17 March 2025

PR/04/2025

AAOIFI’s Accounting Board (AAB) Translation Committee has finalised and approved for issuance the Arabic version of Financial Accounting Standard (FAS) 42 “Presentation and Disclosures in the Financial Statements of Takaful Institutions”. The English version of this standard was issued in December 2022.

This standard improves upon and supersedes AAOIFI’s Financial Accounting Standard (FAS) 12 “General Presentation and Disclosures in the Financial Statements of Islamic Insurance Companies”. This standard aims at setting out the overall requirements for the presentation of financial statements, the minimum requirement for the contents of and disclosures in the financial statements and a recommended structure of financial statements that facilitates fair presentation in line with Shari’ah principles and rules for Takaful institutions.

Furthermore, this standard aims to ensure that the Takaful institutions faithfully present the information related to these arrangements to the relevant stakeholders as per the contractual relationship between the parties and the business model of the Takaful business in line with the Shari’ah principles and rules. It also prescribes the set of financial statements that the institutions should periodically publish to satisfy the common information needs of users of financial statements and stipulates the information that should be disclosed in the financial statements of Takaful institutions to achieve the objectives of accounting and financial reporting.

This standard is effective for the financial periods beginning on or after 01 January 2025.

The Arabic version of the standard can be accessed on AAOIFI website: Click here