PR/14/2025

30 December 2025

The Accounting and Auditing Organization for Islamic Financial Institutions’ (AAOIFI’s) Accounting Board (AAB / the board) has officially issued the exposure draft (ED F1/2025) of AAOIFI Financial Accounting Standard (FAS) on “Direct Costs: Determination, Attribution and Reimbursement”.

The proposed standard aims to reduce divergence in practice in accounting and financial reporting treatment in respect of costs and expenses, and their recoverability / reimbursement and also aims to mitigate the risk of misapplication or misinterpretation of Shari’ah principles and rules. It is also expected that the standard will support the Islamic financial institutions in achieving greater discipline and consistency in pricing, execution and reporting of Shari’ah-compliant transactions.

On this occasion, Mr. Hamad Al Oqab, chairman of the AAB, stated: “The board is committed to strengthen the integrity, transparency and consistency of financial reporting within the Islamic finance industry, and we hope that this standard will bring greater harmony and will help in better  implementation of Shari’ah principles and rules” He further expressed: “We sincerely thank the AAB members, working group members and AAOIFI’s secretariat for their unwavering dedication and commitment towards improving financial reporting.”

To obtain industry feedback, AAOIFI plans to hold a number of public hearing events for the exposure draft during 2026.

The exposure draft can be accessed on AAOIFI website through the: LINK