The Accounting Board (AAB / the board) of the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) has officially issued the exposure draft of financial accounting standard (FAS) on “Promotional Gifts and Prizes”.

The objective of the proposed standard is to provide accounting and financial reporting principles for recognition, measurement, presentation and disclosures applicable to promotional gifts and prizes awarded by the Islamic financial institutions to their customers, including quasi-equity and other investment accountholders.

On the occasion of approving the exposure draft in principle, Mr. Hamad Al Oqab, chairman of the AAB, stated: “Many financial institutions offer additional benefits, such as promotional gifts or prizes, to customers who hold investment accounts with the institution. This standard is bridging the existing gap (lack of certain guidance) by providing the much needed guidance on the accounting treatments of such gifts and prizes.”

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: link