Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) held the 16th meeting of its Accounting Board (AAB) on 31 October and 1 November 2019 at its premises in the Kingdom of Bahrain.
The Board agenda for this meeting included the finalization of the exposure draft on “Ijarah” and the approval of issuance of two exposure drafts – “Financial reporting for by Waqf institutions” and “Financial reporting for Zakah”.
The finalized version of the exposure draft on FAS (Financial Accounting Standard) on “Ijarah” was presented to the Board with recommendations received from the working group, which deliberated on industry comments received during the multiple public hearing events that where held during the year. The exposure draft will be officially issued as a final standard after incorporation of Board conclusions and a final review by the Secretariat.
The Board discussed the exposure draft on the revised FAS on Zakah “Financial Reporting for Zakah” which aims to establish the principles of financial reporting related to Zakah attributable to different stakeholders of an Islamic financial institution. This was also done keeping in view the additional accounting and computations related matters set out in the Shari’ah standard 35 “Zakah”. The exposure draft was approved for issuance and will be available for opinions and comments by industry stakeholders.
The Board also deliberated on the exposure draft on “Financial reporting by Waqf institutions” for finalization and issuance. This was the second review of the exposure draft by the Board. The absence of a comprehensive standard and guidelines on accounting for Waqf gave rise to the need for a FAS on Waqf. This FAS on Waqf aims to establish accountability and transparency of Waqf institutions in a manner suitable and in compliance with Shari’ah principles and rules. This standard constitutes the final output in completion of the AAOIFI Waqf project.
The Chairman of the Board Mr. Hamad Al. Oqab expressed his appreciation, and congratulated the AAB and the AAOIFI Secretariat of their contribution to the global Islamic banking and finance industry and overall achievements made over the past four years. He further added that “the members’ dedication to ensure quality and timely issuance of standards is testament to the Boards’ commitment to the industry that has resulted in the approval of 7 financial accounting standards in four years”. He requested the members and the industry to maintain their support to AAOIFI for its continued success.
Details of public hearings scheduled for 2020 for the newly issued FAS will be announced for participation by the industry stakeholders. Issued exposure drafts can be accessed BY CLICKING HERE