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ABSTRACT This paper is on the study of Ijarah Financing in Malaysia and Bahrain with the related issues faced by Islamic Banks in Malaysia regarding Ijarah. All the data were extracted from the annual reports 2011 for each respective bank in Malaysia and Bahrain and the data were analyzed to measure the contribution of Ijarah towards the banking industry. Besides, the assignment also aims to find out more on issues occurring in Islamic Bank in Malaysia based on the interview conducted with a few chosen banks. The findings shows that the variations of Ijarah offered are different between Islamic Banks in Malaysia and Bahrain.


Descriptions A. Introduction B. Ijarah (Islamic Leasing) C. Types Of Ijarah D. A Comparative Study Of AAOIFI (FAS 8) AND MASB 10

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E. Findings And Discussion F. Issues On Ijarah Financing G. Recommendation H. Limitations I. Conclusion J. References

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A. INTRODUCTION Unlike conventional economics which focuses on profit maximization, the Islamic economic system aims at the study of human falah achieved by organising the resources of earth on the basis of cooperation and participation (Akram Khan, p.55). In other words, the Islamic economic system aims at attaining Allah s.w.ts pleasure, while pursuing economic activities within the boundaries of the Islamic shariah. The Islamic shariah puts a heavy importance on the well being of the community and social justice. Thus, this also means the prohibition of interest. The prohibition of interest is one of the main factors that put Islamic economics in distance with the conventional economics. Because of this difference in nature, Islamic Financial Institutions (IFIs) have different types of contracts as practiced by conventional financial institutions. One of the types of contracts entered by IFIs is the Ijarah contract. Ijarah contracts are also known as Islamic leasing. Basically, this study is done in order to understand more the nature of leasing according to Islamic principles, and at the same time, the differences of ijarah with conventional leasing. In addition, this study also aims to identify the types of ijarah practiced by IFIs in Malaysia and also to see how Malaysian IFIs disclosed their ijarah financing in comparison to their counterparts in Bahrain IFIs. This is because as one ummah, it is important to have a standardized standard that is Shariah compliant and could be compared with all the other IFIs. Analysis was done based on the financial reports of the IFIs to observe the differences in the disclosures. The result obtained from the observations then will be used to suggest some improvements that could be done to improve the IFIs.

B. IJARAH (ISLAMIC LEASING) Ijarah contract could be defined as a contract that transfers the usufruct of an item to another person for a specified period in exchange for a specified consideration. It also could be referred to as the renting and leasing of assets. The main difference between ijarah contract and sales contract is that ijarah contract focuses on the selling and purchasing of the usufructs of goods/properties, but the physical goods are still subjected to the ownership of the lessor.

However, in this era of globalisation, there are many more complex transactions involving ijarah than the basic concept as mentioned above (Mohd Shariff and Abdul Rahman, n.d.). Theoretically, only operating ijarah is only allowed in Islam. But nowadays, in order to cater the demand of Muslims all around the world, many other types of ijarah emerged. Among the rulings on ijarah is mentioned in the Quran, And if they suckle your offspring, give them their recompense (Al-Tahrim: 6). Plus, with reference to Contracts and the Products of Islamic Banking written by Zaharuddin Abd Rahman, the Muslim nation during the time of the Companions of Prophet reached a consensus on the permissibility of leasing. It is agreed that if the observable usufruct of goods clearly benefits the people, it is permissible to lease that asset based on the validity selling the goods themselves.

C. TYPES OF IJARAH Basically, there are two types of ijarah, which are operating ijarah and also Ijarah Muntahia Bittamleek (IMBT). In Malaysia, there is also another special type of ijarah known as Al-Ijarah Thumma Al-Bai or AITAB for short.

1. Operating Ijarah Operating Ijarah, or also known as only ijarah, are ijarah contracts that do not end with transfer of ownership of leased assets to the lessee. Ijarah financing that uses operating ijarah could be further explained by using the diagram below.

First of all, the lessor, or the IFIs, will buy the asset from the seller and thus, the ownership of the asset will transfer to the IFIs. The IFIs will then lease the asset to a lessee 4

for a specified period of time with an agreed consideration. Then, along the period, the lessee will pay the agreed lease rentals, and the lessor will use the rental payments to cover the purchase price of the asset. At the end of the lease period, the lessee will return the goods to the lessor. The lessor then could lease the goods to a new lessee. Operating Ijarah is usually used to lease out high marketability assets such as aeroplane, private jets, etc. This will benefit the lessor as they could gain multiple times from leasing the assets as long as the assets useful life. As for lessee, this will benefit them as they dont have to buy assets that they dont really want, but need to use it for a specific period of time. It should be noted too that the asset ownership risk will be bear by the lessor, while the operational risk will be bear by the lessee.

