IFRS 15 affects how UAE businesses recognize revenue, especially service providers, construction companies, software firms, and trading companies.
Correct revenue recognition is essential for:
- Corporate Tax
- VAT
- Audits
- Investor reporting
The 5-Step Model
- Identify contract with customer
- Identify performance obligations
- Determine transaction price
- Allocate price to obligations
- Recognize revenue as obligations are satisfied
Common UAE Scenarios
1. Service Companies
Revenue recognized over time based on progress.
2. Construction Companies
Use %-completion or milestone methods.
3. Software / SaaS
Separate license and support components.
4. Trading Companies
Recognize revenue when control transfers.
VAT Impact
Timing must match:
- Invoice date
- Supply date
- Payment date
Incorrect IFRS 15 timing often leads to VAT errors.
Corporate Tax Impact
- Wrong revenue timing impacts taxable income
- CT adjustments may apply for advance payments
- Must reconcile IFRS revenue vs CT taxable revenue
Audit Documentation Needed
- Contracts
- Progress reports
- Invoices
- Performance proofs
- Revenue schedules
Conclusion
IFRS 15 is critical for UAE businesses in 2025, impacting VAT, CT, audits, and financial statements.
Call to Action
Advanced AnalytIQ helps UAE businesses implement IFRS 15 correctly for audit and corporate tax compliance.
Contact us for IFRS implementation support.