AAOIFI issues Financial Accounting Standard 30 “Impairment, Credit Losses and Onerous Commitments” officially in Arabic

AAOIFI’s Accounting Board (AAB) Translation Committee has finalised and approved the issuance of the Arabic version of Financial Accounting Standard (FAS) 30 “Impairment, Credit Losses and Onerous Commitments”, The English version of this standard was issued on 22 November 2017.

This standard aims at setting out the accounting rules and principles for impairment and credit losses, covering current and expected losses, in line with global best practices, taking into account the ever-changing requirements and the genuine requirements of the Islamic finance industry across the globe. It also sets out classification of assets and exposures in view of the credit risk and other risks involved. The idea is to apply the forward-looking approach in line with other standard setters for the assets and instruments that are financial instruments from Shari’ah perspective and to define other globally acceptable impairment and write down and provisioning approaches for other assets and exposures, without compromising on Shari’ah. It further covers the situations where onerous commitments exist which mandate a provision for anticipated losses on the same.

This standard became effective for the financial periods beginning on or after 1 January 2020.

To view the Arabic version, please click on the following link: Link

error: Copyrights AAOIFI