Statement of Profit or Loss
The purpose of this blog is to share knowledge about Islamic financial reporting practiced by Islamic financial institutions in Malaysia. Any development about the subject matter will be updated here.
Wednesday, August 30, 2017
Sunday, August 27, 2017
5.0 CONCLUSIONS
Current study examines the conformity of Malaysian
IFIs with regards to AAOIFI disclosure requirements. The overal results are
SOFP 70.3% compliance, SOPL 45.6% compliance, SOCIE 95% compliance, SOCF 100%
compliance. It can be concluded Malaysian IFIs are complying the requirements
of AAOIFI even though they are only using AAOIFI standards as one of guidelines
in preparation and presentation of their financial statements.
There are two recommendations to see the
harmonisation between AAOIFI financial statements and MFRS financial
statements. First, Malaysian Accounting Standards Board can consider to amend
the disclosure requirement of (1) changes in restricted investment and (2)
sources and uses of charity fund, from notes to the financial statement to a
financial statement status like SOFP and SOPL. Alternatively, Malaysian
Accounting Standards Board allows the IFIs to voluntarily disclose changes in
restricted investment and sources and uses of charity funds as financial statements.
Second, Malaysian representative in AAOIFI could
suggest the inclusion of items currently disclosed in MFRS format but not
required by AAOIFI format to be included in AAOIFI format.
Last but not least, future
study should look at a more detailed requirements of AAOIFI and MFRS to find
way for harmonisation of AAOIFI and MFRS in future.
4.17 KUWAIT FINANCE HOUSE
Kuwait
Finance House (Malaysia) Berhad (KFH Malaysia) was established on 8 May 2005.
It is the first foreign Islamic bank that was granted a licence under the
Islamic Banking Act (Malaysia) 1983. As of 2015 its paid up capital stood at
RM1,425,272,000. It offers a complete range of Shariah-based financial products
and services under Corporate and Investment, Commercial, and Retail and
Consumer Banking as well as Treasury and International Business.
Table
4.17: Level of compliance to MFRS and AAOIFI standards
No.
|
Financial statement
|
Conformity
|
1.
|
Statement on adoption
of AAOIFI
|
Nil
|
2.
|
Statement on adoption
of MFRS
|
100%
|
3.
|
Statement of financial
position
|
70.0%
|
4.
|
Statement of profit or
loss
|
66.7%
|
5.
|
Statement of changes in
equity
|
95%
|
6.
|
Statement of cash flow
|
100%
|
7.
|
Statement of sources and uses of charity fund
|
Yes (notes)
|
8.
|
Statement of restricted
investment
|
No
|
In term of financial reporting, it adopts fully the requirements made by Malaysian Financial Reporting Standards (MFRS) and adheres the AAOIFI at the above levels. The bank complies with MFRS and also conforms to AAOIFI in presentation of SOFP (70%), SOPL (66.7%), SOCIE (95%) and SCF (100%). It does not either present SSUCF and SORI as financial statement but show SSUCF in notes to financial statement.
4.16 ALRAJHI BANKING AND INVESTMENT CORPORATION
Its operations in Malaysia was established in 2006. As of 2015 it has a paid up
capital of RM1,000,000,000 in Ordinary shares. It has 24 branches throughout
Malaysia and it services range from personal, business as well as affluence.
In
term of financial reporting, it adopts fully the requirements made by Malaysian
Financial Reporting Standards (MFRS) and adheres the AAOIFI at the following
levels:
Table
4.16: Level of compliance to MFRS and AAOIFI standards
No.
|
Financial statement
|
Conformity
|
1.
|
Statement on adoption
of AAOIFI
|
Nil
|
2.
|
Statement on adoption
of MFRS
|
100%
|
3.
|
Statement of financial
position
|
75.0%
|
4.
|
Statement of profit or
loss
|
38.9%
|
5.
|
Statement of changes in
equity
|
95%
|
6.
|
Statement of cash flow
|
100%
|
7.
|
Statement of sources and uses of charity fund
|
No
|
8.
|
Statement of restricted
investment
|
No
|
The
bank complies with MFRS and also conforms to AAOIFI in presentation of SOFP
(75%), SOPL (38.5%), SOCIE (95%) and SCF (100%). It does not either present
SSUCF and SORI as financial statement or show in notes to financial statement.
4.15 OCBC AL-AMIN MALAYSIA BERHAD
OCBC Al-Amin (Malaysia) Berhad was established on 8
May 2005. As of 2015 its paid up capital stood at RM165,000,000. It offers a
complete range of Shariah-based financial products and services under Corporate
and Investment, Commercial, and Retail and Consumer Banking as well as Treasury
and International Business.
