The Accounting Board (AAB) of the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) has officially issued financial accounting standard (FAS) 1 “General Presentation and Disclosures in the Financial Statements”, which supersedes the earlier FAS 1 “General Presentation and Disclosures in the Financial Statements of Islamic Banks and Financial Institutions”.
This standard was finalised by the board after extensive discussions and includes comments from regulators and industry experts from various jurisdictions, which were received during multiple public hearing and roundtable events.
Mr. Hamad Al Oqab, Chairman of AAB, stated that “this revised standard shall improve the presentation and disclosure requirements of the financial statements of Islamic financial institutions, and bring clarity and comprehensiveness to the presentation in line with the terminologies introduced in the recently issued AAOIFI financial accounting standards”.
The standard introduces the concepts of quasi-equity, off-balance-sheet assets under management and other comprehensive income to enhance the information provided to the users of the financial statements. It also provides definitions that are aligned with the accounting treatments prescribed in the recently issued AAOIFI FASs. The standard also provides consequential amendments to other standards to bring consistency in treatments.