Accounting of Islamic Banks

Accounting of Islamic BanksAccounting of Islamic Banks

IntroductionIntroduction

(Week 1 & 2)(Week 1 & 2)

Part 1Part 1

Development of Islamic Development of Islamic

Banking SystemBanking System

Definition of a BankDefinition of a BankBanking business means:Banking business means:(a) The business of;(a) The business of;(i)(i) Receiving deposits on current account, Receiving deposits on current account,

deposit account, savings account or other deposit account, savings account or other similar account;similar account;

(ii)(ii) Paying and collecting cheques drawn by Paying and collecting cheques drawn by or paid in by customers; and,or paid in by customers; and,

(iii)(iii) Provision of finance; orProvision of finance; or(b) Such other business as the bank (BNM), (b) Such other business as the bank (BNM),

with the approval of the Minister may with the approval of the Minister may prescribeprescribe

Banking and Financial Institutions Act 1989 Banking and Financial Institutions Act 1989 (BAFIA)(BAFIA)

Definition of an Islamic BankDefinition of an Islamic Bank

““Banking business whose aims and Banking business whose aims and operations do not involve any operations do not involve any element which is not approve by the element which is not approve by the religion of Islam”religion of Islam”

Islamic Banking Act (1983)Islamic Banking Act (1983)

Need for Islamic Banking SystemNeed for Islamic Banking System

Shariah Islamiyyah complianceShariah Islamiyyah compliance Meet financing and investment needs Meet financing and investment needs

of the Muslimsof the Muslims Meet modern requirement of Meet modern requirement of

individual and commercial needs individual and commercial needs Encourages financial innovations but Encourages financial innovations but

in line with Shariahin line with Shariah In Malaysia, growing regulatory and In Malaysia, growing regulatory and

social supportsocial support

Historical Development of Islamic Historical Development of Islamic BankingBanking

The 1The 1stst. Islamic Bank – Mit-Ghamr Nasser . Islamic Bank – Mit-Ghamr Nasser Social Bank, Egypt (1963)Social Bank, Egypt (1963)

Dalla Al-Baraka Group, Saudi (1969)Dalla Al-Baraka Group, Saudi (1969) Islamic Development Bank, Jeddah, Saudi Islamic Development Bank, Jeddah, Saudi

(1975)(1975) Dar al-Maal al-Islami, Saudi (1981)Dar al-Maal al-Islami, Saudi (1981) BIMB (1983)BIMB (1983) Jordan Islamic Bank, Dubai Islamic Bank Jordan Islamic Bank, Dubai Islamic Bank

etc… etc…

Factors Affecting the Development Factors Affecting the Development of Islamic Banking Systemof Islamic Banking System

Legal, political and economic changes Legal, political and economic changes internationallyinternationally

Islamization and Institutional Reform (e.g. Islamization and Institutional Reform (e.g. Pakistan, Iran, Sudan, Malaysia)Pakistan, Iran, Sudan, Malaysia)

International Muslim organizations (OIC – International Muslim organizations (OIC – IDB – etc)IDB – etc)

International response to capture International response to capture capital/fund of oil rich Islamic countries capital/fund of oil rich Islamic countries (e.g. Citibank, Dresdner Kleinworth (e.g. Citibank, Dresdner Kleinworth Benson, ANZ group, etc. Benson, ANZ group, etc.

Malaysian Dual Banking SystemMalaysian Dual Banking System In In 19631963, the Pilgrims and Fund Management , the Pilgrims and Fund Management

Board provides a savings mechanism for Muslims Board provides a savings mechanism for Muslims to perform Hajjto perform Hajj

InIn 1983 1983, the Islamic Banking Act (IBA) was , the Islamic Banking Act (IBA) was approved and defined Islamic Banking as approved and defined Islamic Banking as “banking business whose aims and operations do “banking business whose aims and operations do not involve any element which is not approve by not involve any element which is not approve by the religion of Islam”.the religion of Islam”.

