This research is part of an institutional strategic research grant organized and funded by DRPM Kemenristek Dikti 2017-2018. This article aims to find out how much understanding of SME entrepreneurs in the city of Medan to the concept of Islamic financial statements. Data analysis technique using descriptive method. This research finds that the term of syariah financial report not yet well known by entrepreneur of MSME. However, the understanding of MSME entrepreneurs about the concept of shariah financial statements can be stated very well. It is characterized by the acquisition of the average number of 80.12%. Perceptions of the benefits of financial statements are quite good, but to apply it still needs to coaching MSME entrepreneurs to what is expected from Law no. 20 of 2008.