The Accounting and Auditing Organization for Islamic Financial Institutions’ (AAOIFI’s) Accounting Board (AAB / the board) has officially issued the exposure draft of financial accounting standard (FAS) on “Financial Reporting for Islamic Investment Institutions (including Investment Funds)”.

The objective of the proposed standard is to establish the principles for financial reporting for Islamic investment institutions (IIIs), particularly prescribing overall requirements for the presentation, minimum contents and recommended structure of their financial statements to facilitate truthful and fair presentation in line with Shari’ah principles and rules. The exposure draft enhances the scope of the existing standard and intends to align the requirements with the newer AAOIFI FASs and the revised “AAOIFI Conceptual Framework of Financial Reporting”.

The proposed revised FAS improves upon, and once finalised will eventually supersede, the existing FAS 14 “Investment Funds”.

On the occasion of approving the exposure draft in principle, Mr. Hamad Al Oqab, chairman of the AAB, stated: “This standard addresses a broader scope than its predecessor standard, improving the financial reporting requirements for IIIs in light of the growth of the industry, while also addressing certain relevant issues. I appreciate the efforts of the board members and AAOIFI secretariat in bringing this proposed standard forward.”

To obtain industry feedback, AAOIFI plans to hold a number of public hearing events for the exposure draft during 2024.

The exposure draft can be accessed on AAOIFI website: ED Link