Government Investment Act (Act 275) Government Investment Act (Act 275) 1983 1983 empowers the government to issue Government empowers the government to issue Government Investment Certificates (GIC) with returns in the Investment Certificates (GIC) with returns in the form of discretionary gift (Hibah) rather than form of discretionary gift (Hibah) rather than interestinterest

InIn 1993 1993, Conventional banks can operate Islamic , Conventional banks can operate Islamic baking and financial products known as Skim baking and financial products known as Skim Perbankan Tanpa Faedah (SPTF)Perbankan Tanpa Faedah (SPTF)

PART 2PART 2

Traditional western (secular) Traditional western (secular) accounting objectivesaccounting objectives

Definition and Purpose of Definition and Purpose of Accounting Accounting

In 1966 the American Accounting Association In 1966 the American Accounting Association defined accounting as:defined accounting as:

“…“…the process of identifying, measuring and the process of identifying, measuring and communicating communicating economic informationeconomic information to permit to permit informed judgements and decisions by informed judgements and decisions by usersusers of of that information”that information”

In 1975 they added that the In 1975 they added that the purpose purpose of the process of the process was:was:

“…“…to provide information which is potentially useful to provide information which is potentially useful for making economic decisions and which, if for making economic decisions and which, if provided, will enhance provided, will enhance social welfaresocial welfare””

ACCOUNTING

A PROCESS OF

Measuring,Analyzing,

Interpreting Resultof Operation

Recognising,recording,classifying

and summarisingbusiness

transaction

Reporting &Presenting

Financial Position

Documents

Vouchers

Ledger

Trial Balance

Report (Mgmt)

Profitability= Income - Expenses

Growth

Liquidity

Productivity

Financial Statement

• Balance Sheet• Income Statement• Stmt of Changes In Equity• Cash Flow Statement• Notes to Accounts

STAKEHOLDERS

1. Management2. Board of Directors

3. Shareholders4. Investors5. Creditors

6. Authorities – BNM, InlandRevenue, Baitulmal

7. Staff8. Public

Traditional Model of AccountingTraditional Model of Accounting

Accounting entityAccounting entity (Owners (principals) (Owners (principals) are different from managers (agents)are different from managers (agents)

Economic eventsEconomic events (identifiable and (identifiable and measurable in monetary terms)measurable in monetary terms)

Financial descriptionFinancial description Decision usefulnessDecision usefulness to a very restricted to a very restricted

set of users (esp. those with financial set of users (esp. those with financial involvement with the entity)involvement with the entity)

Neo-Classical Economics and Neo-Classical Economics and maximization of wealthmaximization of wealth of stakeholders of stakeholders

Objectives of Financial Objectives of Financial Accounting and ReportingAccounting and Reporting

Provide Provide information that is usefulinformation that is useful to present to present and potential investors and creditors and other and potential investors and creditors and other users in making rational decisionsusers in making rational decisions

InformationInformation should beshould be comprehensible comprehensible to those to those who have who have reasonable understandingreasonable understanding of of economic activities and are willing to study the economic activities and are willing to study the informationinformation

Primary user Primary user groups are shareholders, investors groups are shareholders, investors and creditorsand creditors

Secondary userSecondary user groups are employees, groups are employees, customers, and the publiccustomers, and the public

Accountability frameworkAccountability framework - the objective is to - the objective is to provide a fair system of information flow between provide a fair system of information flow between the accountor (agent) and the accountee the accountor (agent) and the accountee (principal)(principal)

PART 3PART 3

Accounting from an Islamic Accounting from an Islamic perspectiveperspective

Accounting and IslamAccounting and Islam

Al-Baqarah 282: Al-Baqarah 282: “O you who believe! When “O you who believe! When you deal with each other, in transactions you deal with each other, in transactions involving future obligations in a fixed period involving future obligations in a fixed period of time, reduce them to writing, of time, reduce them to writing, let a scribe let a scribe write down faithfully as between the parties:write down faithfully as between the parties: let not the scribe refuse to write: as God has let not the scribe refuse to write: as God has taught him, so let him write. Let him who taught him, so let him write. Let him who incurs the liability (debtor) dictate, incurs the liability (debtor) dictate, but let but let him fear his Lord God, and not diminish aught him fear his Lord God, and not diminish aught ofof what he oweswhat he owes.. If the party liable (debtor) is If the party liable (debtor) is mentally deficient, or weak, or unable himself mentally deficient, or weak, or unable himself to dictate, let his guardian dictate faithfully, to dictate, let his guardian dictate faithfully, and and get two witnessesget two witnesses,, out of your own men, out of your own men, and if they are not two men, then a man and and if they are not two men, then a man and two women, so that if one of them errs, the two women, so that if one of them errs, the other can remind him….” other can remind him….”

