Below is a comprehensive outline detailing the process for preparing IFRS-compliant
books of accounts using Tally Prime ERP, based on the documents mentioned in your
email:
1. Document Collection and Verification
Before setting up your accounting system, ensure you have received and verified all
the necessary documents from the client. Based on your email, you already have:
Bank Statements: Covering the fiscal period 01-09-2023 to 31-08-2024.
VAT Returns: For tax compliance and input/output matching.
Trade License: Confirming the business's legal standing.
Expense Schedules: Detailing operational costs.
Additional Communication Records: Such as phone calls, WhatsApp messages, and audio
files that capture client instructions.
Additional items to request may include:
Sales Invoices: To record revenue accurately.
Purchase Invoices & Receipts: For all procurement and expense transactions.
Fixed Asset Register: Listing any capital assets and their depreciation methods.
Inventory Details: If applicable, for proper stock valuation.
Other Supporting Documents: Such as contracts, loan agreements, or any non-routine
transactions.
2. Setting Up Tally Prime
a. Create the Company Profile:
Configure a new company with the correct details.
Set the financial year from 01-09-2023 to 31-08-2024.
Ensure that the company’s accounting policies are in line with IFRS standards.
b. Chart of Accounts:
Develop a comprehensive chart of accounts that categorizes assets, liabilities, equity,
income, and expenses.
Make sure that each ledger is mapped to reflect IFRS requirements (e.g., separate ledgers for
operating and non-operating items).
3. Recording Transactions
a. Voucher Entry:
Bank Transactions: Enter all deposits, withdrawals, and bank fees as per the bank statement.
Use Tally’s bank reconciliation module to match transactions.
VAT and Tax Entries: Record VAT transactions by matching the details from VAT returns.
Expense & Income Entries: Input details from the expense schedules, sales, and purchase
invoices, ensuring that each transaction is supported by its respective document.
b. Data Verification:
Regularly verify that the entries in Tally match the supporting documents.
Use Tally’s reporting features to track and validate transaction consistency.
4. Adjustments for IFRS Compliance
a. Adjusting Entries:
Accruals & Deferrals: Make necessary adjustments for accrued revenues, expenses,
prepayments, and deferrals.
Depreciation & Amortization: Record depreciation on fixed assets in line with IFRS
guidelines.
Other Adjustments: Include provisions, impairment losses, and revaluations if required.
b. Policy Disclosures:
Ensure that all adjustments are accompanied by the relevant IFRS disclosures.
Document the accounting policies applied for each category of adjustment.
5. Reconciliation and Review
a. Bank Reconciliation:
Reconcile the bank statement with the entries in Tally to confirm that the cash balance is
accurate.
b. Ledger Reconciliation:
Compare ledgers against source documents (VAT returns, expense schedules, etc.) to verify
accuracy.
Run a trial balance report to ensure that all debits and credits are balanced.
c. Final Validation:
Cross-check key financial ratios and balances to verify that the overall financial position aligns
with the client’s operational records.
6. Generating Financial Statements
a. Standard Reports:
Trial Balance: As a summary check of all ledger balances.
Profit and Loss Statement: To capture operating performance.
Balance Sheet: To detail the financial position at period end.
Cash Flow Statement: To track inflows and outflows of cash.
b. IFRS Disclosures:
Prepare notes and disclosures required under IFRS, such as details on revenue recognition,
contingent liabilities, and segment reporting.
c. Customization:
Utilize Tally Prime’s customization features to format reports according to both management
requirements and statutory compliance.
7. Client Queries and Additional Information
Before finalizing the accounts, consider asking the client for:
Clarification on Non-Routine Transactions: Any one-off or unusual transactions not reflected
in standard documents.
Additional Source Documents: Such as detailed schedules for any accrued expenses or
revenues.
Accounting Policy Preferences: Specific treatments the client might have for revenue
recognition, depreciation methods, etc.
Verification of Outstanding Balances: For items that may require additional adjustments
(e.g., pending invoices or unrecorded liabilities).
8. Final Review and Submission
Review Process: Once all entries and adjustments are made, conduct a final review with the
client to ensure accuracy.
Feedback Loop: Allow the client to review the preliminary reports and provide feedback.
Finalization: Incorporate any changes based on feedback and then finalize the books for
statutory reporting and tax filing.
Conclusion
By following these steps—starting with the verification of documents, setting up
Tally Prime correctly, accurately recording transactions, performing necessary
adjustments for IFRS, and finally reconciling and reviewing your entries—you can
prepare a robust, IFRS-compliant set of books of accounts for Dhawk Al Asri Interior
LLC. This structured approach ensures that the financial statements are accurate,
compliant, and useful for both management decision-making and regulatory reporting.
If you need further details on any specific step or additional help with another
document head, feel free to ask!
