The challenge of new/revised Islamic accounting standards Fawad Laique, Partner, Ernst & Young Bahrain 5th November 2010
Financial Reporting Outlook 2009 Welcome and opening remarks The marketplace Kal, The Economist, Kaltoons.com
Financial Reporting Outlook 2009 Welcome and opening remarks A perspective on the economy Kal, The Economist, Kaltoons.com
Revised Conceptual Framework • Replaces the SFA No 1: Objectives of Financial Accounting and SFA No 2: Concepts of Financial Accounting for Banks and FIs • Effective 1 January 2011 • Key changes • Scope is broader. • Investment accounts – on versus off balance sheet treatment based on “authority to make decisions in relation to use of and deployment of funds” • Form and substance argument
Revised Consolidation standard • Effective 1 January 2010 • Scope • Control • “The power to govern the financial and operating policies of an entity with the objective of obtaining benefits from its operations” • Not a strict legal form over substance assessment anymore. • Where control is temporary, no need to do a line by line consolidation. • Disclosures • Disclosures widened.