2. Ijarah Muntahia Bitamleek The second type of ijarah, which is widely used for financing nowadays, is known as Ijarah Muntahia Bitamleek (IMBT). It differs with operating ijarah in which this ijarah end with transfer of ownership of leased assets to the lessee.

From the diagram, it can be seen that the lessor will first purchase the asset from the vendor according to what has been prescribed by the lessee (their customer). The title of the asset will then transfer to the lessor first. Consequently, the lessor will enter into a contract with the lessee for an agreed consideration and period of lease, plus an agreement to transfer the ownership of the leased assets to the lessee. According to AAOIFI, there are four ways in which the ownership can transfer from the lessor to the lessee, which are;

1. 2.

IMBT through gift. IMBT through transfer of legal title at the end of a lease for a token consideration or other amount specified in the lease.


IMBT through transfer of legal title prior to the end of lease term for a price that is equivalent to the remaining ijarah instalments.


IMBT through gradual transfer of legal title of the leased asset.

3. Al-Ijarah Thumma Al-Bai (AITAB) AITAB is a lease contract ending with an option to buy the asset for the lessee. The title of the asset will pass to the lessee when the lease contract is terminated. What differentiates AITAB with other ijarah contracts is that AITAB consists of the combination of two Islamic contracts, which is the Al-Ijarah (lease) and also Al-Bai (sale) in one trading document. Although AITAB is considered controversial, due the requirement imposed by the Hire-Purchase Act 1967, it is widely practiced by Islamic Banks in Malaysia. Scholars approve the application of AITAB as long as the contracting parties are aware of and understand the nature of AITAB (Abdullah and Dusuki, 2006). The operation of AITAB starts with the first contract when the hirer leases assets from the lessor at an agreed consideration over a specified period. Upon the ending of the leasing period, the lessee will enter into a second contract to purchase the assets from the lessor at an agreed price.

D. A COMPARATIVE STUDY OF AAOIFI (FAS 8) AND MASB 10 In Malaysia, it is a requirement for all the banks that uses ijarah or lease financing to recognise, measure, and disclose the ijarah financing according to MASB 10. AAOIFI on the other hand, is a standard that was established in Bahrain to set up standards to be used by IFIs worldwide. Thus, for this paper, a comparative study was done between AAOIFI (FAS 8) and MASB 10 to see the differences between the two standards and recognize which standard was being used by Malaysian IFIs to record their ijarah financing. The AAOIFI defines Ijarah as ownership of the right to the benefit of using an asset in return for consideration. The MASB 10 defined lease as an agreement. The lessor conveys to the lessee in return for a payment or series of payments the right to use an asset for an agreed period of time. The definition given by the AAOIFI is equipped with additional 6

conditions, which will differentiate Ijarah from conventional leasing. In the AAOIFIs standard (FAS 8) states that the satisfaction of the benefit should be of allowable nature and the benefit should be in accordance with the Shariah. Thus, the AAOIFIs standard gives more detail with respect to the lawfulness of both usufruct and the rent. This is important to guarantee that Ijarah only signifies such an arrangement where both the usufruct and the return are permissible by the Shariah. MASB 10 adopts a wider aspect of usufruct and return since religion is never an element to be observed by the standard-setters. As stated, AAOIFIs standard divides Ijarah into two groups, which are Operating IMBT. The main standard used in the classification is whether the lease includes a promise that the legal title in the leased asset will pass to the lessee at the end of the lease term. AAOIFI requires IMBT to be accounted for as separate transactions of an operating lease followed by a disposal and recommends four ways to transfer ownership of an asset in IMBT, like in the previous section. In MASB 10, a lease is classified as a finance lease if it transfers substantially all the risks and rewards incident to ownership of the asset from the lessor to the lessee but the title may or may not eventually be transferred and all other leases which do not meet this standard, are to be considered as operating leases. A hire purchase contract for the hire of an asset would also fall within the definition of a finance lease. Hire purchase contracts in Malaysia contain provisions, which transfer the title of the asset to the hirer upon payment of all the hire purchase instalments. AITAB is the Islamic alternative to conventional hire purchase in Malaysia and almost all banks provide it for vehicle financing. It is a leasing ending with sale and comprises of two different contracts which consist of lease and sale contracts. However, MASB 10 standard does not elaborate the meaning of transfers substantially all risks and rewards incident to ownership. It relies on the consideration of substance over form in deciding whether a lease should be classified as a finance lease or an operating lease. Specifically in the Ijarah contract, the legal form of the contract is related to the determination of the owner of the asset. In relation to that it is definitely clear that the owner and the responsibilities of the asset are still lying on the lessor and it is not been transferred to the lessee, as lessee is only the beneficial owner. Meanwhile, the substance of the contract is related to the maintenance expenses. With regard to that, either party needs to 7

