The Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) held a public hearing, via video conferencing, on the exposure draft of its financial accounting standard (FAS) “Transfer of Assets between Investment Pools”, on Thursday, 7 September 2023, in collaboration with Arab Monetary Fund, UAE Banks Federation – United Arab Emirates and Bahrain Association of Banks (BAB), Kingdom of Bahrain.

This standard prescribes the financial reporting principles and disclosure requirements applicable to all internal transfers of assets between investment pools related to (and where material, between significant categories of) owners’ equity, quasi-equity and off-balance-sheet assets under management of an institution. It requires adoption and consistent application of accounting policies for such internal transfers in line with Shari’ah principles and rules and describes general disclosure requirements in this respect.

Ms. Farida Cassim, Manager, Professional Standards Development, AAOIFI, delivered welcome remarks and a brief overview of the draft standard.

The exposure draft was presented by Mr. Omar Mustafa Ansari, AAOIFI Secretary General who walked through the content and structure of the exposure draft, the rationale for issuance, and the need identified by the board for a revision of FAS 21 “Disclosure on Transfer of Assets”. The session was accompanied by an interactive Q&A round during which the participants raised specific questions and comments and received answers and explanation on the same. They also provided comments and suggestions for improvement of the draft.

This session was attended by a large number of experts, practitioners, and stakeholders in the areas of Islamic finance, Shari’ah, accounting, auditing, consulting, and the academia.

AAOIFI expressly acknowledges and appreciates the support of the industry and expert participants. All industry feedback received — in the form of questions, comments, suggestions, and recommendations — will be collated and taken back to the respective working group and will be raised to the board for further deliberation and consideration.

The exposure draft can be accessed through this link: