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UAE Ministerial Decision No. 114 of 2023 on Accounting Standards and Methods
UAE Ministerial Decision No. 114 of 2023 on Accounting Standards and Methods
The Ministry of Finance (MoF) has issued a Ministerial Decision No. 114 of 2023 on the Accounting Standards and Methods used for the preparation of financial statements which will be used as a starting point to calculate the taxable income for Corporate Tax purposes.
Key Highlights of the Decision:
Preparation of Financial Statements using Cash Basis of Accounting
A taxable person may prepare financial statements using the Cash Basis of Accounting, in any of the following instances:
- Where the revenue derived from the Business Activities does not exceed AED 3 million; or
- On application by the taxable person to the Authority
Consolidated Financial Statements
Regarding the preparation of Consolidated Financial Statements (“CFS”) of the tax group, the ministry provides that the CFS must be prepared based on the aggregation of financial statements of the parent company and each subsidiary, thereby eliminating all the intragroup transactions.
Applicable Accounting Standards
Financial statements must be prepared using International Financial Reporting Standards (“IFRS”).
However, Small and Medium-sized entities deriving income less than AED 50 million have an option of applying International Financial Reporting Standards for Small and medium-sized entities (“IFRS for SMEs”)
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