IFRS standards play a crucial role in global financial reporting, providing a global language for business affairs so that company accounts become more comprehensive. IFRS implementation has a huge impact on several aspects of a company, including financial reporting systems, taxes, treasury, cash management, and more. Since it requires a change that comprises employees, processes, and systems, IFRS impact assessment & implementation is a tedious task for companies in the UAE. CDA is an all-in-one solution to assist companies to implement IFRS Implementation and Impact Assessment in UAE considering the requirements of the business.
The recently applied International Financial Reporting Standards (IFRS) have impacted the UAE companies to a large extent. Many firms started the application process late and are now trying to pull alongside.
These new standards are causing a lot of precariousness in terms of both income statement and balance sheet presentation.
IFRS standards are International Financial Reporting Standards that encompasses a set of accounting titles that decide how transactions and other accounting procedures are required to be entered in financial statements. It is steered when a new-fangled or revised accounting standard is executed in any business from a precise time.
So as to comply with the necessity of new challenges in the economy or for better performance of the financial statements, the International Accounting Standards Board (IASB) issues new IFRS or reissue the existing standards with suitable modifications. IFRS impact assessment is an evaluation carried out usually when new or revised accounting standard is implemented in business from a particular date.
IFRS Standards are very significant to businesses all over the world because it is a source of generally equivalent statistics. It pays to economic efficacy and helps investors recognize chances and risks across the world to improve capital distribution. IFRS sends general guidelines for the footing of monetary statements.
It is Imperative to begin IFRS impact assessment as it needs: -
The following information is required to conduct the IFRS Impact Assessment: -
For effective IFRS implementation and impact assessment activity, CDA has a team of qualified professionals who are experienced in getting things done in the right way, following the International Standards. CDA experts deal with the following three big IFRS accounting canons that have hit UAE companies recently and caused unpredictability.
IFRS 9 is an International Financial Reporting Standard issued by the International Accounting Standards Board (IASB). It reports about the accounting for financial instruments. The IAS 39 Recognition and Measurement is replaced with IFRS 9 standards.
IFRS 9 encompasses three main topics: -
IFRS 9 presents a rational approach for: -
CDA professionals cover the following areas for the IFRS 9 Financial Instruments Impact Assessment
IFRS 15 is an International Financial Reporting Standard addressed by the International Accounting Standards Board. It provides guidelines on accounting for revenue from contracts with customers. It became effective in January 2018.
Recognize the contract with a customer
Recognize all the individual performance obligations within the contract
Decide the transaction price
Distribute the price to the performance obligations
Identify revenue as the performance obligations are fulfilled
CDA experts take over the following areas for the IFRS 15 Impact Assessment.
IFRS 16 is an International Financial Reporting Standard addressed by the International Accounting Standards Board. It gives directions on accounting for leases. IFRS 16 was issued in January 2016 and is effective for most companies that report under IFRS since 1 January 2019. IFRS 16 replaced the earlier leasing standard, IAS 17.
CDA connoisseurs manage the following areas for the IFRS 16 Impact Assessment: -
The implementation of the new IFRS standards has been a huge task for companies in the UAE to adopt because many had not started the process early. It means that there is a lot of work to be done by the end of the year rather than throughout the period. It also necessitates a lot of work from the IT side. Several organizations have been caught unprepared by the signature, scale, timing, and degree of the changes.
CDA experts are a one-stop solution for this problem. CDA’s well qualified and certified professionals can take care of these areas and handle the situation in a better way to solve those issues that you face in the implementation process of IFRS according to the nature and needs of your business.
We broadly support our clients with meeting the IFRS reporting necessities and upholding and developing the related practices.
Besides offering IFRS implementation and impact assessment services in Dubai and across the UAE, CDA also efficiently handle CFO Services, Auditing Services, Accounting & Bookkeeping Services, Accounting Software services, Due Diligence Services, and Tax Filing & VAT Consultancy services in Dubai on time according to the convenience of our good clients. Our customer-centric approach is well appreciated, and we promise a better than the best service to your business.
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International Financial Reporting Standards are a group of accounting standards invented by the International Accounting Standards Board which became the worldwide standard for the preparation of financial statements of an incorporated organisation.
By adopting IFRS: Equivalent/Uniform presentation of financial statements, making comparisons easier, Companies with subsidiaries can use one accounting language company-wide, Companies can also benefit by using IFRS if they want to boost capital abroad/Foreign markets.
IFRS defines revenue as a gross inflow of economic benefit leading to a rise in equity accounts, aside from direct equity contributions made by owners. This results in differences in how sales, service and deferred revenue are recognized and reported.
IFRS brings consistency to accounting system as a single accounting language. It assists businesses for making better financial decisions. The IFRS Foundation sets the standards to ensure:Transparency, Accountability, Efficiency in the business functioning
The introduction of IFRS 16 will cause a rise in leased assets and financial liabilities on the record of the lessee, while Earnings before Interest, Tax, Depreciation and Amortizations of the lessee increases. It grants considerable discretion and variety of options to mitigate the impact on key figures, thus addressing the knock-on effects. a number of the impact of IFRS 16 are often mitigated by restructuring business relationships. And, there also are options available should some lease contracts be maintained.
Audited financials statements of previous two yearsAccounting manuals, All details of various types of Agreements/ Contracts/ relevant Invoices., Documents showing Classification of Financial Assets & Financial Liabilities , Other relevant information, supporting documents as and when required.
As per IFRS 9 – Financial Instruments and their classification, preparation is denoted which includes: Classification & measurement of Financial Assets & Financial Liabilities, Impairment of financial assets & liabilities, Disclosure requirements as per standard.
The concept of ECL falls under the context of IFRS 9. Expected Credit Loss (ECL) is the probability-weighted estimate of credit losses over the expected life of a Financial Instrument. It allows the company to foresee the possibility of risks and losses in its financial statements. Hence, reducing the impact of overstating the revenues
The macro economic factors considered are: Inflation rate in the economy, Foreign exchange rate, Price levels of crude oil and GDP of the country, Government policies and implementation, Time value of money.
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