UNIVERSITY OF HARGEISA

SCHOOL OF ECONOMICS
COURSE DESCRIPTION AND OUTLINE

Faculty School of Economics

Department Islamic Banking and Finance
Program BA in Islamic Banking and Finance
Course code To be shared with the other lecturers
Course title Accounting for Islamic financial transactions

Status Core
Level Degree
Credit hours 3Hrs
Contact hours 3Hrs/week
Pre-requisite To be shared with the other lecturers
Co-requisite Nil
Teaching Lecture, student participation, class discussions
methodology
Assessment/evaluation Continuous assessment, quiz, and midterm 40% and final exam 60%
scheme
Attendance 75% and above to sit for final exam
Semester offered four year, first semester
Instructor(s)
Course description This course is intended to introduce students to accounting concepts
for Islamic financial transactions and responsibility from shariah. The
course would show the need for Islamic accounting and the
limitations of conventional accounting. The course will enhance
students' opportunity to learn about accounting standard developed
by accounting and auditing organization for Islamic financial
institutions (AAOIFI) and understand the relevant international
 accounting and reporting standard and their implications for IFIs.

Course objectives Upon completion of this course, the student will be able to:
 The meaning of Islamic accounting and its differences with
conventional accounting
 To understand need for Islamic accounting and the limitations
of conventional accounting
 To evaluate accounting standards developed by AAOIFI and
the applicability of GAAPs and accounting standards in IFIs,
 Demonstrate the accounting for various types of Islamic
financial transactions.

References Books:
 An introduction to Islamic accounting theory and practice by Abdul
Rahim Abdul Rahman (2014)

COURSE CONTENTS:
Chapter One: Foundations of Islamic Accounting Theory
 To identify the concept of Islamic accounting
 To differentiate between Islamic accounting and conventional accounting
 To ability to read financial statement in IFIs

Chapter one : Islamic ethics and accounting

 To classify the Islamic ethics in financial market
 To clarify code of ethics in AAOIFI standard
 To Combining Islamic Ethics in Accounting Education

Chapter Three: Accounting for Islamic Deposit Account

  To Describe Principles of Wadi’ah Deposit and Accounting Implications
 To explore the Principles of Mudharabah Investment Account
 To clarify Accounting Issues on Mudarabah Investment Account
 To explain Specific Disclosure Requirements

Chapter Four: Accounting for Murabahah Financing

 To classify Murabaha to Purchase Ordered Shariah Principles.
 To describe the rules in Murabaha & MTPO Recognition & Journal Entries.
 To explore accounting for Murabaha Financing –AAOIFI FAS 5 standard
 To ability measurement of Murabaha Financing Assets & Income Recognition.

Chapter Five: Accounting for Ijarah Financing

 To explain principles of Ijarah Financing
 To discuss the conditions for the capital in Ijarah financing
 To explore accounting for Ijarah Financing –AAOIFI FAS 7 standard
 To differentiate between Financing Models of Ijarah financing

Chapter Six: Accounting for Mudarabah Financing

 To explain principles of Mudharabah Financing
 To discuss the conditions for the capital in a mudharabah financing
 To explore accounting for Mudharabah Financing –AAOIFI FAS 3 standard
 To differentiate between Financing Models of Mudarabah financing

Chapter Seven: Accounting for Musharakah Financing

 To Describe of musharakah contract and its types of musharakah
 To discuss the basic principles of musharakah financing,
 To explore accounting for Musharakah Financing -AAOIFI FAS 4 standard
 To contrast Musharakah models based on AAOIFI

Chapter Eight: Zakat Accounting for Islamic Financial Institutions

 To understand the Fundamental Principles of Zakat
 To compare between Zakat and Taxation
 To explain the Zakat Accounting on Business Wealth and Financial Assets
 To explore Accounting Standard on Zakat: AAOIFI FAS 9