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AAOIFI proposes standard on impairment and credit losses

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28 Aug 2017

The Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) is an Islamic international autonomous non-for-profit corporate body that prepares accounting, auditing, governance, ethics and Sharia'a standards for Islamic financial institutions and the industry. The newest exposure draft published by the AAOIFI deals with impairment and credit losses covering current and expected losses.

Although the AAOIFI is part of the IASB's consultative group on Sharia'a-compliant instruments and transactions, the new proposed standard FAS 30 Impairment and credit losses is not converged with the corresponding requirements in IFRS 9 Financial Instruments. Rather, discussions at an expert workshop co-hosted by the AAOIFI and the IASB in 2015 to discuss the matters that Islamic financial institutions may have to deal with when applying the IFRS 9 formed the basis for developing the proposals in the exposure draft now published.

Please click to access the exposure draft on the AAOIFI website. Comments are requested by 30 September 2017.

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