The Accounting Board (AAB) of Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) held its 20th meeting via video conference on 5 September 2020. The agenda of this meeting was confined to the discussion and finalization of the revised AAOIFI “Conceptual framework for financial reporting”.
The revised conceptual framework supersedes the existing conceptual framework and prescribes improved accounting treatments and presentation in line with global good practices.
The board deliberated on the proposed changes to the exposure draft, issued in 2019, in view of the comments made by the AAOIFI Shari’ah committee and the respective working group, as well as the comments received at the public hearing stage and accordingly adopted the final standard and approved it for issuance.
A comprehensive conceptual framework aims to provide a frame of reference about the fundamental principles required for setting accounting standards and forms a basis for resolving accounting differences in a manner suitable and in compliance with Shari’ah principles and rules.
On the occasion, Mr. Hamad Al Oqab, Chairman, AAOIFI Accounting Board, stated: “during these unprecedented times, the board has continued with its regular meetings, including at the level of working group, and has exerted extensive efforts over the course of development process. Fortunately, on this 20th AAB meeting, the board approved in principle the revised AAOIFI conceptual framework”. He added that “the revised AAOIFI conceptual framework aims to outline the concepts and core principles of accounting and financial reporting, and shall serve as the foundation for the board in its process of developing AAOIFI’s financial accounting standards and other relevant pronouncements.”
The revised conceptual framework, after completion of the due process and incorporation board’s instructions and suggested changes, will be issued shortly.