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The Accrual Accounting System is a comprehensive programme launched by the UAE Ministry of Finance to shift from the modified cash accounting framework to a full accrual accounting model, in line with the federal standards. The implementation of the Accrual Accounting System enhances the efficiency of financial planning and aligns federal accounting practices with international best practices. This programme is part of the ministry’s commitment to manage and develop the federal financial resources efficiently and innovatively, while meeting the requirements of the International Monetary Fund (IMF) and global competitiveness benchmarks. This makes the Ministry of Finance one of the leading ministries regionally and globally in managing public financial affairs. As the first Arab country to implement the accrual accounting system, the UAE enhances its regional and global leading position in adopting advanced public financial management and accounting practices.
The Accrual Accounting Programme is based on Federal Decree Law No (26) of 2019, which states that this programme shall be applied in a phased manner. The federal entities were divided into groups to facilitate the implementation of the accrual accounting, and the opening balances of the federal entities were prepared and successfully uploaded to the system. As of January 1st, 2021, federal entities started applying accrual accounting to carry out all transactions and monthly closings.
The Ministry of Finance has implemented the Accrual Accounting Programme based on Cabinet Resolution No (35/3/6) of 2013, Resolution No (2/2) of 2017 regarding the adoption of the Manual of Federal Government Accrual Accounting Standards, and Cabinet Resolution No (21/3F) of 2021 on the transition of the federal government from the cash basis to the accrual basis of accounting.
The Ministry of Finance set the federal standards on the accrual basis of accounting, which were approved by the UAE Cabinet by virtue of Resolution No (2/2) of 2017. The federal standards on the accrual basis of accounting were then updated under Cabinet Resolution No (21/3F) of 2021 and Cabinet Resolution No. (17/2W) of 2024.
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