Trial balance: what it means for UAE businesses.

What trial balance means

Also called: TB.

A trial balance is a list of every account in the general ledger with its closing debit or credit balance at a chosen date. If the books have been posted correctly under double entry, the two columns add up to the same total. It is the working bridge between day-to-day bookkeeping and the financial statements.

In the UAE, the trial balance is where several legal requirements meet. The Commercial Companies Law requires companies to prepare an annual balance sheet and profit and loss account using international accounting standards, and limited liability companies must have their accounts audited. The Corporate Tax Law computes Taxable Income from the accounting income in those statements, and Ministerial Decision No. 84 of 2025 requires audited statements where revenue exceeds AED 50 million or the business is a Qualifying Free Zone Person.

For an SME, a trial balance run at each month end and before every VAT return is a cheap control. A balanced trial balance does not prove the books are right, since a transaction posted to the wrong account still balances, but an unbalanced one proves something is wrong. Checking the VAT control accounts against the return catches errors before they need a voluntary disclosure.

How it works

• The accounting system lists each ledger account and its balance at a date; debit balances and credit balances are totalled separately.
• Before year end, an unadjusted trial balance is followed by adjusting entries for accruals, depreciation and provisions, giving the adjusted trial balance used for the financial statements.
• Balances are mapped to the balance sheet and profit and loss lines required by IFRS or IFRS for SMEs (Ministerial Decision No. 114 of 2023).
• The VAT output and input tax accounts at each quarter or month end should agree with the VAT return filed for that period.
• Auditors and the FTA often start from the trial balance and then test individual balances back to source documents.

Worked example

A Sharjah printing business runs its trial balance at 30 June 2026, the end of its second VAT quarter, before submitting the return.

Total debit balances	AED 1,845,000
Total credit balances	AED 1,845,000
Difference	AED 0
Net VAT payable per ledger at 30 June 2026	AED 18,400
Net VAT payable per draft Q2 return	AED 18,400

The trial balance balances and the VAT account agrees with the return, so the business can file with confidence that the figures tie up.

Common mistakes

• Treating a balanced trial balance as proof the books are correct, when a posting to the wrong account or a missing invoice will still balance.
• Filing a VAT return without checking the VAT control accounts in the trial balance against the return figures.
• Leaving old suspense or clearing account balances in the trial balance, which auditors and the FTA will ask about.

The law

• Federal Decree-Law No. 32 of 2021 on Commercial Companies, Article 27 (Accounts of the Company)
• Federal Decree-Law No. 47 of 2022, as amended, Article 20 (General Rules for Determining Taxable Income) and Article 54 (Financial Statements)
• Ministerial Decision No. 84 of 2025 on Audited Financial Statements, Article 2

Frequently asked questions

Is a trial balance the same as financial statements?

No. The trial balance is an internal working list of ledger balances. Financial statements present those balances in the format and with the disclosures required by IFRS or IFRS for SMEs, after year end adjustments. See the balance sheet and profit and loss statement entries.

How often should an SME run a trial balance?

At least at every month end and before every VAT return. Running it only at year end means errors are found months after they happened, when they are harder to trace and may already sit in a filed VAT return.

Related terms

General ledger · Chart of accounts · Month-end close · Year-end close · Audited financial statements. See every term in the UAE tax glossary.

For the full picture, read our guide: Month-end close for UAE SMEs: a practical checklist.

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