Accounting and IslamAccounting and Islam“…“…The witnesses should not refuse when they The witnesses should not refuse when they

are called on (for evidence). Disdain not to are called on (for evidence). Disdain not to reduce to writing (your contract) for a future reduce to writing (your contract) for a future period, period, whether it be small or big: it is more whether it be small or big: it is more just in the sight of Godjust in the sight of God,, more suitable as more suitable as evidence, and more convenient to prevent evidence, and more convenient to prevent doubts among yourselves. But if you carry doubts among yourselves. But if you carry out the transactions on the spot there is no out the transactions on the spot there is no blame if you reduce it not to writing. But blame if you reduce it not to writing. But take witness whenever you make a take witness whenever you make a commercial contract, and commercial contract, and let neither the let neither the scribe nor witness suffer harmscribe nor witness suffer harm. If you do . If you do (such harm), it would be wickedness in you. (such harm), it would be wickedness in you. So fear God; for it is God that teaches you. So fear God; for it is God that teaches you. And And God is well acquaintedGod is well acquainted with all things” with all things”

Definition of Accounting from an Definition of Accounting from an Islamic PerspectiveIslamic Perspective

““The process of identifying, measuring, andThe process of identifying, measuring, and

communicating communicating economic and othereconomic and other

relevant informationrelevant information inspired by inspired by IslamicIslamic

WorldviewWorldview and complied with and complied with Syari’ahSyari’ah

IslamiyyahIslamiyyah to permit informed to permit informed

judgements and decisions by judgements and decisions by potentialpotential

and expected usersand expected users information to information to

enhance enhance social welfaresocial welfare” ”

Islamic AccountabilityIslamic Accountability

Transcendental accountability to Allah Transcendental accountability to Allah SWT (SWT (HablumminallahHablumminallah))

Social accountability to the society Social accountability to the society ((Hablumminan-nassHablumminan-nass))

Individuals as trustees or Individuals as trustees or khalifahkhalifah Success in this world and in the hereafter Success in this world and in the hereafter

((al-falahal-falah)) Economic goals beyond purely wealth but Economic goals beyond purely wealth but

include include tazkiyah tazkiyah (purification of self and (purification of self and wealth) wealth)

Objectives of Financial StatementsObjectives of Financial StatementsTraditionalTraditional IslamicIslamic

Income Income StatementStatement

Economic Economic PerformancePerformance

Fulfilment of Fulfilment of AmanahAmanah

Balance Balance SheetSheet

Financial Financial PositionPosition

Financial Financial Trust and Trust and Obligation Obligation

Cash FlowCash Flow Cash PositionCash Position Cash Cash EntrustedEntrusted

Equity Equity StatementStatement

Wealth Wealth OwnershipOwnership

WealthWealth

EntrustedEntrusted

Features of Islamic AccountingFeatures of Islamic Accounting No different in terms of recording (double entry No different in terms of recording (double entry

system)system) Clear distinction of Accounting Objectives i.e. Clear distinction of Accounting Objectives i.e.

religious obligation vs. commercial obligation religious obligation vs. commercial obligation (different significance of financial statements)(different significance of financial statements)

Different users information need (legitimate and Different users information need (legitimate and equitable transactions and wealth vs. maximization equitable transactions and wealth vs. maximization of wealth and economic consequences)of wealth and economic consequences)

Compliance with the principles and rules of Syari’ahCompliance with the principles and rules of Syari’ah Different Islamic contractual relationships Different Islamic contractual relationships

(mudarabah instrument; murabahah etc.) (mudarabah instrument; murabahah etc.) Distinct accountability relationships (to Allah SWT Distinct accountability relationships (to Allah SWT

and Ummah)and Ummah) Determination of zakatDetermination of zakat

User Groups of Accounting User Groups of Accounting Information for Islamic BanksInformation for Islamic Banks

Investors (potential and existing) (lawful Investors (potential and existing) (lawful and equitable investment)and equitable investment)

Creditors (potential and existing) (lawful Creditors (potential and existing) (lawful trade assets)trade assets)

Regulators (e.g. Bank Negara)Regulators (e.g. Bank Negara) Syari’ah Supervisory Board & Advisory Syari’ah Supervisory Board & Advisory

Council (syari’ah compliance)Council (syari’ah compliance) Customers (lawful goods and services)Customers (lawful goods and services) Others who may be effected by the Others who may be effected by the

disclosure or non-disclosure of information disclosure or non-disclosure of information

