Dubai Chamber first to adopt top accounting standards
As part of the Dubai Strategic Plan, Dubai Chamber converts fully to the International Financial Reporting Standards (IFRS) which has been adopted and implemented by over 100 countries seeking globalization
Under the mandate of the Dubai Strategic Plan 2015 announced by HH Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai last year, Dubai Chamber of Commerce & Industry is the first among the Government entities and local organizations to adopt the International Financial Reporting Standards (IFRS) which has been adopted and implemented by over 100 countries seeking globalization including France, Germany, Italy, Spain and the United Kingdom.
The International Accounting Standards (IAS) which is now known as International Financial Reporting Standards (IFRS) and is implemented by the International Accounting Standard Board (IASB) replaces national accounting standards and requirements as the basis for preparing and presenting group financial statements which are understood by all participating groups and companies irrespective of which ever part of the world they operate from. The main goal of IASB is to provide the world’s integrating capital markets with a common language for financial reporting.
Said Wael Abou-Shady, Finance Director, Dubai Chamber, “Earlier the Chamber followed the modified cash basis of accounting for income and the accrual basis for all expenses but immediately after the announcement of the Dubai Strategic Plan in February 2007 we converted to accrual basis and for the financial year 2007 we adopted the standards fully and it makes us proud to say that we are the first among Government entities and local organisations to implement IFRS as part of globalization.”
Added Wael, “In today’s increasing global economy, the adoption of common standards that require transparent and comparable information is welcomed by users of financial statements as it’s easier for companies located in different parts of the world to use a single set of high quality accounting standard that facilitate investment and other economic decisions across borders. The instant advantage of the standard is that it increases market efficiency and reduces the cost of raising capital.”
In order to convert to IFRS, the Chamber prepared an analysis of the difference between the existing system and the IFRS and to implement the new standard the Chamber had the appropriate resources such as the Oracle modules (CRM, A/P, HRMS, A/R, G/L, i/R) plus the skills of the professional staff with qualifications like CPA.
According to Wael, the most significant benefit of IFRS conversion is that the Chamber is trying to encourage the entire business community to implement IFRS and reduce the gap between companies when users or groups are reading their financial statements whether locally or internationally as this method makes reporting to parent company much easier. Also, the other benefits of adopting the IFRS system are immense as earlier the account receivables were maintained in separate accounts but now it forms part of the main accounts which makes it faster to trace your receivables at the click of a button which is accurate and easily understood by anyone following the new standard.
Besides Europe, the IFRS has become mandatory in many countries in Southeast Asia, Central Asia, Latin America, Southern Africa, the Middle East and the Caribbean while countries like Australia, Hong Kong, New Zealand, Philippines and Singapore have adopted national accounting standards, that mirror IFRS but the remaining exceptions to the global recognition of IFRS are the US, Japan and Canada who still follow their local accounting standards but have established timelines to adopt IFRS.
