The Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) has held a roundtable, via video conferencing, on its exposure drafts of its Financial Accounting Standard (FAS) “Presentation and Disclosures in the Financial Statements of Takaful Institutions” and “Accounting for Takaful: Recognition and Measurement” on Monday, 21 February 2022. The roundtable, attended by around 70 participants and is the first of a series of public hearings for these standards on Takaful.

The roundtable agenda featured a session with a summary of the exposure draft, including the main objectives and concepts underlying financial reporting and the general presentation and disclosures for Takaful arrangements.

The discussions at the roundtable tackled key accounting and financial reporting issues related to Takaful and their respective treatment as proposed in the exposure drafts. The event concluded with an open floor discussion for further comments by the panellists and participants.

The event was chaired, by Mr. Omer Murshid, Consulting Actuary, United Arab Emirates based SHMA Consulting, who also delivered welcoming remarks for the event.

Mr. Mohammad Majd Bakir, Director, Professional Standards Development AAOIFI, presented an overview of the revision process of the AAOIFI Takaful FASs as well as key issues in the existing standards.

A keynote speech and overview of accounting for Takaful was delivered by Mr. Irshad Mahmood, Partner, Deloitte, Kingdom of Bahrain and chairman of the working group in which he addressed the primary accounting treatments proposed in the exposure drafts and significant changes compared with the existing FASs in Takaful and generally accepted accounting principles.

Mr. Omar Mustafa Ansari, Secretary General, AAOIFI, presented the discussion points and key issues on accounting for Takaful contracts. This included a moderated and interactive Q&A session shedding particular light on understanding the accounting and presentation requirements proposed in the exposure drafts.

AAOIFI expressly acknowledges and appreciates the support of the industry and expert participants who included professionals and subject matter experts from various fields and backgrounds and academicians and Shari’ah scholars. 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 raised to AAOIFIs Accounting Board (AAB) for further deliberation. The final standard is expected by the end of 2022. Those who are interested in providing comments on the exposure drafts may still do so by sending their feedback to accounting@aaoifi.com on or before 28 April 2022. The exposure drafts can be accessed through these links: Click here