AAOIFI Accounting Board issues its Statement 1/2025 withdrawing FAS 26 “Investment in Real Estate”

PR/12/2025

29 December 2025

The Accounting and Auditing Organization for Islamic Financial Institutions' (AAOIFI's) Accounting Board (AAB / the board) has officially issued AAB Statement 1/2025 "Withdrawal of FAS 26 "Investment in Real Estate" and Related Transitional Provisions".

After due process, the board decided to withdraw FAS 26 "Investment in Real Estate" on the premise that generally accepted accounting principles adequately cover the accounting treatment for investment property. The AAB Statement 1/2025 also provides transitional accounting treatment and relevant guidance on the applicability of generally accepted accounting principles in the specific context of Islamic financial institutions.

On this occasion, Mr. Hamad Al Oqab, chairman of the AAB, stated: "The board's endeavour has been to align accounting and financial reporting with the global best practices and to reduce the difference in practice with generally accepted accounting principles". He further stated: "The AAOIFI strategy has been to issue a separate standard only if it adds value on the premise of Shari'ah requirements or difference in business model or transaction structure. Since FAS 26 "Investment in Real Estate" was not adding value in this context, it was decided to withdraw it."

Mr. Omar Mustafa Ansari, secretary general of AAOIFI, also added that: "Comprehensive accounting guidance and facilitation has been provided for the Islamic financial institutions for transition on withdrawal of FAS 26 "Investment in Real Estate.""

The statement can be accessed on AAOIFI website: LINK