From islamic-finance
Activate for: murabaha, cost-plus financing, deferred sale, commodity murabaha, tawarruq, FAS 2, murabaha receivable, deferred murabaha income, murabaha portfolio, murabaha schedule, murabaha profit recognition, mark-up financing.
npx claudepluginhub panaversity/agentfactory-business-plugins --plugin islamic-financeThis skill uses the workspace's default tool permissions.
Murabaha is a SALE transaction, not a LOAN transaction.
Activate for: salam, forward purchase Islamic, advance payment commodity, FAS 7, agricultural finance Islamic, salam receivable, parallel salam, commodity forward Islamic, advance purchase contract.
Activate for: bank reconciliation, nostro reconciliation, suspense account, GL reconciliation, provision reconciliation, inter-company reconciliation, nostro break, unmatched item, reconciling item, MT940, MT950, MT942, aged items, reconciliation certificate, suspense clearing, four-way reconciliation, IFRS 9 provision reconciliation, settlement break, trade reconciliation, position break, GL-to-risk reconciliation. NOT for: IFRS 9 ECL model calculation (use ifrs9-ecl), capital adequacy reporting (use basel-capital), AML transaction monitoring (use aml-typologies).
Provides context on Electronic Bookkeeping Act requirements for shinkoku tax plugin: electronic bookkeeping, scanner storage, transaction data mandates, compliance status, and sole proprietor guidance.
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Murabaha is a SALE transaction, not a LOAN transaction. The bank is a merchant purchasing and reselling — not a lender charging interest.
This principle governs all accounting treatment and terminology. The jurisdiction overlay determines which label system applies in output.
Before any accounting entry, confirm the four Shariah conditions:
If any condition cannot be confirmed: FLAG for SSB review before posting entries.
Step 1 — Bank purchases asset from supplier: Dr: Murabaha Asset (inventory) [Cost Price] Cr: Cash / Payable to Supplier [Cost Price]
Step 2 — Bank sells asset to customer at mark-up (contract execution date): Dr: Murabaha Receivable [Total Selling Price = Cost + Total Mark-up] Cr: Murabaha Asset [Cost Price] Cr: Deferred Murabaha Income [Total Mark-up]
Step 3 — Periodic profit recognition (each period-end): Dr: Deferred Murabaha Income [Period allocation per effective profit rate] Cr: [Income account — label per jurisdiction overlay]
Step 4 — Customer instalment payment received: Dr: Cash [Instalment amount] Cr: Murabaha Receivable [Instalment amount]
Method: Identical mathematics to IFRS 9 effective interest rate (EIR). The rate that discounts all future cash flows to equal the initial murabaha receivable. Label this rate "effective profit rate" — NEVER "effective interest rate."
Period allocation formula: Opening Receivable x (Effective Profit Rate / Periods per Year) = Period Profit
Closing Receivable = Opening Receivable + Period Profit — Cash Instalment Received
AAOIFI regime (Bahrain, Qatar): "Murabaha Income" MFRS regime (Malaysia): "Profit from Islamic Financing" or "Islamic Financing Income" IFRS regime (UAE, Saudi Arabia, UK, Pakistan listed): "Profit from Murabaha Financing" NEVER use: "Interest Income" or "Finance Income" (generic) Use jurisdiction overlay to confirm the correct label.
AAOIFI regime: "Murabaha Receivables" — separate line, NOT under "Loans and Advances" IFRS regime: May appear under "Islamic Financing Receivables" or "Loans and Advances" with Islamic sub-classification. Jurisdiction overlay specifies exact presentation.
Deferred Murabaha Income: ALWAYS a credit balance, shown as a contra or separate liability. In AAOIFI regime: shown as a deduction from gross Murabaha Receivables, or separately. In IFRS regime: typically netted such that the carrying value = amortised cost.
AAOIFI regime: Apply AAOIFI FAS 30 (Impairment, Credit Losses and Onerous Commitments). Stage 1: 12-month expected credit loss Stage 2: Lifetime ECL (significant increase in credit risk) Stage 3: Lifetime ECL + non-accrual of murabaha income
IFRS regime: Apply IFRS 9 ECL model. SPPI test: Murabaha receivables generally pass (fixed contractual cash flows). Business model: held-to-collect → amortised cost.
IMPORTANT — SHARIAH CONSTRAINT ON DEFAULT: When a customer defaults, the bank CANNOT charge additional profit/mark-up on the overdue amount. Additional charges on overdue amounts constitute riba. Bank remedies: collateral enforcement, guarantor call, legal action only. Overdue profit that has not yet been earned is NOT accelerated on default. Only already-earned profit (released from deferred income) is a receivable.
In commodity murabaha (tawarruq), the bank purchases a commodity from a broker, sells it to the customer at a mark-up, and the customer sells to a third broker for cash.
Accounting treatment is identical to asset murabaha. Additional Shariah compliance check: confirm the two commodity sale transactions are genuinely separate (not a sham back-to-back). Some scholars object to tawarruq. If the jurisdiction's Shariah board has specific rulings on tawarruq, flag for SSB review.
Include all of the following in notes to financial statements:
AAOIFI regime: also include Shariah compliance statement confirming all murabaha contracts were executed in accordance with AAOIFI Shariah Standard No. 8.