Business and trade are not limited to only one state or region in this technologically and digitally advanced era. Countries like the United Arab Emirates are a business hub in one continent and have business relations with numerous other countries across other continents. To carry out the trades smoothly and manage the payments effectively, following the accounting standards such as IFRS is critical.
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What are International Financial Reporting Standards (IFRS)?
The IFRS are the accounting frameworks, standards, and practices that the business organizations should follow irrespective of their country or region of origin. The purpose of standard is to gather and organize the financial information so the international accountants can easily understand.
Keep scrolling down this article to explore a brief guide about IFRS.
Top 7 Reasons to Comply With IFRS in the UAE
The trade and business relations on an international level are enjoying a boost. The currency, as well as its worth, differs in all the countries. These differences have the potential of giving rise to accounting challenges. Keeping the situation in view, the international accounting standards board (IASB) has issued the IFRS, which should be followed across the globe, to promote smooth business dealings at the international level.
Here are the top reasons you should comply with the international financial reporting system in the United Arab Emirates.
Generates Timely Financial Statement Information
The first reason to comply with international financial reporting standards in the UAE is to generate timely and accurate financial statement information.
One can use this financial statement information to plan for future growth and plans comfortably. More and more organizations are now hiring the best accounting firms in Dubai to get trained accountants onboard and manage their accounting systems according to IFRS
Boosts Understanding of International Financial Operations
The next reason to follow IFRS in the UAE is that it can boost the understanding of international financial operations. It can provide insights about international operations to the local businesses that want to expand. It will also help them boost collaboration at the international level and earn more recognition.
Ease for International Investors
One of the most important reasons behind IFRS compliance in the UAE is that it ensures ease for international investors. When your accounting framework and financial statements are prepared according to international standards, international investors will be able to explore them and decide about investing easily.
Transparent Data Management
One of the most important reasons to follow the international financial reporting standards is that it ensures transparent data management. When data is managed transparently, that too according to the international standards, it will boost the interest and trust of the local and international investors. So, follow IFRS and attract more and more investors through your transparent data and operations.
Highlights True Worth of Business
One of the major reasons behind IFRS compliance is that it will highlight the true worth of the business. If it is following the local accounting framework, the international world might not be able to understand it and fail to know its worth. On the other hand, in the opposite scenario, it will contribute to the success of the organization.
Ease in International Transactions
Another critical reason business organizations in the UAE should follow IFRS is that it will boost ease in international transactions. You can achieve profit according to the international standards and will be able to save extra expense, fees or ta charges. So, hire the service of the best accounting firm and let the experts manage your accounts according to international standards.
Ease in VAT Filing
The taxation system of every country of the world is almost different from each other. Value-added tax may be applicable in Middle Eastern countries of the world. However, the underlying conditions are different in each county. Following the IFRS in the UAE can also ensure ease in VAT filing, as profit and value of goods and services will be calculated according to international standards.
Follow the international financial reporting standards to gain more success!
If you are sticking to the locally practiced accounting and financial statement frameworks, it will portray the message that you are not ready for international dealings. On the other hand, if you are eager to expand business on the international level, following the IFRS is the key. If you are not aware of the details of these standards, do not get worried but contact professional and manage your financial statements efficiently.