AAOIFI issues Financial Accounting Standard 32 “Ijarah” officially in Arabic

AAOIFI’s Accounting Board (AAB) Translation Committee has finalised and approved for issuance the Arabic version of Financial Accounting Standard (FAS) 32 “Ijarah”. The English version of this standard was issued in December 2019.

This standard improves upon and supersedes AAOIFI’s Financial Accounting Standard (FAS) 8 “Ijarah and Ijarah Muntahia Bittamleek” originally issued in 1997. This standard aims at setting out principles for the classification, recognition, measurement, presentation and disclosure of Ijarah type transactions including their different forms entered into by an institution, in both the capacities of lessor and lessee.

Ijarah and Ijarah Muntahia Bittamleek (Ijarah MBT) in their different forms are amongst the most common Islamic finance transactions. These are used commonly by Islamic financial institutions (the institutions) for providing assets to customers in need of financial resources for acquiring such assets in different sectors. A significant proportion of underlying assets in Sukuk structures are also based on such transactions.

This standard became effective for the financial periods beginning on or after 1 January 2021.

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

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