The Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) has proposed more detailed accounting standards for real estate while increasing disclosure for Islamic banks’ investment accounts.
The move by the Bahrain-based AAOIFI, one of the main standard-setting bodies in Islamic finance, suggests it is responding to the same kind of pressure to tighten standards that has been seen in the conventional finance industry since the global financial crisis erupted in 2008.
Both proposals were discussed at a public hearing for industry participants in Manama and there will be another hearing in Doha on April 12. They could become effective as early as July this year and would be applied retroactively.
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