Sharia accounting standard for sukuk (Islamic bond) accounting in Indonesia

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5 Citations (Scopus)


Purpose: This paper aims to analyze the need of Islamic banks for specific Statement of Financial Accounting Standards (SFAS) No. 110 for sukuk accounting in Indonesia. In fact, some Islamic banks have already prepared International Financial Reporting Standards (IFRS), and accordingly, a suitable standard is needed for this case. Design/methodology/approach: The research methodology involved interview with a senior accounting manager of an Islamic bank focusing on relevant topics in sukuk to sharpen the analysis. Equally important, research reviewed and compared financial statements on sukuk accounting among Islamic banks, before and after adoption of sukuk accounting standard. Findings: IFRS require market valuation based on interest rate. As interest rate is unlawful in Islamic teaching, IFRS may not accordingly be suitable. Therefore, SFAS No. 110 was issued by the Indonesian Institute of Accountants (Ikatan Akuntan Indonesia). Considering the fact that this standard did not explicitly adopt the IFRS paradigm, there have been consequent conflicts in Islamic bank management because of preference of global recognition to IFRS. Adopting IFRS would be more compatible with other countries’ general accounting standards. In addition, significant differences are found in sukuk accounting treatments by Islamic banks before and after the standard adoption. Research limitations/implications: This research only focuses on such question of why specific accounting standard for sukuk accounting is needed by Islamic banks in Indonesia, while only few Indonesian Islamic banks were initially aware of the issue. Originality/value: This paper may be the first paper discussing the response to and need for sukuk accounting in Indonesian Islamic banks.

Original languageEnglish
Pages (from-to)434-447
Number of pages14
JournalJournal of Islamic Accounting and Business Research
Issue number3
Publication statusPublished - 2018


  • Accounting
  • IFRS
  • Islamic
  • Sukuk


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