Is Accounting Mandatory In Dubai?

Yes, regular accounting Dubai is mandatory for every company. It is essential for your company's growth.

Accounting is a step-by-step process that classifies, records, summarises, and interprets financial transactions. It lets you know the business' financial status.

However, many companies need help with VAT or corporate tax filing. They find these tasks complex and time-consuming. Many solve their problems by hiring an expert accounting services firm.

Yes! Many small businesses struggle with their daily bookkeeping and accounting tasks. Their difficulty lies in the lack of access to expert accountants, time, and a deep understanding of accounting principles.

There are still more reasons for a company to opt for outsourced accounting services.

These professional firms follow the mandatory accounting Dubai standards. They work within the prescribed framework to update the books and deliver output that is compliant with the financial reporting standards in UAE.

International Financial Reporting Standards (IFRS)

The International Accounting Standards Board has issued International Financial Reporting Standards (IFRS) in the UAE.

As per The Securities & Commodities Authority (SCA), IFRS accounting standards are mandatory for Dubai companies.

In addition, companies in Dubai also follow Generally Accepted Accounting Principles (GAAP) to update their books.

IFRS details how to treat particular types of transactions and do financial reporting. It shows accountants how to maintain financial records.

As per IFRS financial reporting in UAE, you have to prepare documents like:

• Balance Sheet
• Income Statement
• Cash Flow Statement
• Equity Statement

Generally Accepted Accounting Principles (GAAP)

GAAP applies to corporate accounting. It gives guidelines to resolve difficulties and confusion. It forms the basis of accounting techniques advocated by the Financial Standards Board.

You need to hire expert accounting services to implement GAAP. The provider applies GAAP principles to balance sheets, exceptional classification, and publically identify revenue.

IFRS Accounting Standard is Mandatory in Dubai

According to the SCA, Dubai companies must use the IFRS guidelines to update and maintain their financial records. It is where an experienced accounting services firm in Dubai comes in handy. The firm provides you with reliable financial advice. Using IFRS, they can help you capitalise on the cost of development.

IFRS Accounting Standards for Financial Reporting

Regular Accounting Dubai gives you the latest records to refer to. Financial reporting based on such data is highly accurate and aids business decision-making. It is helpful to your management, investors, lenders, and suppliers to make effective financial decisions like mergers, investments, acquisitions, Etc.

Under IFRS, you must prepare various types of financial statements/reports. They are listed below:

• Board of Directors reports
• Corporate governance report
• Notes to Accounts
• Audit reports
• Management decisions and analysis reports
• Prospectus
• Various financial statements/management reports

You must record all financial transactions in your accounting system, preferably using the latest accounting software.

The financial statements you must prepare are:

• Balance sheet (Statement Of Financial Position)
• Comprehensive income statement
• Changes in equity statement
• Cash flow statement
• Board of Directors report

Under IFRS, these reports must give a reader an overview of your company’s activities, plans, and uncertainties.

Reports on Management Decisions and Analysis

You must prepare these reports to present a detailed analysis of the company's financial performance. You may also have to include info on the company's revenue, expenses, and profitability.

Audit Reports

An external auditor prepares audit reports. They express their opinion on whether the company's financial statements follow IFRS standards.

Audit report also provides financial insights. It also recommends installing new internal processes/procedures or improving the company's existing ones.

Corporate Governance Reports

The corporate governance report details the company structure and practices that are prevalent in the company. It also includes details of the board of directors and committees and the company policies.

Notes of Accounts

Notes of accounts render extra details on the financial statements. They include specific transactions and events affecting a company’s economic performance.

Prospectus

The prospectus shows the company’s financial performance. It would help if you created it before issuing a company's bonds or stocks. This document must present information transparently.

To reiterate, you must update your books per the Accounting Dubai rules (IFRS). An experienced outsourced accounting services firm employing certified accountants can easily ensure your compliance. It saves you time and money. If you need any help, contact us.