The MASB hosted the 2nd meeting of the IASB Consultative Group on Shariah-compliant Instruments and Transactions and two outreach meetings to discuss a Paper titled ‘Issues in the Application of IFRS to Islamic Finance’.
The meetings were led by the IASB Director of International Activities and Chairman of the IFRS Interpretation Committee, Mr. Wayne Upton and attended by the members of the accounting standard-setting bodies of Malaysia, Saudi Arabia, Dubai Financial Services Authority as well as representatives of the Islamic Financial Services Board, Islamic Development Bank, General Council for Islamic Banks & Financial Institutions and International Shari’ah Research Academy. The meetings were also attended by 35 other participants, representing regulators, local and international financial institutions, auditors and insurance associations.
The Consultative Group discussed the following issues:
1. Whether a sale-based Islamic finance contracts is within the scope of IFRS 15 Revenue from Contracts with Customers, or IFRS 9 Financial Instruments;
2. Whether the returns on an Islamic finance contracts represent payments of principle and finance income on the principle amount outstanding; and
3. presentation and measurement of finance income under IFRSs and as observed in selected Islamic banks.
The MASB was represented by its Chairman, Dato’ Mohammad Faiz Azmi, accompanied by Executive Director, Puan Tan Bee Leng and Associate Director (Islamic Research), Puan Mas Sukmawati.