PART 4PART 4

Introduction to AAOIFI Introduction to AAOIFI

Accounting Standards and Accounting Standards and Objectives of Financial Objectives of Financial

Accounting and ReportingAccounting and Reporting

Accounting and Auditing Accounting and Auditing Organizations of Islamic Financial Organizations of Islamic Financial

Institutions (AAOIFI)Institutions (AAOIFI)Primary PurposePrimary Purpose To enhance the confidence of users of the To enhance the confidence of users of the

financial statements of the IFIs and ultimately financial statements of the IFIs and ultimately to promote IFIsto promote IFIs

ObjectivesObjectives Develop accounting and auditing thought Develop accounting and auditing thought

relevant to IFIsrelevant to IFIs Disseminate accounting and auditing thought Disseminate accounting and auditing thought

relevant to IFIsrelevant to IFIs Prepare, promulgate and interpret accounting Prepare, promulgate and interpret accounting

and auditing standards for IFIsand auditing standards for IFIs Review and amend accounting and auditing Review and amend accounting and auditing

standards for IFIsstandards for IFIs

Accounting and Auditing Organizations of Islamic Accounting and Auditing Organizations of Islamic Financial Institutions (AAOIFI) Financial Institutions (AAOIFI)

http://www.aaoifi.com/http://www.aaoifi.com/

History:History: established in 1991 – agreement established in 1991 – agreement of association by IFIs worldwide supported of association by IFIs worldwide supported by IDBby IDB

Head office is in BahrainHead office is in Bahrain Organizational StructureOrganizational Structure – Supervisory – Supervisory

Committee; Financial Accounting Standard Committee; Financial Accounting Standard Board; Executive Committee; Shari’ah Board; Executive Committee; Shari’ah CommitteeCommittee

FundedFunded by founding members of IFIs, by founding members of IFIs, establishment of waqf etc.establishment of waqf etc.

AAOIFI: Accounting, Auditing and AAOIFI: Accounting, Auditing and Governance StandardsGovernance Standards

Statements of Statements of Financial AccountingFinancial Accounting

ObjectivesObjectives ConceptsConcepts

Financial Accounting Financial Accounting StandardsStandards

Presentation and Presentation and Disclosure of Financial Disclosure of Financial Statements of Islamic Statements of Islamic BanksBanks

Murabaha FinancingMurabaha Financing Mudaraba FinancingMudaraba Financing

Financial Accounting Financial Accounting StandardsStandards

Musharaka FinancingMusharaka Financing Profit Allocation BasisProfit Allocation Basis Investment Account HoldersInvestment Account Holders Salam FinancingSalam Financing Ijarah FinancingIjarah Financing ZakahZakah Istisna’ FinancingIstisna’ Financing Provisions and ReservesProvisions and Reserves Presentation and Disclosure Presentation and Disclosure

of Financial Statements of of Financial Statements of Islamic Insurance Islamic Insurance CompaniesCompanies

AAOIFI: Accounting, Auditing and AAOIFI: Accounting, Auditing and Governance StandardsGovernance Standards

Auditing StandardsAuditing Standards Objectives and Objectives and

Principles of AuditingPrinciples of Auditing The Auditor’s ReportThe Auditor’s Report Terms of Audit Terms of Audit

EngagementEngagementGovernance StandardsGovernance Standards Syariah Supervisory Syariah Supervisory

BoardBoard Syariah ReviewSyariah Review Internal Syariah Internal Syariah

ReviewReview

Code of EthicsCode of Ethics Code of Ethics for Code of Ethics for

Accountants and Auditors Accountants and Auditors of IFIof IFI

New Financial New Financial Accounting StandardsAccounting Standards

Investment FundInvestment Fund Disclosure Bases for Disclosure Bases for

Determining and Determining and Allocating Insurance Allocating Insurance Surplus (and deficit)Surplus (and deficit)

New Auditing StandardsNew Auditing Standards Audit Tests for Syariah Audit Tests for Syariah

ComplianceCompliance

Objectives of Islamic Financial Objectives of Islamic Financial Accounting and Reporting (AAOIFI)Accounting and Reporting (AAOIFI)

To determine rights and obligations of To determine rights and obligations of interested partiesinterested parties