be responsible for the expenses. Thus, in the issue of determining whether the substance is in the control of the form or otherwise, it is a need to determine who is responsible for incurring the expenses for the assets that underlines Ijarah contract. Note that impairment caused by the lessees misconduct is not borne by the lessor but by the lessee himself. In Malaysia context, again it is highlighted that AITAB is governed by an act called Hire Purchase Act 1967 and an accounting standard, FRS 117 on leases. Both, the standard and the act are conventional in nature. Obviously, it follows the concept of substance over form. Hence, it reflects the recording of the asset which underlies the Ijarah contract. The main differences in AAOIFI and MASB 10 are revenue recognition and the effect of residual value since the contracts of Ijarah and lease are different in their substance. In AAOIFI, no provision is recorded on interest rate uncertainty because the rental is fixed throughout the Ijarah term or the terms of payment are determined up front and the lessor cannot increase the rent unilaterally. Furthermore, the AAOIFI does not mention the provision for doubtful debt in the case of Ijarah, as it might be understood that the provision is commonly practiced but the AAOIFI recommends the financial institutions to establish a provision for the repair of leased assets if the repair expenses differ from year to year over the lease term. AAOIFI also concerned about the recording of the transaction of permanent impairment of the leased asset before the legal title is passed to the lessee. If that was due to the lessees actions and the instalment paid was more than the fair rental amount, then the lessor has to record the transaction as his liability and recognize it as a loss, which will be posted to the income statement. No such emphasis was given in the MASB 10. For the disclosure items, MASB 10 requires the major class of assets of accumulated depreciation to be stated. The method for income recognition and future minimum lease payment to be received for specified future payment also must be disclosed. Contrast with the MASB 10 standard, since there is only one method of income recognition is recommended, no such disclosure is needed in AAOIFI. In addition, a unique requirement in the AAOIFI disclosure is lease assets for operating Ijarah and IMBT are to be distinguishable whereby assets for operating Ijarah are recorded as investment in Ijarah assets while assets for IMBT are recorded as IMBT assets. Shown below is the summarization of the differences of accounting treatment between AAOIFI and MASB 10. 8

Exhibit 1: Main differences of accounting treatment between AAOIFI (FAS8) and MASB 10
Items AAOIFI (FAS8) MASB 10 Lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership.

Classification of leases

All leases should be classified as an operating lease. Ijarah ending with a transfer of ownership should be treated as two separate transactions of operating lease & sale and not as a finance lease.

Leases in the financial statements of lessees

In case of Ijarah ending with a transfer of ownership, the lessee would recognize lease payments as expenses throughout the lease term. When the asset is transferred to the lessee, the lessee would recognise the asset acquired.

Lessees shall recognize finance leases as assets and liabilities in their statements of financial position at amounts equal to the fair value of the leased property or if lower, the present value of the minimum lease payments, each determined at the inception of the lease. The discount rate to be used in calculating the present value of the minimum lease payments is the interest rate implicit in the lease If this is practicable to determine but if not, the lessees incremental borrowing rate shall be used. Any initial direct costs of the lessee are added to the amount recognized as an asset. Lessors shall recognize assets held under a finance lease in their statements of financial position and present them as a receivable at an amount equal to the net investment in the lease.

Leases in the financial statements of lessors

In case of Ijarah ending with a transfer of ownership, the lessor would present an asset in its statement of financial position and recognize lease instalments as revenue throughout the lease term. When the asset is transferred to the lessee, the lessor may recognise a gain or loss on disposal.

