FNC approves two draft federal laws, UAE will adopt an accrual-based accounting system

FNC approves two draft federal laws, UAE will adopt an accrual-based accounting system

The UAE parliament approved two draft laws amending provisions of the Federal Law No. 26 of 2019 on public finance, as well as the complementary budget to the UAE's federal budget 2022.

This came at the 13th session of the third ordinary term of the Federal National Council's 17th legislative chapter, which was chaired by Saqr Ghobash, Speaker for the FNC, today.

The approved amendments to the law include a new definition for consolidated final statements; several provisions to expand the scope of the public finance law to include government companies; and the introduction of some provisions regulating accounting standards applicable in the UAE.

The definition of a consolidated final account has been amended as follows:

"An annual report that includes the consolidated annual financial statements of the federal government, which is prepared by the Ministry based on financial statements submitted by federal authorities, in accordance with instructions specified in the annual financial circular issued by the minister."

According to the draft law, the UAE government will adopt an accrual-based accounting system, in line with the UAE’s accounting standards. When drafting their budgets, federal authorities must comply with the financial appropriation limits allocated to them by the law on linking the general federal budget.

These expenditures will be disbursed, provided that they are specified and payable, in accordance with the relevant applicable legislation.

Government companies, as determined by the cabinet under a proposal from the Ministry of Finance, are obligated to provide the Ministry of Finance with the required reports and financial data in the form, in line with the contents and dates specified by the ministry.

In accordance with a federal draft law on approving a complementary budget to the UAE's general budget for the 2022 fiscal year, the UAE general budget revenues for the 2022 fiscal year are estimated to increase by AED374,980,000, while the general budget expenses for the 2022 fiscal year are estimated to increase by AED1,232,358,000.

News Source: Emirates News Agency

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