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As we enter 2025, businesses in the UAE must pay close attention to the evolving landscape of International Financial Reporting Standards (IFRS) renamed as IFRS Accounting Standards. Issued by the International Accounting Standards Board (IASB), these standards ensure consistency, transparency, and comparability of financial statements across international borders.
In this blog, we’ll explore the most important IFRS Accounting Standards updates relevant to UAE companies in 2025, what they mean for your business, and how N R Doshi & Partners Public Accountants LLC can help you stay compliant and competitive.
IFRS Accounting Standards in the UAE Context
The UAE has adopted IFRS Accounting Standards for all listed companies and many non-listed entities as part of its commitment to global financial integration. With the UAE’s focus on attracting foreign investment and maintaining its status as a global business hub, proper IFRS adoption is not just good practice—it’s essential.
Additionally, with the introduction of UAE Corporate Tax and increased regulatory expectations around environmental, social, and governance (ESG) disclosures, IFRS compliance has become a strategic advantage.
IFRS Updates to Watch in 2025
Key IFRS Changes Relevant to UAE Businesses
| Standard | Update Summary | Implications for UAE Businesses |
| IFRS 18 (New Standard) | Replaces IAS 1 – Introduces a new “statement of income and expenses” with clearer categorization | Businesses should start transition planning now for this 2027 standard to ensure timely adoption and comparability |
| IFRS 9 (Financial Instruments) | Clarifies expected credit loss models and classification rules | Banks, fin-techs, and leasing companies must refine credit risk models amid global uncertainty |
| IFRS 16 (Leases) | Updates around variable lease payments and disclosure | Real estate, retail, and hospitality sectors must reassess lease arrangements and disclosure quality |
| IFRS S1 & S2 (Sustainability) | First full year of climate and sustainability-related financial disclosures | UAE companies aligning with ESG goals and COP28 commitments are strongly encouraged to adopt these frameworks |
| IAS 21 (Amendments) | Clarifies treatment when a currency cannot be freely exchanged | Affects how UAE companies translate foreign subsidiaries’ results in countries with capital restrictions or hyperinflation |
What This Means for Your Business
- Comparable Reporting
Companies will have to use 2025 to:
- Assess impact on income statement structure
- Review internal reporting templates and KPIs
- Begin trial reporting under the new format
“IFRS 18 will fundamentally change how companies communicate performance. Businesses must prepare for increased scrutiny and comparability.” — N R Doshi IFRS Advisory Team
- Stronger Risk Recognition
The updates to IFRS 9 demand a forward-looking approach to credit risk and enhances disclosure requirements around financial risks. This especially affects banks, fin-techs, and leasing companies.
- ESG Reporting is Becoming the Norm
Companies are encouraged to align early to:
- Attract ESG-focused investors
- Improve transparency on climate-related risks
- Prepare for expected regional regulatory developments post-COP28
“Sustainability reporting is no longer a buzzword; it’s a requirement for global credibility.” — N R Doshi IFRS Advisory Team
- Lease Transparency
Many UAE businesses have complex lease structures, new updates emphasize:
- Variable lease payments
- Sublease disclosures
- Impact on balance sheet ratios and investor perception
- Compliance and Technology Investment
Adapting to these IFRS updates will require:
- Staff training on new standards
- Upgrading ERP/accounting systems
- ESG data management tools
While the upfront costs may rise, non-compliance can lead to penalties, reputation damage, or loss of investor confidence.
- Currency Restrictions
Amendments to IAS 21 clarify what to do when a foreign currency is not exchangeable at a normal market rate. Key changes include:
- Defining what constitutes a “lack of exchangeability”
- Introducing estimation techniques for exchange rates
- Providing disclosure requirements to enhance transparency
“This is crucial for businesses operating in or transacting with countries under sanctions or capital controls. Misjudging the exchangeability of a currency can result in material misstatements.” — N R Doshi IFRS Advisory Team
Examples in the UAE Context
- Real Estate Developer in Dubai: Needs to reassess lease liabilities and presentation under IFRS 16, impacting investor reports and lending ratios.
- Real Estate Developer in Dubai: Must enhance expected credit loss models under IFRS 9 to address macroeconomic fluctuations.
- Tech Startup in DIFC: Should begin climate-related financial disclosures to meet investor ESG expectations aligned with IFRS S2.
- Hotel Chain in Ras Al Khaimah: Will face changes in lease reporting and should evaluate sustainability disclosures to appeal to global tourists and partners.
- Trading Company in Jebel Ali with operations in Nigeria: Must estimate exchange rate for Nigerian Naira due to central bank restrictions, using new IAS 21 guidance.
Transition Planning Tips
Start your IFRS 18 and ESG journey early with these action points:
- Map existing financial statement structures to IFRS 18 format
- Identify sustainability risks and governance gaps
- Conduct training workshops for finance teams
- Engage advisors for readiness assessments
- Run dry-runs or dual reporting in 2025
Key Takeaways
| Takeaway | Action Point |
| IFRS 18 overhauls income statement presentation | Start transition planning and update internal charts of accounts |
| ESG disclosures are gaining ground fast | Build ESG reporting systems aligned with IFRS S1/S2 |
| Greater accountability for financial risks and leases | Invest in staff training and upgraded accounting software |
| Compliance is a strategic differentiator in UAE’s global market | Partner with IFRS experts to stay competitive and error-free |
| IAS 21 clarifies handling of non-exchangeable currencies | Review foreign operations to ensure proper estimation and disclosures |
N R Doshi & Partners Public Accountants LLC is one of the UAE’s most trusted names in audit and advisory services. Our team of IFRS specialists helps you interpret, implement, and leverage standards to ensure compliance and unlock long-term value.
Contact us today for a free consultation on your IFRS readiness for 2025.
Email: enquiries@nrdoshi.ae | Call: +971 4 352 8001 | Visit: www.nrdoshi.ae
