Executing Shariah Standard 59

Following the Accounting and Auditing Organization for Islamic Financial Institutions' (AAOIFI) Shariah standards might have been a ‘nice-to-have’ factor in the past, but today, it has become a necessity. Much has been written so far about Shariah Standard 59. For me, this experience is not new as I have witnessed two other similar cornerstone events in the past. The following is how I see it.

The First EventStakeholders of the Islamic finance industry will still recall the 22nd of November 2007, a day that marks the remarkable stance for reforming the Sukuk industry by Sheikh Muhammad Taqi Usmani, Chairman of the AAOIFI Shariah Board.

At the time, the use of asset-based Sukuk came with capital and profit guarantees through repurchase underta...