Introduction to Real Estate Accounting
Accounting for real estate in Dubai plays a crucial role in managing one of the fastest-growing industries in the UAE. According to reports, more than 35,000 residential units were delivered in 2019, with 2020 set to break records before global challenges hit. The real estate market remains dynamic, and businesses must maintain accurate accounts to survive and grow.
With complex regulations and evolving international standards, real estate companies in Dubai need professional accounting support. Mubarak Al Ketbi (MAK) Auditing provides specialized accounting, auditing, and advisory services tailored to the property sector.
Life Cycle of Real Estate Business
To understand accounting needs, we must look at the real estate life cycle. It usually involves:
- Land acquisition.
- Project planning and financing.
- Construction and development.
- Sales and leasing.
- Property management.
At every stage, accurate records are vital for compliance, decision-making, and investor confidence.
Accounting Standards in Real Estate
Real estate accounting follows several international standards. These include:
- IAS 40: Investment Property.
- IAS 16: Property, Plant & Equipment.
- IFRS 15: Revenue from Contracts with Customers.
- IFRS 16: Leases.
- IFRS 13: Fair Value Measurement.
Applying these standards ensures financial statements are transparent, comparable, and reliable.
IFRS 15 and Real Estate Industry
IFRS 15 introduces a five-step model for revenue recognition. In real estate, this model applies to contracts, sales, and leasing agreements.
The Five-Step Process:
- Identify the contract with the customer.
- Identify separate performance obligations.
- Determine the transaction price.
- Allocate the transaction price to obligations.
- Recognize revenue when obligations are satisfied.
For property developers, this ensures revenue is recognized accurately during construction and sales.
Benefits of Professional Real Estate Accounting
1. Accuracy and Error Reduction
Maintaining accounts in-house often leads to errors. Hiring experts reduces risks and ensures accuracy.
2. Organized Process
With professional services, books are updated regularly, helping businesses track revenue and profit clearly.
3. Fraud Detection
Experts analyze gaps in procedures and recommend ways to reduce fraud risk.
4. Policy and Technology Updates
Professionals remain updated with changes in laws, standards, and accounting software, ensuring compliance.
5. Simplified Taxation
With proper documentation and auditing, businesses can pay taxes smoothly and avoid penalties.
Why Real Estate Firms Need Accounting Experts
Dubai’s real estate market is highly competitive. Investors, developers, and property managers must comply with VAT, manage cash flows, and maintain transparency with stakeholders. Professional accountants from Mubarak Al Ketbi (MAK) Auditing provide tailored solutions to handle these challenges effectively.
🥇 What Can Help – Mubarak Al Ketbi (MAK) Auditing
Real estate accounting is complex, but with professional support, businesses can grow stronger. Mubarak Al Ketbi (MAK) Auditing helps real estate companies with compliance, financial reporting, and tax advisory. Remember, a stitch in time saves nine—solving accounting issues early prevents bigger problems later.
For more information visit our office:
- đź“Ť Saraya Avenue Building – Office M-06, Block/A, Al Garhoud – Dubai – United Arab Emirates
- đź“ž Contact/WhatsApp: +971 50 276 2132
