Preparation of Annual Financial Statements in Dubai

Updated on Monday 04th May 2020

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A Dubai limited liability company is required to prepare the annual financial statements under IFRS (International Financial Reporting Standards). In agreement with IFRS, holding enterprises are demanded to prepare and organize enhanced audited financial statements each year. Consolidation is not mandatory if the business is a transitional holding company. A holding company will prepare the consolidated financial statements under the official accounting criteria. Our accountants in Dubai can offer proper information and assistance if you need to prepare for the annual financial statements in Dubai.
 

Financial reporting structure


It is mandatory for free zone businesses in the UAE to prepare the annual financial statements in agreement with the International Financial Reporting Standards. All other companies or partnerships limited by shares in the UAE, subject to any other obligations, have the possibility to prepare their financial statements in accordance with any normally excepted structure, but most of the units do follow IFRS. Subsidiary corporations of listed companies that are registered in other territories have the possibility to prepare the financial statements in agreement with the structure followed by the parent company.
 

Audit requirements for listed companies in Dubai


In the UAE, the following types of companies must have an audit at any time in the financial year if they are: 
 
  •  joint-stock companies;
  •  limited liability companies; 
  •  affiliations or partnerships limited by shares;
  •  any other business which is mandatory by any other law. 

Small companies in Dubai are audited when they are required to do so by any supervisory unit or financial institution or to meet any other special condition.


The purpose of an audit for your business in Dubai


The general reason for an audit is to create an independent and impartial view on the information offered in the financial statements, whether that information reveals the true and fair interpretation of the operations of that business or not. For example, the auditors will prove and give their opinion on whether the reported incomes, payments, profit/loss, possessions, obligations, and equity are specified at their true and fair standards or if there is any material misstatement.
 

New regulations after VAT implementation in UE

 
The VAT tax rate of 5% was introduced in 2018 in the UAE and since then, companies had to pay attention to a series of new regulations involved, such as filling the VAT returns. However, if your company is not subject to VAT registration, the obligation of preparing the annual financial statements must be considered. This means that an audited report comprising all payroll calculations, income statements, financial adjustments, and other related information will be part of the annual financial statements. One of our accountants in Dubai can provide complete support when preparing the annual financial statements for your company in Dubai. We remind that if you think of outsourcing the accounting services for your business established in Dubai, you can hire our accounting firm in Dubai and let us take care of such aspects for your firm.
 

The most common set of reports for financial statements

 
For the general purpose of the annual financial statements, a set of reports must be issued, and these must comprise the balance sheet, the statement of retained earnings, cash flows, and income statement. Here is additional information:
 
  1. The income state - this report provides information about the expenses and the incomes of a company for a whole year, for example. It offers complete information about the activities of the company.
  2. The balance sheet – it comprises the liabilities, the assets, and equity of a company, revealing a complete evaluation of the capital structure of a firm. This is an important financial statement that reports the company cash flow among other things.
  3. The cash flows statement – this document reveals the ways in which the cash was used in the company for a period of time, for example, for an accounting year. Varied financial notes are comprised.
  4. The statement of shareholders equity – this is the type of report that provides information about the transactions that implicate the equity accounts for a specific period. A full report will comprise details about dividends and transactions involved.
 
The above-mentioned reports are normally presented with other financial notes and analyses for a specific accounting period and are part of the annual financial statements for companies in Dubai. If you would like to know more about this kind of report, feel free to talk to one of our accountants in Dubai. Our experts can provide complete support and guidance for all sorts of financial matters for your company in Dubai.
 

What is the fiscal year?

 
The fiscal year represents a period of 12 months in which a full accounting cycle takes place in a company. However, the fiscal year is not meant to be the same as the calendar year, but in the case of the UAE, this starts on January 1st and ends on the 31st of December. The preparation of the annual financial statements for companies in Dubai can start before the fiscal year is over, leaving time for different adjustments and modifications.
 

Choosing our team for accounting services in Dubai

 
If you would like to benefit from complete accounting services for your business in Dubai, you should solicit the support of our accounting firm in Dubai. The main purpose is to provide the type of services a company needs, relying on the experience of a professional team of accountants. Bookkeeping, payroll, audits in Dubai, annual financial statements, tax consultancy, plus additional accounting services can be offered for your business in Dubai, regardless of the size of your company. Even though the UAE offers a great tax system, it is recommended to have a complete idea about the accounting aspects of your business, and this is were our experienced accountants in Dubai can help.
 

Investing in Dubai

 
Dubai is for many years an important and well-developed financial sector in the Middle East and the choice of international entrepreneurs who benefit from a generous business climate and a multitude of possibilities. The tourism sector, ITC, automotive, engineering, financial services, research & development are only a few of the significant fields in which foreign investments are directed. Here are some facts and figures about the UAE that you might find interesting:
 
  • about USD 140,000 million was the total FDI registered for UAE in 2018;
  • the 2020 Doing Business report provided by the World Bank ranks UAE 16th out of 190 economies in the world;
  • the UK, France, Saudi Arabia, the USA, and India are the main foreign investors in the UAE;
  • the finance, the real estate sector, and the insurance field are preferred investment areas for foreigners.


Please feel free to contact our audit firms in Dubai, if you need to prepare the annual financial statements in Dubai, or if you need accounting services in Dubai.