The Accounting Board (AAB) of Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) held its 29^th meeting on 25-26 September 2022, during which it deliberated on the feedback received from certain Islamic financial institutions (the institutions) operating in various markets, about the potential constraints in adopting and implementing the recently issued Financial Accounting Standards (FASs).

The board acknowledged that the institutions are facing certain practical difficulties in making the necessary procedural shift in their financial reporting requirements, specifically in terms of preparation of financial statements (considering non-availability of illustrative financial statements), changes in accounting policies and corresponding modifications in the accounting and IT systems. Accordingly, the board decided to defer the effective date of the recently issued AAOIFI FAS 1 “General Presentation and Disclosures in the Financial Statements” from 1 January 2023 to 1 January 2024. It also concluded that that early adoption of the standard shall be encouraged.

AAOIFI Technical Advisory and Interpretation Committee (TAIC) intends to issue a Technical Release for facilitating the implementation of new AAOIFI FASs, namely “AAOIFI Illustrative Financial Statements for Islamic Banks and Similar Institutions”, FAS link: click here