Unformatted text preview: Seminar In Islamic Accounting
Prepare for Dr Zuraeda Ibrahim Prepare by Mohd Nazimin Ismail
2014695604 Question 1 (a)
Accounting Standards are the accounting
practices issued by recognized expert
Harmonization of accounting standards has
become a highly demanded issue of
discussion and debate among accounting
professionals around the globe. Question 1 (a)
Minimize the differences in
processes Difficulties in making
performance of companies. • Multinational companies operating
• Regulators and auditors will get
the same information • This occurrence hinders the
valuation and consequently the
decision making process.
• Harmonization helps better
assessment of performance and
decision making. Consistency to be achieved
under IFRS Improves the quality of
throughout the globe • Contributes to better
understanding between investors,
lenders and other businesses as
there will be the nature of
predictability in place • Increased auditing efficiency and
money saving as companies has to
use only one set of reporting
standards Question 1 (b)
Most of the countries in the world are gradually moving towards adoption of to International Financial Reporting
The adoption of IFRS on Accounting for IFIs may have few
impacts in terms of the accounting treatment.
Receipt of interest - Riba-interest is forbidden in Quran.
Interest in the conventional sense includes an intrinsic
assumption of the time value of money.
Substance over form - IAS 17 treated finance lease as
asset and shown as a non-current asset and a
corresponding liability in the in the leaseholder’s financial
statements. . Islamic leasing contracts due to sharia
requirements cannot be accounted as a financing lease Question 1 (b)
measurement methods used by a number of
IFIs are mainly based on straight line method,
which is not permissible under IAS 17 as it
recommends use of actuarial method which
uses interest tables to allocate the interest
charges to particular periods. Question 1 (c)
The fast growth and development of Islamic financial institutions (IFIs) around the world
requires reliable financial reporting standards
to ensure their transparency, comparability
accountability toward Allah (God) and society
(Haniffa and Hudaib (2007). Question 1 (c)
recognition Constraints on
AAOIFI as an
banks Clashes with
1. Samy Nathan Garas, 2012, Internationalization of 2. 3.
5. Islamic Financial Institutions: Challenges and Paths to
Murniati Mukhlisin, Mohammad Hudaib, Toseef Azid,
2015, The need for Shariah harmonization in financial
reporting standardization: The case of Indonesia.
Nazim Uddin, 2012, Comparative Analysis of Reporting
Practices of Islamic Financial Institutions (IFIs).
Nikhil Chandra Shil, 2009, Harmonization of
Accounting Standards through Internationalization.
ACCA & KPMG, 2010, Harmonising Financial Reporting
Of Islamic Finance. ...
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- Spring '13
- Sir Arif
- Finance, International Financial Reporting Standards, Sharia, Islamic financial institutions