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Accrual Accounting Programme

About the Programme

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.

Legal Framework

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.

Benefits of the Accrual Accounting System

Performance

Improving assessment of government performance in terms of achievements, cost and effectiveness of the service provided.

Rationalisation

Providing a clear understanding of the government's success in managing its resources and rationalising its expenditures.

Analysis

Maintaining a record of financial statements over multiple years to enable effective comparison and insightful analysis of financial performance over time.

Resources

Enabling more effective comparisons between various resource utilisation options to support informed decision-making.

Cash Flow

Supporting the evaluation of the financial position and cash flow performance of federal ministries and entities.

Accuracy

Enhancing the ability to deliver more precise and comprehensive accounting records.

Transition to Accrual Accounting

Pillars of Accrual Accounting Programme

Coordinating with federal entities to ensure timely submission of financial statements by all federal entities, in compliance with the accrual basis of accounting.
Adopting global standards by staying current with the latest accounting practices and executing key transitional activities, including expanding the scope of financial statement consolidation and evaluating federal government assets to ensure quality and alignment with international best practices.
Utilising accrual-based financial reports to improve the effectiveness and efficiency of resource utilisation across the federal government and to support informed decision-making.
Preparing semi-annual financial statements for ministries and federal entities, along with consolidated financial statements for the federal government, in accordance with the accrual accounting framework.
Launching and operating a financial statement consolidation system to streamline the preparation of consolidated reports.

Achievements

Understanding and collecting appropriate information for the revenue and expense items transition.
Preparing the fixed assets register based on inventory data and assessment, and the calculation of consumption expenditure.
Inventory checking of fixed assets in accordance with the approved model stipulated in the manual.
Adopting the manual related to inventory checking and assessing fixed assets in federal entities.
Supporting federal authorities in preparing the opening balances and uploading them to the financial system.
Applying accrual accounting standards, policies and procedures in the federal government.
Preparing a detailed work plan for the transition of ministries and federal entities to accrual accounting.
Reviewing the unified structure of federal government accounts.
Studying the basis for determining the scope of consolidating financial statements, and developing the enablers to implement the accrual accounting process.
Providing continuous support to federal entities via the “Talbia” system (centre of excellence) and following up on monthly closings.
Coordinating with various departments (such as the Budget and Operations Department) to update laws and circulars and organise workshops.
Completing the preparation of financial system for the transition to accrual accounting, to register all transactions and balances.
Updating the system for the consolidation of financial statements, and conducting the necessary tests.
Preparing consolidated financial statements of the federal government in accordance with the accrual accounting standards.
Issuing the instructions for preparing the draft final account of federal entities for the year ending on December 31; and organising related workshops.
Organising workshops on accounting policies, effective use of the financial system, and performing closures using accrual accounting.

Accrual Accounting Programme

About the Programme

On this page

Legal Framework

Benefits of the Accrual Accounting System

Transition to Accrual Accounting

Pillars of Accrual Accounting Programme

Related links

Accrual Accounting Programme

About the Programme

On this page

Legal Framework

Benefits of the Accrual Accounting System

Transition to Accrual Accounting

Pillars of Accrual Accounting Programme

Related links

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