Your email address will not be published. Save my name, email, and website in this browser for the next time I comment. Recent Posts. Very soon later, these standards will also be available in a variety of digital formats including an e-book format, and via popular online bookstore portals along with several technical features such as search function which will be sequentially phased in over the course of the near future.

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We provide tools that help professionals and institutions steer the global Islamic economy, unlocking commercial opportunities. A dedicated market intelligence platform providing breakthrough access to financial intelligence and the latest investment opportunities. A collaborative tool to seamlessly connect the largest, most established Islamicindustry professionals community in the world. The Bahrain-based organisation started producing standards as early as AAOIFI standards have been developed in consultation with leading Sharia scholars, with several counties adopting them.

Although AAOIFI standards are not binding on members, over the last few years the organisation has made significant progress in encouraging the widespread adoption of the standards.

In addition, over this period, International Accounting Standards IAS or respective national accounting standards were followed by Islamic banks. Hence, the unique requirements of Islamic financial institutions were not being met. To give two examples:. In an industry that is often quite fragmented, it is hoped that the development of AAOIFI standards will go a long way in promoting convergence in Sharia standards and leading to further growth in this nascent market.

Code of ethics for accountants and auditors of IFIs. As such, what is so special about this standard? Allow me to share some of the insights that I am able to discover while working on this Shariah standard from day one.

First things first. It is essentially meant to be a stand-alone standard in the sense that you can find as many relevant principles of Shariah on gold as possible in one standard. It seems that the initial drafters and the AAOIFI sub-committee of the standard have the motivation to compile almost all relevant rulings dealing with gold under this standard.

In other Shariah Standards, many of the Shariah issues, if already covered by other Shariah Standards, will be straight-away referred to that Shariah Standard so that the reader may need to flip through relevant Shariah Standards to get what they need to know. Investment Modalities. Multiple Use of Modalities. Basic Characteristics of Islamic Investment Modalities. Islamic Financial Instruments. Belief in Divine Guidance. A Brief Introduction to Islam.

Sources of Islamic Finance. Islamic Contract Law. Asset-backed Financing. Capital, Entrepreneur and Islam. Capitalist vs. Islamic Economy. Islamic banks — Current Practices. Riba Interest.

Five Main Contracts in Islamic Finance. Option Contract In Islamic Finance. Sukuk al-Ijara. Sukuk al-Wakala. Sukuk al-Salam. Sukuk al-Musharaka. Sukuk Al-Mudaraba. Sukuk al-Murabaha. Sukuk al-Istisna. Sukuk al-Istithmar. Other Sukuk Instruments. Mudarabah — Introduction. Musharakah - Introduction. Combination of Musharakah and Mudarabah. Management of Musharakah. Diminishing Musharakah. Mudarabah — Distribution of Profit. Musharakah - Distribution of Profit.

Shirkat-ul-Milk and Shirkat-ul-Aqd. Nature of Capital. Ratio of Profit. Sharing of Loss. Termination of Mudarabah. Termination of Musharakah. Mudarabah as a Mode of Finance. Musharakah as substitute for regular overdraft. Murabahah - Introduction. Basic Rules of Sale. Cost Calculation in Murabahah. Pricing for Cash and Credit Sales. Default Penalty - An Alternative. Features of Murabahah Financing. Murabahah - Guarantee. Murabahah as a Mode of Financing.

Promise to Purchase. Rebate on Earlier Payment. Rescheduling of Payments. Roll Over in Murabahah. Securities against Murabahah Price. Securitization of Murabahah. Subject Matter of Murabahah. Use of Interest Rate as Benchmark. Constructing a Murabaha deal.

Murabaha in prearranged deals. Ijarah - Introduction. Rules of Leasing - Ijarah. Ijarah — The Parties. Ijarah as a Mode of Financing. The Commencement of Lease. Insurance of the Assets. Leased Asset - Residual Value. Securitization of Ijarah. Variable Rentals. Assignment of the Lease. Expenses in Ijarah.

Liability in Case of Loss. Penalty - late payment of rent. Termination of Ijarah. Ijarah Leasing as a Mode of Finance. Concept of Ownership. Public Property.

Concept of Wealth. Transfer of Wealth. Iktisab Al-Rizq. Definition of Haram. Permission of Cash Rent Only. Grant of Grazing. Labour as Partner.


Shari'a Standards

Accounting and Auditing Organization for Islamic Financial Institutions AAOIFI [7] is a Bahrain based not-for-profit organization that was established to maintain and promote Shariah standards for Islamic financial institutions, participants and the overall industry [8]. The commission also organizes a number of professional development programs especially the Islamic legal accountant program and the observer program and forensic auditor in their effort to upgrade the human resources working in the industry and the development of governance structures controls the institutions. Then, it was registered on 27 March in Bahrain. It has members from more than 45 countries [10] , including central banks and Islamic financial institutions and other parties working in the financial industry and banking, Islamic International. The commission has obtained support for the application of the standards issued by it, where these standards are dependent today in the Kingdom of Bahrain and the Dubai International Financial Centre, Jordan, Lebanon, Qatar, Sudan and Syria. The competent authorities in Australia, Indonesia, Malaysia, Pakistan, Saudi Arabia and South Africa issued guidelines derived from the standards and publications. This activity is intended both to enhance the confidence of users of the financial statements of Islamic financial institutions in the information that is produced about these institutions, and to encourage these users to invest or deposit their funds in Islamic financial institutions and to use their services.


Accounting and Auditing Organization for Islamic Financial Institutions

The proposed AAOIFI accounting standard on risk reserves intends to define the accounting principles for risk reserves maintained for the benefit of participatory stakeholders such as investment account holders and Sukuk-holders. It is intended to encourage a financial reporting environment that is risk averse and transparent but that also ensures better safeguarding of the interest of such stakeholders and providing better stability to the Islamic finance industry. These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line. The full functionality of our site is not supported on your browser version, or you may have 'compatibility mode' selected. Please turn off compatibility mode, upgrade your browser to at least Internet Explorer 9, or try using another browser such as Google Chrome or Mozilla Firefox.

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