The Accounting and Auditing Organization for Islamic Financial Institutions’ (AAOIFI’s) Accounting Board (AAB / the board) has approved the issuance of the Financial Accounting Standard Discussion Paper (FAS DP) “Accounting and Financial Reporting Approach for Tawarruq and Commodity Murabaha”.

The board is cognizant of the different approaches, and challenges, in terms of current market practices for accounting and reporting of Tawarruq and commodity Murabaha. Considering the complexity of the issues and practical challenges, the board has decided to publish this FAS – DP to get first hand input from the industry and stakeholders which will help in addressing the issues effectively in the financial accounting standard to be issued subsequently. Comments are solicited by 31 December 2024 in writing.

Mr. Hamad Al Oqab, Chairman of the AAB, stated: “The board appreciates the significance of industry feedback, in particular on complex subjects such as Tawarruq and commodity Murabaha in developing a standard on financial reporting. To obtain industry feedback AAOIFI will also be holding round table events on the FAS DP”.

• The FAS DP can be accessed on AAOIFI website: ED Link