Real Estate Accounting in Dubai

Real Estate Industry Insights

Recently, the International Accounting Standards Board (IASB) has made alterations regarding IFRS-15, which replaces IAS 8 “Revenue” and IAS 11 “Construction Contracts”. The adoption of the standard came effective on Jan 1, 2018. The changes made in the standards is bound to bring drastic changes in the Electrical & Construction Industry (E&C). It will also have a significant impact on the Real Estate Industry. Let’s have a look at it.

IFRS 15 and Real Estate Industry

IFRS 15 deals with the Five-Step Model that now gets to implement on the real estate sector as well.

1. Identify the Contract with a Customer

The first step is to identify the contract with the customer with detailed modifications and ideally changes accordingly with situations.

2. Identify the Separate Performance Obligations in the Contract

The business should stand clear in defining and understanding the promised goods and services according to the contract. There can be numerous activities stated in an agreement, and each of them can be noted as a separate performance.

3. Determine the Transaction Price

In the third step, the business entity needs to determine the transaction price that will be charged based on the contract generated. The revenue generated from each distinct service will be different and will be ultimately referred to as a separate performance obligation.

4. Allocate the Transaction Price to Separate Performance Obligations

The set transaction price needs to be allocated to different performance obligations. In the real estate industry, this segmentation applies to the primary goods and services provided.

5. Recognize the Revenue Generated

The last move is to understand the revenue generated upon the completion of an obligation. It becomes vital that the different revenues are calculated, and the final value can be fetched out easily.

Benefits of Availing Real Estate Accounting

Once your handover the accounting department is handled by professional experts, you will be able to gain the following benefits:

1. Streamlined Accounting Process

From the initial start of hiring an accountant, you will see a change as the accounting books will be streamlined easily. Carrying out this process will help your business to know the level of revenue generation, and profits earned.

2. High-Level of Accuracy

There is a high probability that if the accounting process is carried out in-house, it might end up showing specific errors. Subject-matter experts are well-versed with the accounting aspects, and therefore, the chances of error turn out to be extremely less.

3. Cost-Effective Services

Hiring an accountant turns out to be cost-effective a vast amount gets saved on the operational cost, and every task gets channelized accordingly suiting the business needs.

4. Fraud Detection

Error detection turns out to be prominent only if an expert in a particular field. Accounting experts can figure out the loopholes at a glance of the company documents. If you have been investing continuously, but it brings no result, there exists a chance that fraud takes place at the internal premises. Having an accountant by your side helps you to detect such errors quickly.

5. Effective Payroll System

Payroll turns out to be one of the vital departments of any organisation as it deals with the payment process of the employees. After the company incorporation, you need to hire the right candidate for the right job. If the payroll system is not appropriately maintained, it might demotivate the employees, which will result in loss of productivity.

6. Updated Technology

Technology has driven the entire business world to the next level. Multiple accounting software gets launched every next day, and this generates confusion regarding which software to avail for. Accounting experts are well-equipped with the best and updated software and they are skilled to work on it. Carrying out the same process in-house might increase the training cost etc.

7. Market Insights

Professional experts end up dealing with numerous clients, with unique cases. Moreover, their professionalism demands them to keep a check on what is prevailing in the market. Your accounting partner will not only help you in understanding the basics but will also guide you in  business matters, which will turn out to be feasible for you to implement and grow your business.

Accounting serves to be one of the vital needs of any organization irrespective of the organization. Real estate stands as one of the dominating business segments in Dubai and demands accounting to streamline the process accordingly. Maintaining a correct book of accounts and records will help you to forecast the future of your business in an easy way, and to help you with it, JAXA Chartered Accountant is here. Experienced professionals holding a high experience in the accounting field are here to ease the process accordingly. Clients are provided with customized business solutions that make us stand as one of the best-chartered accountants in Dubai. To speak to our experts, do contact us today-we’d be glad to assist.