AAOIFI Publishes Exposure Draft of the Financial Accounting Standard Murabaha and Other Deffered Payment Sales and Invites Opinion from Islamic Finance Industry

In line with its continuous improvement and update program, the Accounting Board (AAB) of the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) has published the exposure draft of AAOIFI’s accounting  standard on Murabaha and Other Deffered Payment Sales, and in this respect invites opinion and feedback from the Islamic finance industry.

The exposure draft provides detailed and comprehansive guidance on the initial recognition, subsequent measurement, de-recognition, revenue and profit recongition, presentation and disclosures and other related accounting treatments. It also proposes to introduce the accounting for the liability side for Murabaha and deferred payement sales transactions. However, the standard will not include the accounting for Tawarruq and commodity Murabaha, on which the secretariat and the relevant working group is working. It is worth  to note that the standard, once finalized, will supersede the earlier FAS 2 “Murabaha and Murabaha to the Purchase Orderer” and FAS 20 “Deferred Payment Sales”.

With this regard, AAOIFI plans to hold public hearings on the draft standard in different parts of the world. Comments on the exposure draft are welcome and should be directed no later than  Friday 31 March 2017 to this email: [email protected] All the comments and suggestions of the public hearings will be presented to AAB in an upcoming meeting to discuss and make necessary changes to the standard.

The exposure draft can be accessed on the AAOIFI website on the following address:


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