How to Prepare Financial Statements Under IFRS in the UAE

Financial statements help business owners, investors, lenders, and management understand a company’s financial position and performance. Many UAE businesses use International Financial Reporting Standards (IFRS) or another applicable reporting framework depending on their circumstances.

Start With Accurate Ledgers

Financial statements are only as reliable as the underlying accounting records. The first step is to ensure that sales, purchases, expenses, assets, liabilities, and equity are correctly recorded.

Complete Reconciliations

Bank accounts, receivables, payables, loans, and other material balances should be reconciled before financial statements are finalized.

Review Revenue and Expenses

Management should check revenue recognition, expense classifications, accruals, prepayments, and other year-end adjustments under the applicable accounting framework.

Check Assets and Liabilities

Fixed assets, depreciation, inventory, receivables, provisions, loans, leases, and other balances may require detailed review.

Prepare the Core Statements

Depending on the reporting requirements, financial statements may include a statement of financial position, statement of profit or loss and other comprehensive income, statement of changes in equity, cash-flow statement, and related notes.

Maintain Supporting Documentation

Each material balance should be supported by appropriate records. Good documentation makes review and audit processes easier.

Obtain Professional Review

Complex transactions may require specialist accounting or audit input. Businesses should address unusual transactions before finalizing the accounts.

Conclusion

IFRS-based reporting requires more than generating a profit-and-loss report from accounting software. Businesses should maintain accurate records, complete appropriate adjustments, and prepare financial statements according to the relevant reporting requirements.