In
term of financial reporting, it adopts fully the requirements made by Malaysian
Financial Reporting Standards (MFRS) and adheres the AAOIFI at the following
levels:
Table
4.15: Level of compliance to MFRS and AAOIFI standards
No.
|
Financial statement
|
Conformity
|
1.
|
Statement on adoption
of AAOIFI
|
Nil
|
2.
|
Statement on adoption
of MFRS
|
100%
|
3.
|
Statement of financial
position
|
65.0%
|
4.
|
Statement of profit or
loss
|
50.0%
|
5.
|
Statement of changes in
equity
|
95%
|
6.
|
Statement of cash flow
|
100%
|
7.
|
Statement of sources and uses of charity fund
|
Yes (notes)
|
8.
|
Statement of restricted
investment
|
No
|
It adopts fully
the requirements made by Malaysian Financial Reporting Standards (MFRS) and
adheres the requirements of AAOIFI at certain levels. Its SOFP complies 65%
whereas SOPL 50% to AAOIFI. SOCIE is at 95% whereas SCF is at 100%. SSUCF and
SORI are not presented as financial statement but SSUCF is shown in the notes
to financial statements.
4.14 ALKHAIR INTERNATIONAL ISLAMIC BANK BERHAD
Al-Khair International Islamic Bank was established in 2007.
It is the first foreign Islamic Bank in Malaysia licensed to conduct a full
range of non-Malaysian Ringgit banking activities under the Malaysia
International Islamic Financial Centre (MIFC) initiative. Its paid up capital
as of 2015 is RM86,487,610 and its services comprise of treasury, deposits and
murabahah.
Table
4.14: Level of compliance to MFRS and AAOIFI standards
No.
|
Financial statement
|
Conformity
|
1.
|
Statement on adoption
of AAOIFI
|
Nil
|
2.
|
Statement on adoption
of MFRS
|
100%
|
3.
|
Statement of financial
position
|
60.0%
|
4.
|
Statement of profit or
loss
|
33.3%
|
5.
|
Statement of changes in
equity
|
95%
|
6.
|
Statement of cash flow
|
100%
|
7.
|
Statement of sources and uses of charity fund
|
No
|
8.
|
Statement of restricted
investment
|
No
|
In term of
financial reporting, the bank adopts fully the requirements made by Malaysian
Financial Reporting Standards (MFRS) and adheres the requirements of AAOIFI at
certain levels. Its SOFP complies 60% whereas SOPL 33.3% to AAOIFI. SOCIE is at
95% whereas SCF is at 100%. SSUCF and SORI are not presented as financial
statement or shown in the notes to financial statements.
4.13 ALLIANCE ISLAMIC BANK MALAYSIA BERHAD
Alliance Islamic Bank was incorporated in June 2007
and commenced its operations in 2008. It has so far 8 branches in Malaysia. As
of 2015 it has a paid up ordinary share capital of RM300,000,000. It offers
Islamic financial products such Bai' Bithaman Ajil, Al-Ijarah Thumma
Al-Bai’, Qardhul Hassan, Bai' Al-Inah, Bai' Al-Dayn and Tawarruq.
Table
4.13: Level of compliance to MFRS and AAOIFI standards
No.
|
Financial statement
|
Conformity
|
1.
|
Statement on adoption
of AAOIFI
|
Nil
|
2.
|
Statement on adoption
of MFRS
|
100%
|
3.
|
Statement of financial
position
|
70.0%
|
4.
|
Statement of profit or
loss
|
38.9%
|
5.
|
Statement of changes in
equity
|
95%
|
6.
|
Statement of cash flow
|
100%
|
7.
|
Statement of sources and uses of charity fund
|
No
|
8.
|
Statement of restricted
investment
|
No
|
In term of
financial reporting, the bank adopts fully the requirements made by Malaysian
Financial Reporting Standards (MFRS) and adheres the requirements of AAOIFI at
certain levels. Its SOFP complies 70% whereas SOPL 38.9% to AAOIFI. SOCIE is at
95% whereas SCF is at 100%. SSUCF and SORI are not presented as financial
statement or shown in the notes to financial statements.
Subscribe to:
Posts (Atom)
ISLAMIC FINANCIAL REPORTING MODEL IN MALAYSIA
Based on the research findings, the following model was developed: IFR = 70.3SOFP + 45.6SOPL + 95SOCIE + 100 SOCF SSUCF (47.1%) and SOR...