To safeguard entity assets and rights of othersTo safeguard entity assets and rights of others To contribute to enhancement of managerial To contribute to enhancement of managerial

productive capacitiesproductive capacities To provide useful information to make To provide useful information to make

legitimate decisions legitimate decisions Syari’ah complianceSyari’ah compliance Distinguish prohibited earnings and Distinguish prohibited earnings and

expenditureexpenditure

Objectives of Islamic Financial Objectives of Islamic Financial Accounting and Reporting (AAOIFI) Accounting and Reporting (AAOIFI)

Present entity’s economic resources, Present entity’s economic resources, obligations and related risksobligations and related risks

Determine Zakat obligations Determine Zakat obligations Estimate cash flow and related riskEstimate cash flow and related risk Ensuring reasonable (or equitable) rates of Ensuring reasonable (or equitable) rates of

returns to investorsreturns to investors Disclose Islamic Bank’s discharge of social Disclose Islamic Bank’s discharge of social

responsibility (not as a constraint but as a responsibility (not as a constraint but as a goal)goal)

PART 5PART 5

Accounting concepts from an Accounting concepts from an Islamic perspectiveIslamic perspective

Impact of Syari’ah Contractual Impact of Syari’ah Contractual Conditions Accounting conceptsConditions Accounting concepts

Existence (Recognition of revenue and Existence (Recognition of revenue and expense)expense)Lawful (Recognition of revenue and Lawful (Recognition of revenue and expense)expense)Measurable (Measurement of assets and Measurable (Measurement of assets and liabilities)liabilities)Deliverable (Recognition & Measurement)Deliverable (Recognition & Measurement)Equitable (Profit determination and Equitable (Profit determination and distribution)distribution)Accountability (Disclosure & Presentation)Accountability (Disclosure & Presentation)

Accounting Concepts: An Islamic Accounting Concepts: An Islamic PerspectivePerspective

Accounting unit Accounting unit Separate legal entity; limited liability; owners Separate legal entity; limited liability; owners

are different from managersare different from managers Similar to the concept of “juridical person” in Similar to the concept of “juridical person” in

the case Waqf & Baitulmalthe case Waqf & Baitulmal Almost similar to Mudarabah as far as the Almost similar to Mudarabah as far as the

purpose and principlespurpose and principles Liabilities limited to the capital contribution & Liabilities limited to the capital contribution &

may be injurious to the creditors in the case of may be injurious to the creditors in the case of liquidationliquidation

To be constrained by the syari’ah as to the To be constrained by the syari’ah as to the rights and obligationsrights and obligations


PeriodicityPeriodicity periodic reports of financial positions as of a periodic reports of financial positions as of a

given date and divided into reporting periods given date and divided into reporting periods (normally annual)(normally annual)

Accounting for zakat based on “haul” (one Accounting for zakat based on “haul” (one year complete ownership)year complete ownership)

Going concern Going concern contracts assumed to continue until there is contracts assumed to continue until there is

evidence to the contraryevidence to the contrary Para 21 MASBi-1Para 21 MASBi-1 when material when material

uncertainties, those uncertainties should be uncertainties, those uncertainties should be discloseddisclosed


Monetary and stability of unit Monetary and stability of unit measurementmeasurement

currency as common denominator currency as common denominator Impact of inflation & purchasing power on Impact of inflation & purchasing power on

reporting?reporting?

Prudence & ConservatismPrudence & Conservatism Generally, not to overstate assets and Generally, not to overstate assets and

incomes, and not to understate liabilities incomes, and not to understate liabilities and expensesand expenses

As long as can be determined with As long as can be determined with certaintycertainty (objectivity)(objectivity)

Accounting Recognition and Accounting Recognition and Measurement ConceptsMeasurement Concepts

RecognitionRecognition Define the basic principles that determine Define the basic principles that determine

the the timingtiming of revenue, expense, gain and of revenue, expense, gain and lossloss

MeasurementMeasurement Define the broad Define the broad principles that principles that

determine the amountdetermine the amount at which assets, at which assets, liabilities, owners equity etc. are liabilities, owners equity etc. are recognized recognized

Islamic Perspective of Accounting Islamic Perspective of Accounting RecognitionRecognition

Revenue RecognitionRevenue Recognition Recognized when realizedRecognized when realized The right to receive not necessarily when the The right to receive not necessarily when the

payment is received (i.e. payment is received (i.e. accrual basisaccrual basis – – MASBi-1 para 22MASBi-1 para 22; AAOIFI) e.g. when a bank ; AAOIFI) e.g. when a bank delivers the servicedelivers the service

