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Accounting Standards for Islamic Financial Institutions (AAOIFI)

Course Description
In the Middle East financial institutions are allowed to prepare accounts using AAOIFI standards. These standards consider the impact of Sharia’a compliance on a firm and develop appropriate reporting. This course considers these standards and their impact on the disclosure adopted by financial institutions.


Learning Objectives
This introductory level course is designed to provide the participants with an understanding of AAOIFI standards and the key accounting issues that they are trying to address. Through a review of the twenty-three (23) AAOIFI Standards (2007-2008) delegates will gain an understanding of how this provides a picture of the financial health and Sharia’a compliance of the institution.

Some key differences to international accounting standards will also be highlighted to enable counterparty credit risk comparisons to be undertaken.

Who Should Attend

  • Chief Financial Officers
  • Finance management and staff
  • Risk management staff
  • Internal auditors
  • Sharia’a committee members

Classroom style, seminar - workshop format, using up-to-date and relevant examples of published (in English) sets of accounts from major Islamic banks in the GCC region and UK.

Knowledge Pre-Requisites
An appreciation of accounting principles and an understanding of accounting practises and reporting will be advantageous.

Course Content
Session 1: Overview

  • Objectives of Financial Accounting for Islamic Banks &Financial Institutions
  • Concepts of Financial Accounting for Islamic Banks & Financial Institutions
  • Presentation and Disclosure in the Financial Statements of Islamic Banks & Financial Institutions
  • Cost-plus Trade Financing
    • Murabaha
  • Trust Financing
    • Mudaraba

Session 2: Equities & Investment

  • Disclosure of Bases for Profit Allocation between Owners’ Equity and Investment Account Holders
  • Equity of Investment Account Holders and Their Equivalent
  • Contracts & Conditions
  • Salam and Parallel Salam
  • Financial Leasing
  • Ijarah and Ijarah Muntahia Bittamleek
  • Welfare Contributions
  • Zakah
  • Contracts of Exchange
  • Istisna’a and Parallel Istisna’a
  • Provisions and Reserves

Session 3: Insurance

  • Presentation and Disclosure in the Financial Statements of Islamic Insurance Companies
  • Disclosure of Bases for Determining and Allocating Surplus or Deficit in Islamic Insurance Companies
  • Investment Funds
  • Provisions and Reserves in Islamic Insurance Companies
  • Contributions in Islamic Insurance Companies

Session 4: Foreign Exchange and Currency

  • Foreign Currency Transactions and Foreign Operations

Session 5: Various

  • Investments
  • Islamic Financial Services Offered by Conventional Financial Institutions
  • Deferred Payment Sale
  • Disclosure on Transfer of Assets
  • Segment Reporting
  • Consolidation (new)

State of the art facilities
Delegates can study in our comfortable hi-tech learning environment in London, near Liverpool Street Station.

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Accounting Standards for Islamic Financial Institutions

Course Venue: London EC2