E. FINDINGS AND DISCUSSION According to our findings, there are 16 Islamic banks and 4 International Islamic banks operate in Malaysia. Majority of the Islamic Banks in Malaysia offered Ijarah products, for example, Operating Ijarah, Ijarah Thumma Al-Bai and Ijarah Muntahia Bitamleek except for Al Rajhi Banking & Investment Corporation (Malaysia) Berhad. Meanwhile, all 4 International Islamic Bank for instance Al Khair International Islamic Bank Berhad, Deutsche Bank Aktiengesekkschaft, Elaf Bank B.S.C (c) and PT. Bank Syariah Muamalat IndonesiaTBK does not have offers any Ijarah products to the customers. Prior study on Bahrain Islamic Retail Banks also has been done by our group to explore the Ijarah financing in Bahrain and to compare between Ijarah financing in Islamic Banks in Malaysia and Bahrain. During the study period, we found that only 6 Islamic Retail Banking operates in Bahrain and out of 6 banks, only 4 banks offered Ijarah products in their banking business. In short, all the data findings were collected and summarized on the following table.



Affin Islamic Bank Berhad Al Rajhi Banking & Investment Corporation (Malaysia) Berhad Alliance Islamic Bank Berhad AmIslamic Bank Berhad Asian Finance Bank Berhad Bank Islam Malaysia Berhad Bank Muamalat Malaysia Berhad CIMB Islamic Bank Berhad


10.1% 43.98% 4.25% 2.19% 19.6%



HSBC Amanah Malaysia Berhad Hong Leong Islamic Bank Berhad Kuwait Finance House (Malaysia) Berhad Maybank Islamic Berhad OCBC Al-Amin Bank Berhad Public Islamic Bank Berhad RHB Islamic Bank Berhad Standard Chartered Saadiq Berhad

3.02% 41.42%


32.44% 35% 53% 33%


Table 1 shows the comparative analysis between Islamic Banks in Malaysia and Ijarah product offered by the banks. 15 out of 16 Islamic Banks in Malaysia offered Ijarah financing to their customers and the only bank which did not offer Ijarah product and financing is Al Rajhi Banking & Investment Corporation (Malaysia) Berhad. Based on the data findings above, Islamic Banking in Malaysia offered various types of Ijarah financing for example Operating Ijarah, AITAB and IMBT. With those products, people will have a chance to choose which contract they are preferred too and benefit to them generally. In fact, we can conclude that Malaysian have a variety of options on leasing either for operating lease or financing lease. According to the table above, the highest percentage of Ijarah offered is 53% from Public Islamic Bank Berhad, meanwhile the lowest percentage of Ijarah offered is 2.19% from Bank Islam Malaysia Berhad.



Al Khair International Islamic Bank Berhad Deutsche Bank Aktiengesekkschaft Elaf Bank B.S.C (c) Bank Syariah Muamalat IndonesiaTBK







Table 2 shows the comparative analysis on International Islamic Banks in Malaysia with Ijarah products. Based on the empirical study on banks annual report, they did not offered any ijarah products or financing in their banking business especially in Malaysia.



Al Baraka Islamic Bank B.S.C (c) Al Salam Bank Bahrain B.S.C Bahrain Islamic Bank B.S.C Ithmaar Bank B.S.C Khaleeji B.S.C Kuwait Finance House (Bahrain) B.S.C (c) Commercial Bank


24.5% 50.49%


Table 3 shows the comparative analysis on 6 Retails Islamic Banks in Bahrain with Ijarah products. Out of 6 banks that operate in Bahrain, only 4 banks offered Ijarah financing. 12

According to the table above, in Bahrain, their major contribution on Ijarah product is Ijarah Muntahia Bitamleek. The highest percentage of Ijarah financing offered by the bank is Al Baraka Islamic Bank B.S.C (c) which is 53.4% meanwhile the lowest percentage of Ijarah financing offered by the bank is Kuwait Finance House (Bahrain) B.S.C (c) which comprise of 26.37%. Thus, this comparative analysis study gives us an idea that almost of half Bahrain citizen use Ijarah Muntahia Bitamleek as their Ijarah financing for their subjectively purposes. Next, based on the findings, our group managed to summarize an analysis on banks respectively in Malaysia and Bahrain. Our analysis specifically conducted on what is the most Ijarah product used in Malaysia and Bahrain, the graph percentage trends on Ijarah products in Malaysia and Bahrain and the analysis on type of disclosure of Islamic Banks.


