MASB issues bulletins on Islamic accounting and MFRS 17 'Insurance Contracts'
20 Aug 2021
Over the last few months, the Malaysian Accounting Standards Board (MASB) has pulished three issues bulletins that discuss the application of MFRS 17 'Insurance Contracts' (equivalent to IFRS 17 'Insurance Contracts') to takaful, an Islamic or sharia compliant alternative to conventional insurance.
Issues Bulletin 1 MFRS 17 Insurance Contracts: Definition and Scope for Takaful concludes that takaful would fall within the scope of MFRS 17 Insurance Contracts.
Issues Bulletin 2 Columnar Presentation of Takaful Funds in Takaful Entity Financial Statements reaffirms that columnar presentation can be made in the primary financial statements of a takaful entity when applying MFRS 17 Insurance Contracts.
Issues Bulletin 3 Reporting Qard in the Takaful Fund Column within Takaful Entity Financial Statements concludes that from the takaful fund perspective, qard forms part of fulfillment cash flows under MFRS 17 Insurance Contracts.
The MASB also considered the accounting implications of qard in the event that a takaful entity chooses to prepare separate takaful operator column in its financial statements. The discussion and guidance on qard from the perspective of the takaful operator is available in an Annex
to Issues Bulletin 3.
Note: All links above are to the MASB website.
