IFRS is internally accepted & adopted financial reporting standards issued by the IASB with the objective to increase consistency, transparency & enable comparison of financial statements around the world. Their purpose is to define various types of transactions, events & their impact on the Financial Statements. The reporting standards enable to increase consistency & reliability. As of 2020 IFRS is used in at least 120 countries primarily in Asia, European Union & South America.
As per UAE Commercial Companies Law No 2 of 2015, all companies need to apply international accounting standards and practices while preparing their books of accounts. UAE has mandated IFRS standards for companies listed in NASDAQ Dubai, Dubai Financial Services Authority, Abu Dhabi Securities Exchange. Companies listed in Dubai Financial Market P.J.S.C. are permitted to use IFRS. IFRS Standards in Dubai are also required to be adopted by foreign companies for listing. Companies also can hire IFRS services in Dubai that can help them understand the technicalities and the legal procedures of the IFRS in Dubai and UAE.
Standard IFRS Requirements
Covering a wide scope of accounting activities IFRS has set certain mandatory rules.
- Statement of Financial Position: IFRS has laid down the Reporting Standards for the Components of the Balance Sheet
- Statement of Comprehensive Income: Comprehensive Income reporting can be either in 1 Complete Income Statement or can be separated distinguishing between Profit & Loss Account & Statement of Other Income including income which is generated from Property & Equipment.
- Statement of Changes in Equity: Also, widely known as Statement of Retained Earnings or Capital Reserves. IFRS mandates to document the change or variation in earnings or capital reserves of the company for the respective financial period.
- Statement of Cash Flow: IFRS mandates a Company to bifurcate its Cash Inflow or Outflow transactions activities in 3 categories which are: –
- Cash Flow from Operating Activities
- Cash Flow from Investing Activities
- Cash Flow from Financing Activities
IFRS though internationally adopted & accepted comes with its own complexities. It is indeed unrealistic to expect the onboarded Finance Department or Team of the organization to sync or blend the concurrent accounting practice with IFRS. Transition from traditional Accounting Practices to IFRS or Creation of a New Accounting System is the hardest part for any organization.
Majority of the organization across the globe outsource these activities to CA’s as there are a lot of benefits of hiring Chartered Accountant professionals who are having relevant knowledge & expertise in the field of accounting services in Dubai or UAE.
It is always better from SME companies or the startup companies to hire an Accounting Firms in Dubai to help and assist them on preparing books of accounts of the company to save time and money both.
IFRS Standard in Dubai
Below are the crucial points illustrating IFRS in Dubai:
- More than 100 nations apply the technique on a global scale.
- In IFRS, the company may capitalize on development expenditures.
- Last In First Out (LIFO) management methods are not supported by IFRS.
- Under crucial business situations, IFRS empowers businesses to reverse inventory.
- The International Accounting Standard Board has given its approval to the standards (IASB).
What Are CPA services in Dubai?
CPA services in Dubai or UAE are basically Tax and accounting firm who can provide all financial services like VAT registration, filing of VAT and tax return as per the requirement of countries taxation authority, preparing of books of accounts of the company as per the IFRS standards, provides Audit services in Dubai to the companies.
How Avyanco Can Help You
Avyanco is one of the leading business setup consultancy & Accounting Services Provider in Dubai. We offer end-to-end customized solutions for Business setup in Dubai, Corporate PRO Services, Bookkeeping – Accounting services, Tax Compliance & Advisory, Audit – Assurance & Corporate Office Space.
What gives us an edge over other business service providers in the UAE is that we execute our services in compliance with internationally adopted practices as it provides handholding in a complex jurisdiction. Avyanco aspires to help businesses understand the legalities of the rules and regulations, comply with laws, and work uninterruptedly.
Contact Avyanco & allow our experts to guide you through accounting and bookkeeping services in Dubai for your business in UAE.
Call/WhatsApp: +971 50 3989000, (T): +971 4 240 5000, Email: info@avyanco.com.
