The Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), held two public hearing webinar to present and discuss the exposure drafts on the revised “AAOIFI Conceptual Framework for Financial Reporting by Islamic Financial Institutions” and the Financial Accounting Standards (FAS) on “First Time Adoption of AAOIFI Financial Accounting Standards”. The event was attended by more than 30 expert and professional banking sectors, audit firms, academicians from various parts of the world.
The AAOIFI Accounting Board in 2018 initiated the “AAOIFI Financial Accounting Standards (FAS) Review and Revision Project” in order to review and revise all existing FASs, if necessary. This resulted in the revision of AAOIFI “Conceptual Framework for Financial Reporting by Islamic Financial Institutions” and of FAS 1 “General Presentation and Disclosure in the Financial Statements of Islamic Financial Institutions”. The Board also considered it relevant to initiate the revision of the “Guidance Note on First Time Adoption of AAOIFI Accounting Standards by an Islamic Financial Institution” (Accounting Guidance Note No. 1).
The revised AAOIFI “Conceptual Framework for Financial Reporting by Islamic Financial Institutions” prescribes and improve upon the existing accounting treatments in line with the global best practices. This revised conceptual framework accordingly supersedes the existing AAOIFI conceptual framework.
The FAS on “First Time Adoption of AAOIFI Financial Accounting Standards” provides principles of financial reporting for Islamic Financial Institutions to be applied in the financial statements prepared for the first time according to the AAOIFI FASs, and to prescribe the transitional effects arising at the time of adoption. This FAS supersedes the AAOIFI Accounting Guidance Note No. 1 and should be read together with AAOIFI Shari’ah Standard No. 6 “Conversion of a Conventional Bank to an Islamic Bank”.
All industry feedback received—in the form of questions, comments, suggestions, and recommendations—during the public hearings, as well as, directly provided to AAOIFI will be collated and presented to the respective working groups and boards to to be considered, discussed and deliberated before the final issuance of the standards. This standard is expected to be finalized and issued by the end of 2020.
Multiple public hearings for AAOIFI FAS exposure drafts are scheduled to take place in different countries to obtain industry feedback.
Details of upcoming public hearings, with respect to dates and venues, will be announced shortly.