Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) held the 14th meeting of the its Accounting Board (AAB) on 28 and 29 June 2019, at Hilton Kozyatağı, Istanbul, Turkey. The meeting was hosted by the Participation Banks Association of Turkey / Türkiye Katılım Bankalar Birliği (TKBB) and Accounting and Auditing Standards Authority / Muhasebe ve Denetim Standartlari Kurum (KGK).
The meeting started with a discussion on the exposure draft of the revised conceptual framework for financial accounting standards which aims to outline the concepts and core principles of accounting and financial reporting as a foundation for development of accounting standards and other relevant pronouncements. It also introduces the main objectives of underlying financial accounting and reporting by Islamic financial institutions.The exposure draft was reviewed in the previous board meeting but was brought back to this meeting to particularly align with the exposure draft on the Financial Accounting Standard (FAS) No. 1 before official issuance.
The Board also deliberated on the exposure draft of the revised standard FAS 1 “General Presentation and Disclosures in the Financial Statements of Islamic Banks and Financial Institutions”. It aims to align the accounting treatments with the global best practices and supercedes the existing FAS 1, based on the distinct information needs of the users of financial statements (prepared and published by Islamic financial institutions) and in line with the generally accepted accounting principles.
Furthermore, the board decided to develop a technical release covering and portraying illustrative financial statements that clearly enlist and order all the items of these statements in conformity to Shari’ah requirements and best practices in accounting and financial reporting.
The meeting, furthermore, reviewed the preliminary study and consultation note of finanical accounting standard on Waqf (as part of the Waqf standards development project).
Mr. Hamad Al-Oqab, Chairman of the AAOIFI Accounting Board, stated: “with the current board approaching the end of its 4-year term, during which 14 meetings have been held so far, we are very much pleased with the successful consummation of multiple projects undertaken during its mission. This meeting, in particular, tackled very important issues and agenda items, including the new framework and FAS1, which we hope will provide more rosbust underpinnings for developing new standards and reviwing exisitng ones, going forward”.
Mr. Omar Ansari, AAOIFI’s Secretary General, stated: “convention of AAB meeting in Turkey refelcts the reality that the participation banking industry has gained more traction over the course of past years in Turkey. At AAOIFI, we are always keen to be as close as possible to key players in different countries around the globe, towards betterment of our standards, and in order to evaluate the whole picture on the ground in terms of application or potential application of our standards and pronouncements”. On this occasion, he also extended thanks and appreciation to the hosts, the Participation Banks Association of Turkey (TKBB), KGK, and Albarak Turk for their great support and assistance towards successful convention of the ABB meeting and other public events held during the visit paid by AAOIFI to the Republic of Turkey over the interval 25- 29 June 2019. The week-long visit also included a training and sensitization session for the participation banking industtry in Turkey, an interactive public event (with the participation banking industry in Turkey), and a meeting with the banking regulatory and supervisory authority of Turkey (Bankacilik Duzenleme ve Denetleme Kurumu / BRSA).
Next meeting of the Board is scheduled to take place in mid-September 2019 in the Kingdom of Bahrain.