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.

On this page
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.

Financial Balance
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
UAE Federal Budgeting System Timeline
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.
Related links
  • Emirates New Agency – WAM: Finance Ministry launches Phase II of Accrual Accounting Programme, October 14, 2020. To read the news, click here.
  • Emirates New Agency – WAM: Arab Finance Forum explores emerging trends in public finance, November 4, 2024. To read the news, click here.
  • UAE Accrual Accounting Guide. To view, click here (available in Arabic only).
  • Accounting Policies and Procedures Manual. To view, click here (available in Arabic only).