Sukuk is one of the most appropriate sources of funding to infrastructure sector; it’s an opportunity for governments and companies to raise a capital without increase the debt level. Especially that building infrastructure is a capital- intensive process, with large initial cost and low operating cost. It requires long-term finance as gestation period, for such projects is much longer than for a manufacturing plant. Infrastructure projects are characterized by non-recourse or limited recourse financing, that is, lender can only be repaid from revenue generated by the project . ( Lall & Anand, 2009)

In fact, raise fund without increase the debt it depends on the type of Sukuk, Sukuk is an Islamic financial certificate that complies with Sharia principle and laws. AAIOFI define Investment Sukuk as certificates of equal value representing undivided shares in ownership of tangible assets, usufruct and services or (in the ownership of) the assets of particular projects or special investment activity.

The definition includes two important points; the first is that Sukuk holders must have rely ownership of the asset of the specific project. The second is that the project and the Sukuk issuance procedure must be consistent with Sharia principle. Most of Sukuk issuance usually begin with same process, starting from establishing the SPV (issuer), after that the originator transfers specific assets, or the usufruct right of the assets to the SPV, then the Investors subscribe for Sukuk and pay the proceeds to SPV, therefor the SPV issue Sukuk certificates to Sukuk holder. The difference between the structures depends on the contract between the SPV and the originator (lease, wakalah,…); after that we back to the common steps which are to distribute the profit to the Sukuk holder by the SPV and redeem the Sukuk at maturity. (Biancone & Shakhatreh, 2015)

The issuer faces a big challenge regarding accounting issues in Sukuk, most of the issuance was according to English law which stated that the arrangements are wholly or partly treated in accordance with international accounting standards as a financial liability. Because Lack of Islamic accounting standard, the issuers consider the Sukuk as normal liability, which is in contrast to the concept of Sukuk, this problem can be eliminated by separate the SPV from the Originator book and use the Islamic contracts which are already existed in commercial law, like lease and partnership.

Islamic accounting standards are limited to Islamic finance institutions and the leader organization is the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI), which is an Islamic international autonomous non-for-profit corporate body that prepares accounting, auditing, governance, ethics and Sharia standards for Islamic financial institutions.

And about the companies; working group was established by The Asian-Oceania StandardSetters Group (AOSSG) to investigate the financial reporting issues which are related to Islamic finance; the objective of this Group is to facilitate AOSSG members providing input and feedback to the IASB on the adequacy and appropriateness of proposed and existing International Financial Reporting Standards (IFRSs) to Islamic financial transactions and events.

Accounting standards setters must work on insert Sukuk issuance under (IFRSs), because More than 100 countries currently subscribe to the International Financial Reporting Standards (IFRS), while most other jurisdictions permit the use of IFRS in at least some circumstances, or some countries use their national standards which are based on IFRS.

Another opportunity is Perpetual Sukuk, or Sukuk with no fixed maturity date, according to International Islamic Financial Market, they are a new addition to the arsenal of Islamic investment structures, in light of the new Basel III regulations which allows the inclusion of additional capital, apart from ordinary shares and reserves, which is perpetual in nature, into the definition of Tier-1 capital - or the ‘going concern’ or total paid up capital which is capable of absorbing losses while the institution is still solvent. Throughout the world perpetual debt is more popular than traditional equity because it is cost efficient due to its tax deductibility. Companies can shore up their capital structures by issuing permanent debt which is treated as equity under Basel III.