Ever since 2003, when the publishing of IFRS financial statements for companies that are listed on the Abu Dhabi Securities Exchange (ADX) became mandatory, the need for IFRS Advisory service to handle report publication gained recognition.
As per the directives from the Central Bank of UAE, it is mandatory for all banks in the UAE to publish IFRS financial statements. Even though FRS is not necessary for unlisted companies other than banks, these companies may adopt IFRSs as a best practice.
It is mandatory for the companies that are listed on the Dubai Financial Market (DFM) to publish IFRS financial statements.
It is also mandatory for the companies that are listed on NASDAQ Dubai (previously the Dubai International Financial Exchange, DIFX) to make public IFRS financial statements.
With the requirements of publishing IFRS financial statements coming into force, there are quite a few companies that are not prepared and have been daunted by the timing, scale and degree of the transformation in the method of reporting through IFRS financial statements. Of late, implementation of International Financial Reporting Standards (IFRS) has affected UAE companies in general. Some companies have begun implementing the procedure behind schedule and are currently grappling to meet the deadline.
In the preceding one year, majorly standards 9, 15 and 16 of the IFRS accounting standards have affected the companies in the UAE and caused instability in so far as the presentation of the income statement and balance sheet are concerned.
IFRS 15 – which influence revenue to be taken into consideration, has had an immense effect on the UAE companies in the real estate and telecom sectors. In the telecom industry, the balance sheet or the earnings retained for listed companies on Dubai and Abu Dhabi stock markets have escalated by Dh766 million only due to applying one standard. This demonstrates the scale and extent of these latest standards.
Due to IFRS 15, several real estate entities have altered contracts between the company and customers to take advantage of the norms that lay down revenue recognition guidelines, permitting such companies to take into account revenues spread over time instead of taking the revenue into account during property delivery to its customers.
The IT department of these companies needs to gear up for implementation and adapting of these standards. However, those companies that are listed were well off in terms of reporting since they already were sending quarterly reports.
Business entities would benefit from the professional services provided by full time agencies that have the requisite knowledge and the relevant experience in the matters related to International Financial Reporting Standards. GCC Filings is a good choice for being engaged for AFRS Advisory services.
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