The Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) held, via video conferencing, two public hearing sessions both in English and Arabic on exposure drafts of its Financial Accounting Standards (FASs): “Presentation and Disclosures in the Financial Statements of Takaful Institutions” and “Accounting for Takaful: Recognition and Measurement”. The first session was held in cooperation with Komite Nasional Ekonomi dan Keuangan Syariah (KNEKS) Islamic Economy, Indonesia, on Monday, 25 July 2022. And the second session was convened with support from Syrian Insurance Supervisory Commission, Syria on Wednesday, 10 August 2022. The two sessions were attended by over 250 participants.
The exposure draft of the revised FAS “Presentation and Disclosures in the Financial Statements of Takaful Institutions” improves the presentation and disclosure requirements, in line with the global best practices, and will supersede, once issued, the existing FAS 12 “General Presentation and Disclosures in the Financial Statements of Islamic Insurance Companies”.
The exposure draft of the new FAS “Accounting for Takaful: Recognition and Measurement” sets out the principles for the recognition and measurement of Takaful arrangements and ancillary transactions for the Takaful institutions. This standard, once issued, will supersede FAS 13 “Disclosure of Bases for Determining and Allocation Surplus or Deficit in Islamic Insurance Companies” and FAS 15 “Provisions and Reserves in Islamic Insurance Companies” and FAS 19 “Contributions in Islamic Insurance Companies”.
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 as well as 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 standards are expected to be issued by end of 2022.
The exposure drafts can be accessed through these links: