Financial Reporting Guidelines for Islamic Banks in Afghanistan

Introduction

The Central Bank of Afghanistan (DAB) has issued guidelines for financial reporting by Islamic banking institutions in the country. The guidelines aim to provide a standardized framework for Islamic banks to report their financial performance and position.

Key Requirements

Disclosure of Accounting Policies

• Disclose significant accounting policies, including:
  • Basis of preparation of the financial statements
  • Significant transactions
  • Measurement basis used in preparing the financial statements

General Information

• Provide general information on the institution, including:
  • Main business activities
  • Country of incorporation
  • Scope of operations
  • Network of branches
  • Number of employees
  • Name of its ultimate holding company

Accounting Policies for Specific Items

• Disclose accounting policies for:
  • Intangible assets: basis of valuation, income recognition, and provisioning policy
  • Impaired financing: recoverable amount and any additional allowance required

Objectives

The guidelines are aimed at enhancing transparency and disclosure in the financial reporting of Islamic banking institutions in Afghanistan. This will help to improve:

• The stability and confidence of the financial system
• Provide investors with more accurate and reliable information

Quotes

“We believe that these guidelines will play a crucial role in promoting transparency and accountability in the financial reporting of Islamic banking institutions in Afghanistan,” said a spokesperson for the Central Bank of Afghanistan.

“We are committed to ensuring that our regulatory framework is robust and effective in supporting the growth and development of the country’s financial sector.”

Implementation

The guidelines come into effect immediately, and all Islamic banking institutions in Afghanistan are required to comply with them.