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Master Class on Applying IFRS to Islamic financial transactions

The Malaysian Accounting Standards Board (MASB) hosted its first Master Class on Applying IFRS to Islamic financial transactions held in HELP University College, Kuala Lumpur on Wednesday, 4 May 2011.  This class was aimed at educating academics throughout Malaysia on the current accounting issues surrounding reporting Islamic financial transactions. Representatives from fifteen academic institutions were in attendance, namely, Asian Institute of Finance (AIF), HELP University College, INTI International University, The International Centre for Education in Islamic Finance (INCEIF), Kuala Lumpur Metropolitan University (KLMU), Malaysian Institute of Management (MIM), Multimedia University (MMU), Tunku Abdul Rahman College (TARC), University of Malaya (UM), Universiti Kebangsaan Malaysia (UKM), Universiti Teknologi MARA (UiTM), Universiti Tun Abdul Razak (UniRAZAK), Universiti Tunku Abdul Rahman (UTAR), and Universiti Teknologi Malaysia (UTM).

The briefing was presented by Puan Mas Sukmawati Abu Bakar (Associate Director of MASB Islamic Technical Unit). Participants were briefed on the financial reporting from an Islamic perspective which mainly stipulates that entities are required to apply Financial Reporting Standards (FRS’s) as issued by the MASB to all financial transactions, including Islamic financial transactions. Additionally, the MASB lead a discussion on certain tension points arising from applying FRSs to Islamic financial transactions, such as how to recognise profit on a credit-like transaction, and how the ‘true sale’ Shariah requirements impact ‘true sale’ accounting requirements.

A set of survey question was distributed to participants to determine what additional topics they would like for future Master Classes.  This Master Class appeared to be a great success, as it initiated a dynamic discussion on various accounting issues brought up within the presentation.

MASB Chairman, Dato' Mohammad Faiz Azmi was present to give a welcoming speech and interacted with participants. MASB Technical Director, Ms. Tan Bee Leng was also present together with the MASB secretariat.