28 July 2025

PR/08/2025

AAOIFI’s Accounting Board (AAB) Translation Committee has finalised and approved for issuance the Arabic version of Financial Accounting Standard (FAS) 43 “Accounting for Takaful: Recognition and Measurement”. The English version of this standard was issued in December 2022.

This standard sets out the principles for the recognition, measurement and reporting of Takaful arrangements and ancillary transactions for the Takaful institutions. It aims to ensure that the Takaful institutions faithfully present the information related to these arrangements to the relevant stakeholders as per the contractual relationship between the parties and the business model of the Takaful business in line with the Shari’ah principles and rules. The requirements of this standard are duly aligned with the international best practices of financial reporting for the insurance business.

Furthermore, this standard provides principal requirements for the financial reporting (aligned with the global best practices) for Takaful arrangements as applicable to the participants’ Takaful fund (PTF) and participants’ investment fund (PIF), as well as, principles of recognition, measurement and reporting other ancillary matters, e.g., transactions between the funds and the Takaful institution / operator.

It supersedes the FAS 13 “Disclosure of Bases for Determining and Allocation Surplus or Deficit in Islamic Insurance Companies”, FAS 15 “Provisions and Reserves in Islamic Insurance Companies” and FAS 19 “Contributions in Islamic Insurance Companies”.

This standard is effective for the financial periods beginning on or after 01 January 2025.

The Arabic version of the standard can be accessed on AAOIFI website: Link