CIBAFI submitted comments to the Accounting & Auditing Organization for Islamic Financial Institutions (AAOIFI)

The Exposure Draft has been issued on 30th May 2018 and was open for public consultation until 30th June 2018.


Manama, Kingdom of Bahrain | Aligned with its role as an advocate of the Islamic Financial Services Industry (IFSI), the General Council for Islamic Banks and Financial Institutions (CIBAFI), the global umbrella of Islamic financial institutions, announced that it has submitted its comments on 28th June 2018 to the Accounting & Auditing Organization for Islamic Financial Institutions (AAOIFI) on the Revised Financial Accounting Standard No. 25: “Investments in Sukuk, shares and similar instruments”.​

The Exposure Draft has been issued on 30th May 2018 and was open for public consultation until 30th June 2018.

In its comments, CIBAFI thanked the AAOIFI for giving the opportunity to the Islamic Financial Services Industry to comment on the Exposure Draft and provided collective feedback of its member institutions from over 33 jurisdictions, comprising the following key points.

Firstly, the ED states that the investment categories are divided into: equity-type instruments; monetary debt-type instruments; non-monetary debt-type instruments; and other investment instruments. CIBAFI and its members are concerned that it might be difficult to apply these categories to Sukuk in general, especially to hybrid or mixed Sukuk which include equity and debt contracts (e.g. Murabahah/Mudarabah). The revised ED should address more clearly hybrid structures that represent convertible, exchangeable or perpetual Sukuk, which are structures that may mutate over time.

Secondly, CIBAFI members noted that, although non-transferable Sukuk fall outside the scope of this ED, there may be some sukuk which are in principle tradable but which in practice represent syndicated financing, and might be better classified as ‘loans or receivables’ than investment instruments, even ones which will be held-to- maturity investments. This could in principle create a difficult borderline.

Thirdly, CIBAFI noted that the definition of “participatory structure” in the ED refers among others to sharing losses. This could be taken to exclude Mudarabah structures, where the losses fall exclusively on the Rabb ul Mal, although in other respects it would be right to treat these as participatory. Some CIBAFI members suggest rewording the definition appropriately.

Full comments submitted to the AAOIFI are available on CIBAFI’s website:

In addition to policy and regulatory advocacy, CIBAFI continues to support the Islamic Financial Services Industry through various activities and initiatives. These include providing industry stakeholders with a platform to discuss emerging issues, representing the industry at major global financial events, and sharing knowledge through specialized publications and comprehensive training programmes.  


About the General Council for Islamic Banks and Financial Institutions (CIBAFI)

CIBAFI is an international organization established in 2001 and Headquartered in the Kingdom of Bahrain. CIBAFI is affiliated with the Organization of Islamic Cooperation (OIC).  CIBAFI represents the Islamic financial services industry globally, defending and promoting its role, consolidating co-operation among its members, and with other institutions with similar interests and objectives. With over 125 members from 33 jurisdictions, representing market players, international intergovernmental organizations and professional firms, and industry associations.

For more information about CIBAFI, please visit  

Tel: +973 17357300  Email: 

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