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    Fas 1 Vs Ias 1 (Aaoifi Vs Ifrs)

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    Mifp Inceif
    AAOIFI has issued Financial Accounting Standard No. 1 which specifies the financial statements that Islamic banks must publish, including conventional statements like the balance sheet, income statement, and cash flow statement, plus three additional statements for restricted investments, zakat funds, and qard funds. The standard also requires Islamic banks to disclose the role of their Sharia adviser/board and their responsibility for zakat. It outlines numerous disclosure requirements for significant accounting policies, such as how assets are revalued, how prohibited earnings are disposed of, and how investment profits/losses are allocated.

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    Fas 1 Vs Ias 1 (Aaoifi Vs Ifrs)

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    Mifp Inceif
    421 views2 pages
    AAOIFI has issued Financial Accounting Standard No. 1 which specifies the financial statements that Islamic banks must publish, including conventional statements like the balance sheet, income statement, and cash flow statement, plus three additional statements for restricted investments, zakat funds, and qard funds. The standard also requires Islamic banks to disclose the role of their Sharia adviser/board and their responsibility for zakat. It outlines numerous disclosure requirements for significant accounting policies, such as how assets are revalued, how prohibited earnings are disposed of, and how investment profits/losses are allocated.

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    Fas 1 vs Ias 1 (AAOIFI vs IFRS)

    Original Title

    Fas 1 vs Ias 1 (Aaoifi vs Ifrs)

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    AAOIFI has issued Financial Accounting Standard No. 1 which specifies the financial statements that Islamic banks must publish, including conventional statements like the balance sheet, income statement, and cash flow statement, plus three additional statements for restricted investments, zakat funds, and qard funds. The standard also requires Islamic banks to disclose the role of their Sharia adviser/board and their responsibility for zakat. It outlines numerous disclosure requirements for significant accounting policies, such as how assets are revalued, how prohibited earnings are disposed of, and how investment profits/losses are allocated.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    421 views2 pages

    Fas 1 Vs Ias 1 (Aaoifi Vs Ifrs)

    Uploaded by

    Mifp Inceif
    AAOIFI has issued Financial Accounting Standard No. 1 which specifies the financial statements that Islamic banks must publish, including conventional statements like the balance sheet, income statement, and cash flow statement, plus three additional statements for restricted investments, zakat funds, and qard funds. The standard also requires Islamic banks to disclose the role of their Sharia adviser/board and their responsibility for zakat. It outlines numerous disclosure requirements for significant accounting policies, such as how assets are revalued, how prohibited earnings are disposed of, and how investment profits/losses are allocated.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    AAOIFI Accounting Standards

    FAS 1 vs IAS 1
    (AAOIFI vs IFRS)

    Md Nahid Imam
    Certified Islamic Banker

    ISLAMIC FINANCE IN EUROPE

    AAOIFI Accounting standards

    Page 1

    AAOIFI Accounting Standards


    AAOIFI has issued the Financial Accounting Standard No. 1 on General Presentation and
    Disclosure in the Financial Statements of Islamic Banks and Financial Institutions in January
    1996. The standard is applicable to the financial statements published especially by Islamic
    banks to meet the common information needs of the main users of such statements. The
    standard makes it clear that if the requirements of the standard contradict the banks charter
    or the laws and regulations of the country in which it operates a disclosure should be made on
    the contradiction and the impact of promulgated standards on the relevant elements of the
    financial statements.
    AAOIFI FAS 1 specified that the complete set of financial statements consist of conventional
    statements of IAS 1 such as a statement of financial position (balance sheet); income
    statement, cash flows statement; statement of changes in owners equity, or a statement
    of retained earnings; and notes to the financial statements.
    However, the standard added three (3) additional statements that could be useful for users of
    Islamic banks and financial institutions, namely:
    (i)
    (ii)
    (iii)

    Statement of changes in restricted investment;


    Statement of sources and uses of funds in the Zakat and charity fund (if the bank
    assumes the responsibility for the collection and distribution of Zakat); and
    Statement of sources and uses of funds in the Qard fund.

    The standard also makes it clear that Islamic banks and financial institutions, in addition to
    other conventional disclosures (Para 3/2), should disclose two (2) very important aspects of
    their unique functions i.e.
    (i)

    (ii)

    the role of the Shariah adviser or the Shariah board in supervising the banks
    activities and the nature of advisers or boards authority in accordance with the
    banks bye-laws and in actual practice; and,
    the banks responsibility towards Zakat.

    For the disclosure of significant accounting policies, AAOIFI FAS 1 made a number of
    disclosure requirements such as
    (i)
    disclosure of accounting policies;
    (ii)
    disclosure of bases and methods adopted by the banks management for
    revaluation of assets, liabilities and restricted investments to their cash equivalent
    value;
    (iii) disclosure of earnings or expenditures prohibited by the shariah and how the
    bank intends to dispose of the assets generated by the prohibited earnings or
    acquired through prohibited expenditures;
    (iv)
    disclosure related to unrestricted and restricted investment accounts;
    (v)
    disclosure on the distribution of unrestricted investment accounts, by type, in
    accordance with maturity (Para 3/9); (vi) disclosure of the method used by the
    Islamic bank in allocating investment profits (or losses) between unrestricted
    investment account holders or their equivalent (Para 3/18);
    (vi)
    disclosure on returns to each type of investment accounts and their rate of return.

    AAOIFI Accounting standards

    Page 2

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