New IAS Plus page on Islamic accounting
Jan 03, 2011
We have created a new IAS Plus page offering background information on Islamic accounting and a history of recent developments in Islamic accounting requirements and practices.
Accounting Standards for financial reporting by Islamic financial institutions have to be developed because in some cases Islamic financial institutions encounter accounting problems because the existing accounting standards such as IFRSs or local GAAP were developed based on conventional institutions, conventional product structures or practices, and may be perceived to be insufficient to account for and report Islamic financial transactions. Sharia'a compliant transactions that observe the prohibition to charge interest may not have parallels in conventional financing and therefore, there may be significant accounting implications. Likewise, the Islamic finance industry is under considerable pressure to enhance practice and improve risk management systems and protect investors.
Click for our Islamic accounting page.