UAE Accounting & Tax Glossary

Ledger

A ledger is a book or database that is used to record financial transactions.

Liabilities

Any financial obligation or debt owed by a business — including loans, accounts payable, VAT payable, and accrued expenses. UAE businesses must clearly distinguish between current liabilities (due within 12 months) and long-term liabilities on their balance sheet.

Licence (Trade Licence)

The legal authorisation issued by UAE authorities permitting a business to operate specific commercial activities.

Limited Liability Company (LLC)

A limited liability company (LLC) is a type of business entity that provides its owners with limited liability protection.

Liquidity

Liquidity refers to a company's ability to meet its short-term obligations.

Lock-Up Period

A lock-up period is a contractual agreement between a company and its investors that restricts the sale of the company's shares for a certain period of time.

Mainland Company

A UAE company registered with the Department of Economic Development (DED), licensed to trade across the UAE without geographical restrictions.

Management Accounts

Internal financial reports — typically monthly or quarterly — prepared for business owners and management rather than for regulatory filing.

Marginal cost

Marginal cost is the additional cost incurred by a company for producing one additional unit of a good or service.

Marginal cost calculation

To calculate marginal cost, you need to determine the change in total cost and the change in the quantity of goods or services produced.

Markup

Markup is the amount added to the cost of a product to determine the selling price. It is calculated by dividing the difference between the selling price and the cost by the cost and expressing the result as a percentage.

Markup calculation

To calculate the markup as a percentage, you would divide the markup by the cost and multiply the result by 100.

Finances Glossary

Glossary