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Islamic Banking and Islamic Accounting in Indonesia: History and Recent Development

In: Banking and Accounting Issues

Author

Listed:
  • Mahfud Sholihin
  • Dian Andari

Abstract

Islamic banks (IBs) have distinctive characteristics compared with the conventional ones. IBs only perform permissible (halal) financial transactions viewed from Islamic perspective and avoid usury (riba) and overspeculation (gharar). Consequently, IBs require special accounting to accommodate their nature. In terms of accounting, Indonesia is unique, as it has two accounting (for business organizations) standard setters: Financial Accounting Standard Board (Dewan Standar Akuntansi Keuangan-DSAK) and Sharia Financial Accounting Standard Board (Dewan Standar Akuntansi Keuangan Syariah-DSAS). This chapter discusses the development of IBs in Indonesia, a country with majority of its citizens being Muslim. Further, it explains the development of Islamic Financial Accounting Standards (IFAS) including how the standards are developed (the due processes). Finally, this chapter describes whether Islamic financial accounting standards developed in Indonesia has sufficiently fulfilled the accounting standards needed by Islamic banks in Indonesia.

Suggested Citation

  • Mahfud Sholihin & Dian Andari, 2022. "Islamic Banking and Islamic Accounting in Indonesia: History and Recent Development," Chapters, in: Nizar Mohammad Alsharari (ed.), Banking and Accounting Issues, IntechOpen.
    • Handle: RePEc:ito:pchaps:258039
    DOI: 10.5772/intechopen.103654
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    More about this item

    Keywords

    Dewan Standar Akuntansi Syariah (DSAS); Institute of Indonesia Chartered Accountants (IAI); Indonesia; Islamic accounting; Islamic banking;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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