20 10 0 6 0

11 0

6 4

Islamic Banking in Malaysia Bahrain Banks


According to the graph above, AITAB is the most popular product offered by Islamic Banks in Malaysia for Ijarah financing and leasing. 11 banks comprise of Standard Chartered Saadiq, Public Islamic Bank Berhad, OCBC Al-Amin Bank Berhad, Affin Islamic Bank Berhad, Alliance Islamic Bank Berhad, AmIslamic Bank Berhad, Bank Muamalat Malaysia Berhad, HSBC Amanah Malaysia Berhad, Hong Leong Islamic Bank Berhad, Kuwait Finance House (Malaysia) Berhad and Maybank Islamic Berhad offered AITAB in their banking business. Meanwhile, in Bahrain, only 4 banks offered IMBT as their only main ijarah financing product.


GRAPH 2: IJARAH FINANCING IN MALAYSIA 53% 60.00% 43.98% 41.42% 50.00% 35% 33% 32.44% 29.70% 40.00% 27.18% 22.10% 19.60% 19% 30.00% 10.10% 20.00% 4.25% 3.02% 2.19% 0% 10.00% 0.00% -10.00%

The graph above shows the percentage trend the Ijarah financing offered in Malaysia. The percentage obtained from the notes to the account of Financing and Advances in the annual reports, because under the Financing and Advances is where the ijarah financing is described. Therefore, in order to obtain the findings, we sort out the relevant Ijarah products for comparison between each bank in Malaysia.

GRAPH 3: IJARAH FINANCING IN BAHRAIN 60.00% 40.00% 20.00% 0.00% -20.00% 53.40% 24.5% 0.00% 0.00% 50.49% 26.37%

Similar to the previous graph, the above graph shows the percentage trend on Ijarah financing offered in Bahrain.



Islamic Banks

The above graph 4 shows the numbers of disclosure used by Islamic Banking in Malaysia and Bahrain. The 16 banks that practices MASB are all, of course, from Malaysia. While all the four banks that practices AAOIFI is from Bahrain. This is due to the fact that AAOIFI is based in Bahrain, while MASB is made compulsory for all Malaysian banks to follow.

F. ISSUES ON IJARAH FINANCING As stated, Islamic banks in Malaysia mostly uses AITAB for ijarah financing. There are several issues related to the operation of ijarah especially AITAB in Malaysia after conducting interviews with officers from Islamic bank and also after reading some journals correlated to ijarah. The issues included are in terms of customers attitude, lack of experience and knowledge among bank officers, lack of Shariah framework and competition in the market. Firstly, one of the problems faced in offering ijarah products is customers attitude towards the product. From our interview with bank officers, they admitted that many customers do not really understand the basic differences between AITAB and conventional hire-purchase facility. This is mainly due to their perception that AITAB resembles 15

conventional hire-purchase especially in their operations, documentations and legal prescriptions. Customers do not seem to realize the characteristic of AITAB as a Shariah compliant product and its benefits to them. Some customers simply say that AITAB is used as merely a means of avoiding the prohibition of riba. For some sceptics, they even go as far as criticizing AITAB as just another way of imposing interest through a backdoor, except for its Arabic name which sounds more Islamic. Secondly, lack of experience and knowledge among bank officers is one of the challenges in offering AITAB or ijarah product to customers. This also one of the reasons led to the misleading view of AITAB among the customers in giving correct and satisfactory explanation about AITAB. Some of these bank officers do not even understand the distinction between AITAB and conventional hire-purchase. Many proclaim that both products are similar especially with regards to its documents, procedures and governance. Therefore, they are unable to highlight the advantages and benefits of AITAB as compared to conventional hire-purchase. Thirdly, in terms of documentation. Terms and conditions in AITAB agreement are designed by lawyers on the basis of the Hire-Purchase Act 1967 and principles of contract law except for some modifications made to these documents to comply with Shariah requirements. Therefore, the documentation requirements for AITAB may seem more complicated than that of conventional facility because it involves additional document such as acceptance (aqd) letter. Besides that, the documents also must be presented to the customer in sequence which is first related to leasing (ijrah) agreement and then sale and purchase agreement. The bank officers must explain the terms, conditions, rights and liabilities in the agreement, the commencement and expiry of agreement. If the customer understands and agrees with the terms of the agreement, he may then sign the agreement. The customer must also be made aware of the consequences of signing every document, so that he understands his rights and obligations under the Islamic hire-purchase agreement. Some banks even require a customer to complete a bulk of documents relating to the facility. Such requirements often burden the customer, especially when there is an error or mistake made by the customer, which may cause delay in the processing of the application. This is one of the reasons why some dealers recommend conventional hire-purchase in order to speed up their customers application. 16

