Migration to IFRS rises
As signals of an upturn in various sectors of economy become more prominent, senior accountants based in the UAE point to a "speeding up of migration of companies" to the International Financial Reporting Standards (IFRS) promulgated by the International Accounting Standards Board (IASB).
"As far as the UAE is concerned I would say there is a migration of companies to the IFRS standards. There is an urgency to find a convergence between the IFRS and other accounting standards. And it's becoming less onerous for companies [to migrate to IFRS]," said Amanda Line, the Managing Director of the Institute of Chartered Accountants of England and Wales (ICAEW), Middle East.
"As an accounting body, we support the IFRS. It is the principles based framework which we believe is the best way to reflect the financial situation of a company."
Newly introduced guidelines for small and medium scale enterprises by the IASB has also made it easier for the smaller companies to follow the IFRS, Line said.
She added that ICAEW has been emphasising on tenets of transparency in its courses and that the UK body plans to run awareness campaign to promote the tenets of IFRS this year.
There are no exact or round figures for the number of companies in the UAE that would migrate to IFRS this year, but the number is expected to be high.
About 113 companies across the world either strictly enforce IFRS accounting principles or permit its use. In the UAE while the regulators like the Dubai Financial Services Authority and Emirates Securities and Commodities Authority ask companies listed on the stock exchanges to follow the IFRS, the company laws in various emirates of UAE have no specific guidelines in this regard. However most banks in the UAE call upon companies to adhere to IFRS to secure financing.
Most of the free zones in the country have also enforced IFRS guidelines for registered companies.
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