MoF Holds Workshop on Federal Government’s Transition to Accrual Accounting

As part of the ministry’s efforts to further enhance the government’s financial work, increase the efficiency of financial performance measurement across federal government entities, and to use the best government accounting methodologies based on international standards, the Ministry of Finance (MoF) recently held a workshop on the federal government’s transition from accounting on a modified cash basis framework to an accrual accounting framework. The workshop took place over three days at the Intercontinental Dubai Festival City hotel in Dubai.

Specialists from all ministries and federal government entities attended the workshop, which was aimed at raising awareness of the federal government programme to adopt accrual accounting. The workshop focused on three main criteria: tangible and intangible assets standard, revenues and receivables standard, and employee liabilities and benefits standard.

H.E. Mariam Al Amiri, Undersecretary Financial Management Sector highlighted the importance of accrual accounting programme - a vital pilot project for the Ministry of Finance and the United Arab Emirates.

H.E. said: “The Ministry of Finance has allocated the resources and support necessary to ensure success of our transition to accrual accounting. The ministry has also launched a comprehensive programme that would transition federal government’s accounting framework from a modified cash basis to an accrual accounting framework that covers all financial operations.”

H.E. added: “This workshop aims to raise awareness of accrual accounting as part of an integrated programme to develop competencies and expertise among relevant federal government entities. This is an important step, given that the programme is at a critical stage as we transition to accrual accounting.” 

During the first day, the standard of tangible and intangible assets, and accounting directions regarding preparing the opening balances of assets for the first time were discussed. The workshop also sought to raise employees’ understanding of the differences between accounting on a modified cash basis and accrual accounting for fixed and intangible assets, property, and equipment. This was in addition to educating the participants on how to define accrual accounting for fixed assets through acknowledgement, conditions of initial and subsequent measurements, and preparation of the fixed assets register.

On the second day, the financial revenues and receivables standard was defined, along with the accounting guidelines on preparing opening balances of revenues for the first time. The differences between accounting on a modified cash basis and accrual accounting with regards to revenues and receivables were also explained, in order to enhance the employees’ knowledge and understanding. Also clarified were the types of revenue from reciprocal and non-reciprocal transactions, related acknowledgement terms, and the way to register them on an accounting basis.

The third and final day of the workshop was devoted to introducing the standard of employee liabilities and benefits, in addition to touching on accounting directions on the preparation of opening balances of employee liabilities and benefits for the first time. The third day of the workshop also laid out the difference between accounting on a modified cash basis and accrual accounting in terms of accounting expenses. The focus was also on explaining the types of liabilities (receivables, accrued and allocated expenses), and clarifying the types of employee benefits and the extent of their impact on the financial position statement.