Moreover, competition in the market between ijarah product and conventional hirepurchase also is one of the challenges faced by Islamic bank in Malaysia. Conventional hirepurchase has long established its name and reputation in the market and naturally it give big challenge for AITAB to penetrate into the market appealing to customers who are more accustomed to the conventional product. Another arising issue with respect to competition is cost-efficiency. Since AITAB is a new product and requires more documents and paper works to be filled by both parties, the cost issue will naturally pose an inevitable challenge to banks. Furthermore, AITAB or ijarah product is lacking in Shariah regulatory framework despite being one of the most demanding facilities of Islamic bank.

G. RECOMMENDATIONS Government plays an important role in standardizing rules and regulation in all Islamic banks in Malaysia. Government should enforce all Islamic banks to implement AAOIFI as a comprehensive Islamic framework that will acts as a legal authority and reference for Islamic product transaction especially ijarah product. Issuance of TRi-2 (Technical Release for ijarah) by MASB is already a good step to have an Islamic framework in Malaysia that is in line with Shariah requirement. However, further step is needed to standardize rules and regulations in all Islamic banks.

H. LIMITATIONS One of the limitations we faced is time constraint. Due to the time constraint, our group only manages to analyze financial statement of Islamic financial institutions (IFIs) from only two countries which is from Malaysia as well as Bahrain. It should be noted that the number of Islamic financial institution that we studied is only less than 30 (Islamic Financial Institution from Malaysia as well as Bahrain) out of approximately 97 Islamic financial institution throughout the world. The number of IFI we study for is not even half of the overall total number of IFIs throughout the world. Thus, it cannot give a clear representative of all IFIs on regard of Ijarah. Secondly, we only manage to analyze financial statements in order to make comparisons and come into conclusion. It is not enough, to depend only on the financial statements. This is because financial statements only shows mostly the quantitative part and 17

luckily some will show part of procedure as well as method. Thus, the financial statements cannot give a full picture and comprehensive explanation on the project matter we study for. Last but not least, we only manage to interview two bank officers from two different Islamic banks (Bank Islam and AmIslamic Bank) and this is not enough to represent in comprehensive the current issues related to Ijarah.

I. CONCLUSION From this study, it can be concluded that majority of Islamic banks in Malaysia offered AITAB for ijarah financing and leasing. Compared to Bahrain banks, that used AAOIFI for accounting disclosure, Islamic banks in Malaysia followed MASB standard that is issued by Bank Negara Malaysia. Malaysia currently does not have a specific Islamic framework that can acts as a legal authority and reference for Islamic product transaction especially ijarah product. This explains why every bank in Malaysia has different ways of disclosing the ijarah financing. This shows that the IFIs don not have any standardized standard, thus making it hard to compare the performance among the IFIs. All the IFIs, irrespective whether they are in Bahrain, Malaysia or anywhere else, should have one common framework, the AAOIFI FAS 8 for example, to make the disclosures more reliable, comparable and effective. This is turn, could bring the Islamic Financing system to a higher level.


J. REFERENCES AAOIFI (1998) Financial Accounting Standard No. 8: Ijarah and Ijarah Muntahia Bittamleek, AAOIFI, Bahrain. Accounting Standard for Leases. Malaysian Accounting Standard Board (MASB 10). Abdullah, N.I., & Dasuki, A.W. (2004). A Critical Appraisal of Al- Ijarah Thumma al-Bay' (AITAB) Operation: Issues and Prospects. International Banking and Finance Conference, 7-10. Atmeh, M.A., & Serdeneh, J.A. (2012). a Proposed Model for Accounting Treatment of Ijarah. International Journal of Business and Management, 51-52. Draft of Shariah Parameter Reference 2: Ijarah Contract (SPR2). Retrieved from Mohamad Ibrahim, S.H. (2007). IFRS vs AAOIFI: The Clash of Standards? MPRA. Part 1: Shariah Contract. Shariah Resolutions in Islamic Finance. Retrieved from Sarea, A. M. (2012). The Level of Compliance with AAOIFI accounting Standards: Evidence from Bahrain. International Management Review.