange rates, shall recognize them within Other Comprehensive Income under the Special Reserve item among shareholders' equity. This reserve shall not be distributed or disposed of except in accordance with the conditions specified by the Authority and after consulting it. In case there are accumulated losses from previous financial years, and the company achieves profits from translating monetary assets and liabilities in foreign currencies, all foreign currency revaluation profits shall be presented within Other Comprehensive Income. These profits shall be transferred to retained earnings up to the amount of accumulated losses from the previous year, and any increase in foreign currency revaluation profits (if any) shall be recorded under the Special Reserve item among shareholders' equity. If insurance companies and the Cooperative Insurance Association are affected by net losses from revaluation differences of monetary assets and liabilities in foreign currencies due to exchange rate changes, they shall be recognized within Other Comprehensive Income and transferred to retained earnings in the same financial period.

(Article Two) Insurance companies and the Cooperative Insurance Association may continue to use the Special Reserve formed in the following ways:

1. Offsetting the company's accumulated losses from previous years.
2. Increasing the company's share capital.
3. Offsetting losses resulting from the application of Standard (47), after obtaining prior approval from the Financial Regulatory Authority.
4. Offsetting foreign currency exchange losses in exceptional cases of currency rate changes as estimated by the Authority2. Regarding Takaful (Islamic insurance) companies, they may continue to use the portion of the Special Reserve funded from shareholders' equity in the aforementioned uses. In all cases, the continued use of the aforementioned Special Reserve for distributing dividends to shareholders for the financial year ending on 2022/6/30 shall not be made except after obtaining the Authority's prior approval in this regard3.

• Item (4) was added by virtue of the Authority Chairman's Decision No. (3061) dated 2025/12/24 2
• The final paragraph was added by virtue of the Authority Chairman's Decision No. (1378) dated 2022/8/16 3

(Article Three) This special treatment shall be applied as an exceptional accounting treatment for the financial period, which is the financial year or part of it that begins before the date of the exchange rate adjustment (March 21–22, 2022) and ends on or after this date. This treatment shall not be applied to the financial statements for the part of the financial year that ends before the exchange rate adjustment date.

(Article Four) This Decision shall be published in the Egyptian Gazette and on the Authority's website, and it shall take effect from the day following its issuance. The concerned authorities are tasked with implementing it.