AAOIFI Accounting Board held its 25th meeting and approved in principle two final standards, revised FAS 1 and “Financial Reporting for Zakah” and the exposure draft on “interim financial reporting”

The Accounting Board (AAB) of the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) held its 25th meeting on 2-3 September 2021 via video conferencing.

The meeting commenced with discussion and an update report on standards development and implementation for AAB which included its output for the period from January to August 2021. During the period, 17 working group meetings and more than 33 short sub-committee and executive meetings have been held for development of multiple AAB ongoing projects. Additionally, 4 public hearing events and 2 roundtable events were held on the issued exposure drafts.

The board had also on its agenda the finalisation of two standards – revised FAS 1 and “Financial Reporting for Zakah” and the approval for the exposure draft on interim financial reporting.

The board deliberated on the proposed changes to exposure draft on “Financial Reporting for Zakah” (i.e., revised FAS 9 “Zakah” issued in 2019) as well as exposure draft on “General Presentation and Disclosures in the Financial Statements of Islamic Banks and Financial Institutions (Revised)” (i.e., revised FAS 1 issued in 2020) and in view of the comments provided by the AAOIFI Shari’ah committee and the respective working groups, as well as the comments received at the public hearing stage, the board accordingly adopted the final standard and approved it for issuance.

The board’s suggestions and comments on the exposure draft on “Interim Financial Reporting” will be provided to the respective working group and as per the requirements of the board and working group, the secretariat will initiate the final process of issuance of the exposure draft.

The board also discussed the working group’s recommendations on the need to withdraw or revised FAS 26 “Investment in Real Estate”. The board didn’t reach a final conclusion on the way forward and decided that further evaluation of the benefits and drawbacks of withdrawal vis-à-vis revision of the standard shall be made before submission of the final decision to a voting process.

On this occasion, Mr. Hamad Al Oqab, Chairman, AAB, stated that “this meeting, in particular, tackled very important issues and agenda items, including the revised FAS 1, Zakah and interim financial reporting which we hope will provide the much needed guidance to the industry in all relevant respects”

AAOIFI plans to hold a series of public hearing events for new standards (exposure drafts) via video conferencing. Details of the public hearings scheduled for 2021 with respect to the newly developed FASs will be announced in due course for participation by the industry stakeholders.

All AAOIFI standards can be accessed exclusively by subscribers to the digital version of AAOIFI standards, and free subscription can be attained on the AAOIFI website: http://www.aaoifi.com

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