SyariahSyariah Requirement: the amount of revenue Requirement: the amount of revenue should be should be knownknown and and collectiblecollectible

Expense RecognitionExpense Recognition Realization either because the expense Realization either because the expense relates relates

to the earningto the earning of revenue (e.g. transportation of revenue (e.g. transportation cost for services), or because it cost for services), or because it relates to the relates to the periodperiod of income statement (e.g. bonus) of income statement (e.g. bonus)

Islamic Perspective of Accounting Islamic Perspective of Accounting MeasurementMeasurement

Matching ConceptMatching Concept Matching of revenues and gains with Matching of revenues and gains with

expenses and losses that relate to that expenses and losses that relate to that periodperiod

Measurement Attributes: acquisition cost Measurement Attributes: acquisition cost (HC), cash equivalent value, asset’s (HC), cash equivalent value, asset’s replacement cost etc.replacement cost etc.

In the case of Zakat measurement, In the case of Zakat measurement, preference is current market value (AAOIFI preference is current market value (AAOIFI FAS 9: FAS 9: Cash Equivalent ValueCash Equivalent Value))

Islamic Perspective of Accounting Islamic Perspective of Accounting MeasurementMeasurement

Historical Value vs. Current ValueHistorical Value vs. Current Value Cash Equivalent Value Cash Equivalent Value (most preferred (most preferred

if the following are available):if the following are available): availability of objective indicator;availability of objective indicator; relevant information;relevant information; logical and relevant valuationlogical and relevant valuation consistency of valuation methodsconsistency of valuation methods experts valuationexperts valuation conservatism in the valuation processconservatism in the valuation process

Definition of AssetsDefinition of Assets

““Capable of generating positive cash flows Capable of generating positive cash flows or other economic benefits in the future or other economic benefits in the future either by itself or in combination with other either by itself or in combination with other assets which the bank has acquired the right assets which the bank has acquired the right to hold (to hold (rightful ownership of maalrightful ownership of maal), use ), use of dispose (of dispose (rights on manfaatrights on manfaat) as a result ) as a result of past transactions or events” (AAOIFI)of past transactions or events” (AAOIFI)

Desirable Characteristics of Desirable Characteristics of Accounting InformationAccounting Information

1. Relevance1. Relevance Predictive ValuePredictive Value (ability to predict (ability to predict

potential outcome)potential outcome) Feedback ValueFeedback Value (ability to verify the (ability to verify the

accuracy of prior prediction)accuracy of prior prediction) Timeliness Timeliness (available as soon as after the (available as soon as after the

reported events)reported events)


2. Reliability2. Reliability Representational faithfulnessRepresentational faithfulness

(information reflect what it purports to (information reflect what it purports to present)present)

ObjectivityObjectivity (measurement and disclosure (measurement and disclosure appropriately used and if replicated by appropriately used and if replicated by independent person gives the same result)independent person gives the same result)

NeutralityNeutrality (accounting information (accounting information directed towards common needs of users directed towards common needs of users and not needs of particular group of users)and not needs of particular group of users)


3. Comparability3. Comparability Able to make comparison of the bank’s Able to make comparison of the bank’s

performance and position over time and performance and position over time and with other bankswith other banks

4. Consistency4. Consistency Consistent in applying accounting Consistent in applying accounting

measurement, valuation and disclosure measurement, valuation and disclosure methods from one period to anothermethods from one period to another


5. Understandability5. Understandability Aware of the abilities and limitations of Aware of the abilities and limitations of

those for whom accounting information is those for whom accounting information is provided provided

6. Materiality6. Materiality Accounting information is regarded Accounting information is regarded

material if its omission, non-disclosure or material if its omission, non-disclosure or misstatement results in distortion of the misstatement results in distortion of the financial statementsfinancial statements

ConclusionsConclusions

Islamic accounting framework Islamic accounting framework

(objectives and concepts):(objectives and concepts):

1.1. Compliance with syari’ah and, Compliance with syari’ah and, achievement of Islamic goals, on financial achievement of Islamic goals, on financial activities (financing schemes and financial activities (financing schemes and financial instruments) instruments)

2.2. Equitable and fair recognition, Equitable and fair recognition, measurement, valuation and disclosure of measurement, valuation and disclosure of financial informationfinancial information

3.3. Achievement of both economic and Achievement of both economic and spiritual well being of the society spiritual well being of the society

Accounting of Islamic Banks

Documents

Transcript of Accounting of Islamic Banks