New Accounting Organization in E-Payment Budgets
- Provision of dedicated institutional email for notifications regarding the freezing of funds and disclosure of customer account balances.
- Exclusion of partners’ current accounts from the total partners’ equity.
- Classification of paid-in capital, reserves, and retained earnings under partners’ equity.
- Presentation of short-term liabilities related to partners’ withdrawals under a separate line item.
- Partners’ funds provided to support capital should appear under a separate line item within liabilities, with disclosure of their nature, balances, and terms.
In this regard, accounting treatments are to be provided in the financial statements of these entities, including:
1. Exclusion of the “Partners’ Current Accounts” line item from total partners’ equity in the financial statements of these entities. From an accounting perspective, including this item leads to recording all transactions of the owners and presenting this account as one of the components of equity in the statement of financial position.
Since some of these transactions exhibit characteristics of assets, others of liabilities, and still others of equity, the current situation may constitute a violation of the accounting entity concept and fail to achieve fair presentation of financial statement elements. Therefore, an accounting adjustment is required to exclude the “Partners’ Current Accounts” line item from total partners’ equity in the financial statements.
2. In accordance with the new supervisory directive, paid-in capital, reserves, retained earnings, and other specified items are to be classified under partners’ equity. This is because the statement of changes in equity is a component of the entity’s statement of financial position, prepared to identify changes in equity related to capital, assets, profits, and other items over a specified period.
3. Regarding funds provided by partners to support capital and operations, if they have maturity dates, they must be presented under a separate line item within liabilities, with disclosure of their nature, balances, and terms. This accounting treatment clarifies the financial efficiency achieved in this line item.
4. Funds provided by partners to support capital and operations, without specified repayment dates, should be included under partners’ equity as a separate line item, with disclosure of their nature and terms.
5. When withdrawals or short-term liabilities are associated with partners’ withdrawals of their funds, they must be presented under a separate line item within assets, with disclosure of the nature of the balances and their repayment dates.
6. Submission of the agenda for both ordinary and extraordinary general assemblies to the Central Bank of Kuwait to obtain prior approval before convening them.
On another front, regarding the mechanism for participation of exchange companies, electronic payment service providers, electronic contract service providers, and electronic payment system operators in the membership of the Virtual Central Chamber, established to combat electronic financial fraud, these entities have been directed to implement procedures for handling requests from judicial authorities regarding the freezing of customer funds or disclosure of account balances.
In this regard, electronic payment service providers, electronic contract service providers, electronic payment system operators, and exchange companies must undertake the following:
It is worth noting that the “Virtual Chamber” represents an advanced sovereign operational system for managing and combating electronic financial fraud, operating within direct integrated supervisory banking coordination with security and judicial authorities, notably the Ministry of Interior and the Public Prosecution. The importance of this entity is growing in light of the noticeable escalation in fraud methods targeting customers through fake calls, fraudulent data update links, misleading advertisements, and false claims of prizes.
