International Accounting

Abstracting and Indexing

Referativny Zhurnal VINITI RAS
Google Scholar

Online available



Cyberleninka (24 month OA embargo)

The specifics of accounting for lease (Ijarah) and bonds (Sukuk) of Islamic financial institutions

Vol. 23, Iss. 1, JANUARY 2020

PDF  Article PDF Version

Received: 5 August 2019

Received in revised form: 9 November 2019

Accepted: 11 November 2019

Available online: 16 January 2020


JEL Classification: M41

Pages: 4–16

Subject The article discusses the Islamic financial mechanisms and their accounting recognition by Islamic financial institutions. The study reveals the specifics of Islamic instruments, such as Ijarah and Sukuk, which are one of the most popular instruments in the Islamic finance practice.
Objectives The study discovers the specifics of lease finance and investment in securities as per the Islamic accounting model.
Methods Research employs methods of comparative analysis, systematization, classification, analogy and matching.
Results I unveil financial instruments, such as Ijarah and Sukuk, find the difference between traditional analogies and exemplify how they are carried in accounting books in Russia. What makes a lease contract under IFRS and Islamic accounting rules different is the subject of the contract, risks a party undertakes and the recognition of assets. The Islamic bond Sukuk is secured with a tangible asset, without providing for fixed interests.
Conclusions and Relevance The article reviews the accounting standard on lease Ijarah and compares it with the identical IFRS 16 – Lease. I point out the difference between the Islamic and international accounting models. The article describes the usage of the instrument, probable risks, accounting records to enter and derecognize the asset, its values and impairment, distribution of earnings and expenses among the lessor and lessee, accrual of profit and loss in accounting ledgers, provisions for each particular case and recognition of some off-balance sheet entries. I also refer to operating and finance lease when the lessee leases the property for its subsequent purchase. The article gives a detailed account of Sukuk and classifies types and classes of Sukuk, showing accounting records on income, provisions, valuation and revaluation of the asset and accrual of profit and losses. The findings is of applied and theoretical use in accounting.

Keywords: Islamic accounting, reporting, AAOIFI, standards, accounting records


  1. Gordeeva O.E., L'vova N.A. [Islamic financial system]. Vestnik SPbU. Seriya 5: Ekonomika = St. Petersburg University Journal of Economic Studies, 2009, no. 3, pp. 124–133. (In Russ.)
  2. Napier С. Other Cultures Other Accounting? Islamic Accounting from Past to Present. 5th Accounting History International Conference. Banff Canada, 2007, p. 34.
  3. Atmeh M.A. A Proposed Model for Accounting Treatment of Ijarah. International Journal of Business and Management, 2012, vol. 7, no. 18, pp. 49–56. URL: Link
  4. Sarea A.M., Hanefah М.М. The Need of Accounting Standards for Islamic Financial Institutions: Evidence from AAOIFI. Journal of Islamic Accounting and Business Research, 2013, vol. 4, iss. 1, pp. 64–76. URL: Link
  5. Lukinova L.G. [Enterprise as the lessor]. Promyshlennost': bukhgalterskii uchet i nalogooblozhenie = Manufacturing Industry: Accounting and Taxation, 2016, no. 11, pp. 51–60. (In Russ.)
  6. Solov'eva O.V. Mezhdunarodnye standarty finansovoi otchetnosti. Kontseptual'nye osnovy podgotovki i predstavleniya finansovoi otchetnosti [International Financial Reporting standards. Conceptual Principles for Preparation and Presentation of Financial Statements]. Moscow, EKSMO Publ., 2010, 140 p.
  7. DiVanna J.A. Understanding Islamic Banking. The Value Proposition That Transcends Cultures. Cambridge, UK, University Press, 2008, 174 p.
  8. Ghada A. Understanding the Dominance of Western Accounting and Neglect of Islamic Accounting in Islamic Countries. Journal of Islamic Accounting and Business Research, 2012, vol. 3, iss. 2, pp. 99–120. URL: Link
  9. Umarov Kh.S. [Practice in the application of Islamic accounting in the international economy]. Ekonomika i predprinimatel'stvo = Journal of Economy and Entrepreneurship, 2016, no. 8, pp. 955–958. (In Russ.)
  10. Ben Abd El Afou R. Knowledge of Islamic Accounting Among Professionals: Evidence from the Tunisian Context. Journal of Islamic Accounting and Business Research, 2017, vol. 8, iss. 3, pp. 304–325. URL: Link
  11. Napier С. Defining Islamic Accounting: Current Issues, Past Roots. Accounting History, 2009, vol. 14, iss. 1-2, рр. 121–144. URL: Link
  12. Umarov Kh.S. [Islamic model of accounting as a socio-economic phenomenon]. Mezhdunarodnyi bukhgalterskii uchet = International Accounting, 2017, vol. 20, iss. 7, pp. 385–396. (In Russ.) URL: Link
  13. Maali B. Accounting, Religion and Organizational Culture: The Creation of Jordan Islamic Bank. Journal of Islamic Accounting and Business Research, 2010, vol. 1, no. 2, pp. 92–113.
  14. Velayuntham S. Conventional Accounting vs Islamic Accounting: The Debate Revisited. Journal of Islamic Accounting and Business Research, 2014, vol. 5, iss. 2, pp. 126–141. URL: Link
  15. Voronova E.Yu. [Theoretical principles of the Russian and Islamic accounting: Comparative analysis]. Auditor, 2016, no. 9, pp. 35–40. (In Russ.)
  16. Voronova E.Yu. [Islamic accounting model: Approaches to the measurement of assets and liabilities]. Ekonomika i predprinimatel'stvo = Journal of Economy and Entrepreneurship, 2016, no. 8, pp. 938–941. (In Russ.)
  17. Umarov Kh.S. [On financial reporting in the Islamic insurance companies: AAOIFI Financial Accounting Standard 12]. Strakhovoe delo = Insurance, 2013, no. 6, pp. 52–57. (In Russ.)
  18. Vakhitov G.Z. [Sukuk and project finance opportunities it brings for the Russian economy]. Bankovskoe delo = Banking, 2014, no. 11, pp. 84–89. (In Russ.)

View all articles of issue


ISSN 2311-9381 (Online)
ISSN 2073-5081 (Print)

Journal current issue

Vol. 23, Iss. 3
March 2020