Conceptual Framework for Accounting for IB (Full text)

Conceptual framework (CF) is fundamental, in the sense that other concepts flow from it and repeated references to it. It will be necessary in establishing, interpreting and applying accounting and reporting standard. The CF of Accounting for Islamic Banking had been developed by AAOIFI. However, the development of this CF is far from reaching the ideal one. This paper, therefore, tries to discuss how the CF of Islamic Banking had been developed and how it should be developed. In the authors’ opinion, in the short, the using of pragmatic approach in developing the CF is permissible because of the dharury condition. However, in the long term, there must be an effort to develop the CF using constructive approach in order to achieve the fully sharia’tic CF.