Accounting regulatory issues on investments in Islamic bonds
The main objective of this paper is to examine contemporary accounting regulatory issues on investments in Islamic bonds or sukuk. Investments on Islamic bonds (sukuk) give rise to a number of accounting and reporting issues related to recognition, measurement and disclosure. The underlying rati...
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| Format: | Article |
| Language: | English |
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International Institute of Islamic Business and Finance
2003
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| Online Access: | http://irep.iium.edu.my/24990/ http://irep.iium.edu.my/24990/ http://irep.iium.edu.my/24990/1/Accounting_for_Islamic_Bonds.pdf |
| Summary: | The main objective of this paper is to examine contemporary accounting regulatory issues on
investments in Islamic bonds or sukuk. Investments on Islamic bonds (sukuk) give rise to a
number of accounting and reporting issues related to recognition, measurement and
disclosure.
The underlying rationale of this paper is that proper development of Islamic
financial market requires a well regulated Islamic financial instruments and one of the key
elements of regulation is accounting regulation. Therefore, a well regulated Islamic financial
market requires a sound accounting and reporting standard of Islamic financial instruments
that, first, meet the requirements of syari’ah, and, second, relevant to be practiced in our time.
The need for Islamic accounting that deals with Islamic financial instruments has prompted
AAOIFI recently to introduce Financial Accounting Standard No.17 on investments in
securities (
AAOIFI FAS 17, 2003). The need for a codified Islamic accounting standard are
primarily stemmed from the need that Islamic accounting objectives, concepts and principles
to be developed based on syari’ah requirements. However, the Islamic accounting regulation
also needs to adapt to the modern accounting regulatory environment to make it relevant to be
practiced in our time. The examination of AAOIFI FAS 17 shows that AAOIFI has been
pragmatic in
its approach by considering both requirements when developing its standard.
This is a pro-active step to provide a sound accounting regulation as part of a comprehensive
regulation of Islamic financial institutions. |
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