Asset Recognition

In the context of Islamic financial accounting, an asset is recognized in the balance sheet (statement of financial position) when future econommic benefits (of that asset) will probably flow to the instituiton and the asset has a cost or value that can be measured in a reliable manner. An asset is not recognized in the balance sheet when there is an expenditure incurred with relation to that asset so that it rendered it imporable to produce such economic benefits beyong the current accounting period.