Under IFRS 15, revenue is recognised when (and in the proportion that) performance obligations to a customer are satisfied — not when cash is received. This matters most for: long-term contracts (revenue is recognised as work is completed, not at completion), subscription models (revenue is spread across the subscription period), and advance payments (cash received before work done is a liability, not revenue). For UAE corporate tax, revenue recognition follows the accounting treatment under IFRS — so getting this right in your books directly affects your tax liability.
Pro tip: If your business receives significant advance payments — deposits, retainers, annual SaaS subscriptions — ensure your accountant is spreading revenue recognition correctly. Recognising all cash received as immediate revenue will overstate income and inflate your tax liability.
See also: Accrual Accounting, IFRS, Profit and Loss Statement (P&L)
