Bookkeeping (and accounting) involves the recording of a company’s financial transactions. The transactions will have to be identified, approved, sorted and stored in a manner so they can be retrieved and presented in the company’s financial statements and other reports.
Here are a few examples of some of a company’s financial transactions:
The transactions will be sorted into perhaps hundreds of accounts including Cash, Accounts Receivable, Loans Payable, Accounts Payable, Sales, Rent Expense, Salaries Expense, Wages Expense Dept 1, Wages Expense Dept 2, etc. The amounts in each of the accounts will be reported on the company’s financial statements in detail or in summary form.
With hundreds of accounts and perhaps thousands of transactions, it is clear that once a person learns the accounting software there will be efficiencies and better information available for managing a business.
Bookkeeping is part and parcel of every running business. It helps the companies to track their expenses to ensure effective financial management. Not only this, step-by-step deployment of the accounting cycle enables the companies to provide better insights to the stakeholders, potential investors, and quantitative information of monetary assets to the state institutions for audits. For this purpose, the business people in Dubai and across the UAE have to ensure compliance with universal accounting standards for higher transparency and accuracy of financial records.
All businesses follow accounting standards quite well. If you are new to the business and don’t know any detail about this – The article is aimed to help you understand different types of standards used internationally and the one recommended for managing business accounts for regulations compliance in UAE.
The companies adopt different formats and rules to manage their accounting record. In this regard, Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS) are two of the most frequently used bookkeeping principles.
International Accounting Standards Board (IASB) has issued IFRS as the international accounting standard for accomplishing the tasks and activities of financial management. It deals with particular types of events and transactions for financial reporting. The IFRS explains a comprehensive way of working for the accountants to maintain their records. The set of principles are designed to ensure a common language that is well understood by the business people and accounting companies across the world.
GAAP is comprised of all essential principles and rules to deal with the intricacy, complexities, and accounting legalities for managing corporate accounting. GAAP is the foundation of accounting methods as approved and used by the Financial Accounting Standards Board (FASB). The deployment of GAAP requires extensive accounting services because it is used to manage balance sheets, revenue recognition, and outstanding classification of items and shared estimations for public disclosure.
The Securities and Commodities Authority (SCA) has made it mandatory for the businesses to comply with IFRS as stipulated by the Central bank of the UAE. So, all the companies listed in the NASDAQ Dubai (Formerly known as DIFX), Dubai Financial Market (DFM), or Abu Dhabi Securities Exchange (ADX) is required to manage their accounting records in accordance with International Financial Reporting Standards (IFRS). Therefore, all the companies listed legally on the Abu Dhabi Securities exchange from 2003 onwards are supposed to submit the IFRS financial statements.
Although it is not binding on the businesses that are not listed in the mentioned exchanges, it is suggested to implement IFRS as soon as possible to avoid complications and ensure transparency. If you ever think of opening a company in UAE, you can always search top accountant firms near me on the internet and avail your best services for your company. All the accountant firms in Dubai offer top-notch services, and they also give you some financial consultation. They are really helpful and trustworthy.
In the past, there was no pre-defined standard for the businesses in the UAE, but recently, the state has recommended the businesspeople to deploy IFRS for accounting tasks and activities. Sometimes, the business people get confused to decide what to consider using for their financial regulations compliance.
Accounting is essential for every organization located anywhere in the world, including the UAE. It is a process where you record, measure, classify and verify financial information. Also, accounting helps you know where you have used your company funds, and you can know the value and nature of your company’s liabilities.
All the companies functional in UAE are supposed to adopt the IFRS method. Remember! Transparency and corporate ethics are always to be followed. The accounting of your company has to be done with integrity. To facilitate this requirement, you need to hire top accounting services in Dubai to ensure the accuracy of record-keeping and compliance with the standards.
Searching for accounting bookkeepers near you? Contact Us to ensure compliance with the latest rules and regulations in the financial management!