MASB issues three Discussion Papers on Takaful, Sukuk and Shariah Compliant Profit-sharing Contracts (16 December 2011)

On 16 December, 2011 the Malaysian Accounting Standards Board (Board) issued three Discussion Papers (DPs) for comment.

The Discussion Papers are:

  • MASB DP i-1 Takaful
  • MASB DP i-2 Sukuk
  • MASB DP i-3 Shariah Compliant Profit-sharing Contracts

In view of Malaysia’s convergence with International Financial Reporting Standards (IFRS) on 1 January 2012, these DPs have been issued to discuss the application of IFRS to takaful, sukuk and Shariah compliant profit-sharing contracts, and to seek comments on the tentative conclusions.

MASB DP i-1 Takaful outlines 7 key accounting issues brought to the staff’s attention during its meetings with stakeholders. The issues include the scope of MFRS 4, recognition and measurement of qard, consolidation and presentation of financial statements of takaful entities, retakaful, participating contracts, revenue recognition, and additional disclosures.

MASB DP i-2 Sukuk discusses the following 8 key sukuk accounting issues: consolidation of any entities created through the sukuk issuance, derecognition of assets transferred through the sukuk issuance, classification and measurement of sukuk by the issuer and investor, fair value measurement, impairment, derivatives, guarantees and related party disclosures.

MASB Discussion Paper i-3 Shariah Compliant Profit-sharing Contractsoutlines the 3 most often-cited accounting issues related to Shariah compliant profit-sharing contracts. These include classification and measurement, smoothing techniques and consolidation, joint ventures and investments in associates.

We welcome comments from any interested party on any or all of the DPs. Comments should be supported by specific reasoning and should be submitted to MASB by 16 March 2012. The public is encouraged to provide their comments electronically through “Comment Online” on our website. Alternatively, comments may be sent by mail, fax or e-mail to:

Technical Director

Malaysian Accounting Standards Board

Suite 5.02, Level 5 Wisma UOA Pantai

No 11 Jalan Pantai Jaya

59200 Kuala Lumpur

Fax: +603 2240 9300

Email: technical@masb.org.my

To download these documents, click on the following links: