AAOIFI Accounting Board issues AAOIFI Financial Accounting Standard (FAS) 51 “Participatory Ventures”

PR/11/2025

10 November 2025

The Accounting and Auditing Organization for Islamic Financial Institutions' (AAOIFI's) Accounting Board (AAB / the board) has officially issued FAS 51 "Participatory Ventures".

FAS 51 "Participatory Ventures" prescribes the accounting and financial reporting principles for recognition, measurement, presentation and disclosures to apply in relation to participatory ventures (including most of the common structures / products based on Mudaraba and Musharaka). This standard replaces earlier FAS 3 "Mudaraba Financing" and FAS 4 "Musharaka Financing".

FAS 51 covers accounting of participatory ventures in the books of account of the working partner(s) and the financial reporting for the participatory venture itself. Further, the standard also covers treatment of participatory venture with gradual transfer of ownership / transfer of units such as variable equity ventures (e.g., running Musharaka), diminishing Musharaka and restricted Mudaraba.

On this occasion, Mr. Hamad Al Oqab, chairman of the AAB, stated: "The board has been working on improving the existing FASs to align with the global best practices and to address the emerging needs of the evolving market". He further expressed: "We extend our sincere appreciation to the AAB members, the working group members and AAOIFI's secretariat for their contribution and commitment in improving the financial reporting of Islamic finance institutions."

Mr. Omar Mustafa Ansari, secretary general of AAOIFI, also stated: "At AAOIFI, we have always focused on the core Islamic finance products, amongst which Shari'ah-compliant participatory or profit and loss sharing structures (including, Mudaraba and Musharaka) are most significant and widely used". He added: "We expect that this standard will enhance transparency in financial reporting for participatory ventures."

The standard can be accessed on AAOIFI website: LINK