Tuesday, June 3, 2014

ISRA Research Fellow & New Research Initiative

From 15th May 2014, I have been appointed as Research Fellow by the International Shari'ah Research Academy on Islamic Finance (ISRA). The position is on a part-time basis and I will spend at least 1 working day in ISRA. I will be involved as principal researcher in at least 1 research project and I will also be involved in other activities to enhance research function including conducting research workshops in relevant areas.

Here, I provide a synopsis of the research project that I will be heading at ISRA:

Research Title: "The Application of Intangible Assets in Islamic Financial Industry: An Islamic Accounting Perspective"

 Recent study by ISRA (i.e. Bouheraoua et. al., 2013) on the “Shariah Issues in Intangible Assets and their Application in Islamic Finance Institutions” has raised a number of pertinent issues. The study has critically discussed the emerging issues on intangible assets especially recognition and measurement; financing and trading; and zakat. The study has found that (i) there is an issue of gharar in the identification and determination of intangible assets; (ii) it is generally permissible to finance and trade intangible assets except in the trading and exchange of receivables, options and futures; (iii) zakat is obligatory on intangible assets if the intention is to trade them. However, the study has not really delved into accounting issues on intangible assets from an Islamic perspective. The study has reviewed only briefly the issues of accounting recognition. However, there are many other pertinent issues such as accounting measurement and financial reporting which have not been properly dealt with. As the Islamic financial industry is evolving with many related issues on intangible assets, there is an urgent need to extend the above study. This proposed study will examine the accounting issues of intangible assets from the Islamic (Shari’ah) perspective. Three pertinent accounting areas of concern to be examined are namely accounting recognition; accounting measurement; and financial reporting. This study aims to contribute towards a better understanding of accounting for intangible assets from an Islamic perspective. The study will also enhance the application of intangible assets in the Islamic financial industry and ensure that all the requirements are properly governed by the Shari’ah precepts.       

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