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Prepare Financial Statements in Compliance with IFRS for Small Businesses

As regulations and standards for financial reporting continue to evolve, it is essential for small businesses in Dubai to comply with International Financial Reporting Standards (IFRS). IFRS is a set of accounting rules designed to provide transparency and consistency in financial reporting across different countries and industries. These standards help to ensure that financial statements are accurate, reliable, and comparable, thereby enhancing the credibility of a business's financial information. Preparing financial statements in accordance with IFRS can be a complex task, therefore it is advisable for corporations to seek the services of Audit Firms in UAE to seamlessly prepare financial statements in compliance with IFRS standards. 

Financial Reporting Requirements

In the UAE, enterprises operating in free zones are required to prepare their yearly financial accounts in accordance with IFRS. All other UAE corporations and partnerships limited by shares, entitled to any other liabilities, are permitted to prepare their accounting records in accordance with any generally recognized structure, however, the majority of the units do adhere to IFRS. The accounting records of listed firms with subsidiaries that are incorporated in other jurisdictions may be prepared in accordance with the organizational structure used by the parent company.

Implementation of VAT in the UAE

In the UAE, a 5% VAT tax rate was implemented in 2018, and since then, businesses have had to comply with a number of additional rules, including turning out VAT forms. Nonetheless, businesses must take into account the requirement to prepare annual financial statements if the business is not required to register for VAT.

This implies that the yearly financial statements will include an audited report that includes all payroll computations, statements of income, financial modifications, and other pertinent data. Our audit firm in Dubai can offer total assistance when putting together the yearly accounting records for your business.

Audit Criteria for Registered Companies in Dubai

The following businesses must undergo an audit in the UAE at any point throughout the fiscal year if they are:

  •         Partnerships or affiliations with share capital;
  •         Corporations with limited liability
  •         Joint-stock businesses
  •         Other corporation which is mandatory by any other legislation

Read More: The Updated Audit Procedures Under ASC 842 in UAE

An Audit's Objective for Dubai Businesses

Whether the data presented in the financial statements disclose a genuine and accurate assessment of the operations of that corporation or not, the general purpose of an audit is to produce an unbiased and independent judgment on that information. Top Audit Firms in Dubai will, for instance, demonstrate and express their view regarding whether or not the reported incomes, payments, profit/loss, assets, liabilities, and equities are stated at their reasonable and accurate standards or whether there is any serious error.

Notable Set of Reports for Financial Statements

A series of reports, including a balance sheet, a retention earnings statement, a cash flow statement, and an income statement, must be released for the overall objective of the yearly financial statements.

Statement of Financial Position

IAS mandates the preparation of a classified statement of financial position that separates current assets from current liabilities. The asset or obligation is essentially considered current when it is anticipated to be reclaimed or resolved within 12 months of the completion of the reporting period.

Statement of Cash Flows

This report indicates how cash has been utilized by the business over a specific time period, such as an accounting year. There are many financial notes included.

Financial Statement

It includes a corporation’s obligations, liabilities, and equities, providing a thorough analysis of the company’s capital structure. This crucial financial statement includes, among other things, a cash flow report for the business.

Shareholders Equity Statement

This particular reporting category gives details on the actions affecting equity accounts over a given time frame. A complete report will include information on the transactions and dividends involved.

The disclosure of changes in equity must at the very least include the following information:

  • Reconciling of each equity component's carrying amount between its starting point and ending periods
  • Total comprehensive income for the period, broken down into amounts attributed to the parent’s owners and non-controlling interests
  • For every equity component, the impact of retroactive application or restatement (if applicable)

Income Statement

This report includes details such as a firm’s income and expenditure for the entire year. It provides comprehensive details regarding the business’s operations.

The aforementioned reports are typically included in the yearly financial statements for Dubai-based enterprises together with additional financial comments and analysis for a particular accounting period.

Seek the Expert Services of Audit Firms in UAE

All businesses operating in the UAE are required to adhere with the IFRS standards. Corporate ethics and fairness should always be upheld and the firm's accounting must be conducted ethically. Availing our expert services at Farahat and Co. will help your business meet this requirement by ensuring that records are kept accurately and in accordance with the regulations. Farahat & Co. can offer total help for all types of financial concerns. Please feel free to speak with our auditors in Dubai if you have any questions concerning the reports.

Read More: Financial Audit Procedures for Small Organizations

Ervee is a CPA with international experience in Tax and Accounting. He has over 12 years of experience in accounting and bookkeeping and over a year in VAT implementation, registration, and accounting in UAE. He regularly drives out inefficiencies in company operations and loves the challenge of helping clients find additional ways for an easier and improved compliance and verification of transactions.