Fair Value Measurement and Islamic Financial Institutions: The Shariah Perspective and the Case of Saudi Banks

Talal Aljedaibi

Research output: ThesisDoctoral Thesis

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This research looks at issues associated with the application of fair value accounting in Shariah-compliant environments. It assesses the extent to which fair value, as mandated by International Financial Reporting Standards (IFRS), is acceptable for measuring and reporting on Shariah-compliant financial transactions and the assets and liabilities that arise from such transactions. It investigates how those involved in the application of IFRS in the context of Islamic banking think about and put into practice fair value measurement.
Seeking to explore the intersection between fair value and Islamic finance, the research adopts both a conceptual and an empirical perspective. From a conceptual (Shariah) perspective the thesis examines how fiqh al-mu’amalat deals with financial/monetary measurement in the context of a range of different transactions and situations. From an empirical perspective, a case study is utilised to understand the extent to which banks in Saudi Arabia use fair value measurement for the assets and liabilities disclosed in their financial statements. Interviews and other supporting methods are also used to explore the attitudes of policy-makers, regulators, preparers, auditors, academics and users towards fair value measurement in the context of banks in Saudi Arabia, and to see how these attitudes affect the behaviour of these individuals and groups.
Research shows that the Islamic perspective on accounting measurement is richer and broader than is stated in the accounting literature, and suggests that some of the specific conclusions reached by previous researchers are too narrow. The research also identifies a set of cultural and governance issues that are found to have a substantial influence on the way IFRSs are adopted in Shariah-compliant environments. The value of this research lies in the utilisation of jurisprudential evidence along with profound empirical investigations aimed at providing deeper understanding of the conjunction of international accounting measurement methods and the Islamic finance industry.
Original languageEnglish
Awarding Institution
  • Royal Holloway, University of London
  • Napier, Christopher, Supervisor
Award date1 Aug 2014
Publication statusUnpublished - 2014

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