Guidelines Issued for Financial Reporting in Islamic Banking Institutions in Afghanistan

By [ISTANBUL TIMES]

Kabul, Afghanistan - Central Bank of Afghanistan Issues New Guidelines

The Central Bank of Afghanistan (Da Afghanistan Bank) has issued guidelines for financial reporting by Islamic banking institutions in the country. The new guidelines aim to provide clarity and consistency in the presentation of financial statements by these institutions.

Key Requirements

• Islamic banking institutions must include notes to their financial statements that provide general information about the institution, including:
  • Main business activities
  • Country of incorporation
  • Address of the registered office
  • Scope of operations
  • Network of branches
  • Number of employees
  • Name of its ultimate holding company
• Institutions must disclose significant accounting policies used in preparing their financial statements, including:
  • Description of the measurement basis used
  • Specific policies for consolidation, intangible assets, valuation, income recognition, and impairment

Reporting of Non-Performing Financing

• The guidelines provide guidance on the reporting of non-performing financing, including:
  • Treatment of income previously accrued on non-performing financing
  • Provisioning policy
  • Write-off
  • Recoveries
  • Write-back
  • Reversal of provision

Purpose and Effectiveness

The Central Bank of Afghanistan has issued these guidelines to ensure that Islamic banking institutions in the country present their financial statements in a consistent and transparent manner. The guidelines are expected to improve the accuracy and reliability of financial reporting by these institutions and enhance investor confidence.

Compliance and Consequences

Islamic banking institutions in Afghanistan must comply with the guidelines, which come into effect immediately. Failure to comply may result in regulatory action, including fines or penalties.

Source: Da Afghanistan Bank (Central Bank of Afghanistan)