Accounting is the process of recording, summarizing, classifying, and interpreting financial transactions. It is a crucial part of any business as it provides formation about the company’s financial position. In Dubai, accounting is mandatory for all companies regardless of their location or size.
Accounting is an integral part of the business. Businesses cannot function without dealing with accounting. The implementation of VAT has also increased the importance of business accounting services in Dubai. Companies operating in Dubai require counting services for multiple reasons. Business face trouble dealing with bookkeeping and accounting. Businesses need to file for their taxes such as VAT or corporate tax without any errors.
All businesses follow specific accounting standards to maintain their accounting tasks. This article is ideal for you to know about accounting standards and tasks in Dubai.
What Are The Accounting Standards? Definition And Types
Counting standards are the principal set for financial reporting. These rules help to record how the transactions are to be made. It provides some financial information to lenders, creditors, and investors. Basic accounting is very much required for the business rating in Dubai.
The contents need to constantly update the financial records. The companies have to install accounting software to process all the accounting transactions. They have to take care of the disbursements, receipts, and all the receivables regularly to keep the company financially healthy.
Many people are confused in the UAE about the recent modification in the design and format of financial record management. Companies adopt different formats and rules to manage their accounting records. International financial reporting standards and generally accepted accounting principles are two of the most frequently used bookkeeping and accounting principles. International financial reporting standards
The International Accounting Standards Board has issued IFRS international accounting standards in the UAE. It deals with particular types of transactions and financial reporting. The IFRS explains a way of working for accountants to maintain their records. The set of principles is designed to make sure the formal language is used by accounting companies across the world.
These are some of the components of IFRS financial reporting in the UAE:
- Income Statement
- Cash Flow Statement
- Balance Sheet
- Equity Statement
Generally Accepted Accounting Principles (GAAP)
GAAP comprises crucial guidelines to deal with difficulties, confusion, and accounting rights to handle corporate accounting. This accounting standard is the foundation of accounting techniques approved by the Financial Standards Board (FASB).
The GAAP implementation requires comprehensive accounting services. It manages balance sheets, and exceptional classification, and identifies revenue for public declaration.
Mandatory IFRS Accounting Standard In Dubai
The Securities & Commodities Authorities (SCA) have declared it mandatory for businesses with IFRS. By making IFRS accounting standards mandatory, UAE has become a global financial center following the best practices in financial reporting.
All the companies mentioned in the Dubai Financial Market, or Abu Dhabi Securities Exchange should manage their financial records according to the IFRS guidelines. You may realize that most leading accounting firms in Dubai provide high-quality accounting services. These companies also provide effective financial consultation and ensure create assistance and reliability.
IFRS is widely used by over 100 countries across the world. These accounting standards are canned by the international accounting standard board. IFRS makes businesses capitalize on development costs.
Financial Reporting Under IFRS Accounting Standards
Precise financial reporting is derived from the efficient accounting method of a company. Financial reporting enables third parties to make effective decisions on mergers, investments, and acquisitions, etc. All the companies that doctor the IFRS model in the UAE include the government sectors.
Here are the major types of financial reports to be prepared under these standards.
- Financial statements
- Reports from the board of directors
- Reports on corporate governance
- Notes to Accounts
- Audit reports
- Reports on management decisions and analysis
- Prospectus
- Financial statements
Companies are required to record all transactions in an accounting system. They can also make any necessary adjustments to the reports. Then they need to prepare the following financial statements:
- Statement Of Financial Position (Balance Sheet)
- Statement of the comprehensive income statement
- Statement of changes in equity
- Statement of cash flows
- Reports from the board of directors
Under IFRS open these reports must have an overview of the company’s activities. They must have addressed the uncertainties that the company faces anyway. They also need to mention the outline for the company’s dance for the future.
Reports on management decisions and analysis
These should provide an analysis of the financial performance of the company. These reports can also include information on the revenue, profitability, and expenses of a company.
Audit reports
An audit report is prepared by an external auditor. These reports provide an opinion on whether the financial statements are quoting the IFRS standards. Also, provide additional insights and recommendations for the company.
Reports on corporate governance
The governance structure and practices must be in the report of the company. They must include information on the board of directors, any committee that has been established, and the policies of the company.
Notes of Accounts
These notes provide additional information on the financial statements of the company. Details on specific transactions or any event that may impact on the company’s financial performance.
Prospectus
prospectus is prepared when a company is planning to issue securities such as bonds or stocks. The prospectus should provide transparent information on the company’s financial performance.
IFR certified accountants
ebs is one of the leading accounting firms in Dubai. We have credited and certified accountants under IFRS in our company. Our team has relevant experience in providing quality accounting and financial services. We at ebs also ensure that businesses comply with the IFRS standards and companies across the UAE.
Feel free to contact us for any queries on financial reporting through IFRS.