From islamic-finance
Activate for: sukuk issuance, sukuk structuring, sukuk SPV, trust deed, sukuk al-ijarah, sukuk al-musharakah, sukuk al-mudarabah, sukuk al-wakala, sukuk originator, sukuk proceeds, purchase undertaking, sukuk liability, sukuk equity, FAS 33, IAS 32 sukuk, sukuk derecognition, green sukuk, sustainable sukuk, sale and leaseback sukuk.
npx claudepluginhub panaversity/agentfactory-business-plugins --plugin islamic-financeThis skill uses the workspace's default tool permissions.
| Sukuk Type | Underlying Structure | Key Accounting Question |
Activate for: sukuk investment, sukuk holding, sukuk portfolio, sukuk classification IFRS 9, SPPI sukuk, sukuk amortised cost, sukuk FVOCI, sukuk FVTPL, FAS 25, sukuk income accrual, sukuk mark-to-market, Government Investment Issue, GII, Government of Pakistan Ijarah Sukuk, GIS, sukuk ECL.
Routes banking regulatory queries to the correct product skill and jurisdiction overlay. Activate for any query involving IFRS 9, ECL, expected credit loss, Stage 1, Stage 2, Stage 3, SICR, PD, LGD, EAD, Basel III, Basel IV, CET1, RWA, capital ratio, LCR, NSFR, HQLA, ICAAP, stress test, AML, KYC, CDD, EDD, SAR, STR, sanctions, OFAC, HMT, PEP, FATF, reconciliation, nostro, suspense, FRTB, market risk RWA. Covers 7 jurisdictions across multiple regulatory regimes (PRA, ECB/EBA, Fed/OCC, APRA, MAS, CBUAE, SBP).
Advises CRE syndicators on SEC Regulation D compliance: 506(b) vs 506(c) selection, accredited investor verification, Form D filing, blue sky compliance, general solicitation rules, and pre-existing relationship docs.
Share bugs, ideas, or general feedback.
| Sukuk Type | Underlying Structure | Key Accounting Question |
|---|---|---|
| Ijarah sukuk | Sale and leaseback of assets | Does originator derecognise assets? |
| Musharakah sukuk | Joint venture / partnership | Financial liability or equity? |
| Mudarabah sukuk | Profit-sharing investment | Financial liability or equity? |
| Wakala sukuk | Agency investment management | What is the agent's balance sheet position? |
| Murabaha sukuk | Portfolio of murabaha receivables | Tradability — Shariah restriction on debt sale |
| Hybrid sukuk | Mixed pool (murabaha/ijarah/wakala) | Dominant contract determines treatment |
Structure:
The Two Critical Accounting Questions:
Question 1 — Derecognition of assets by originator: Has the originator transferred substantially all the risks and rewards of the assets?
IFRS 9 derecognition test: If YES (risks and rewards transferred): Derecognise assets, recognise proceeds as cash. If NO (risks and rewards retained): Keep assets on balance sheet (failed derecognition).
CRITICAL: If the originator has a PURCHASE UNDERTAKING to repurchase at FACE VALUE at maturity regardless of the asset's current market value, this is strong evidence that risks and rewards have NOT been transferred. The originator still bears the value risk of the underlying assets. → Failed derecognition. → Keep assets on balance sheet + recognise sukuk proceeds as a financial liability.
Most ijarah sukuk globally are accounted for as failed derecognition: Assets stay on originator's balance sheet; sukuk = financial liability.
Question 2 — Sukuk classification: financial liability or equity (IAS 32)?
If originator has a contractual obligation to: (a) Pay periodic cash distributions (rental) → creates financial liability component (b) Repay face value at maturity (purchase undertaking) → creates financial liability
IAS 32 conclusion (for most ijarah sukuk): FINANCIAL LIABILITY, not equity. Because there is a contractual obligation to deliver cash.
If the sukuk structure gives investors no contractual right to cash (returns are purely profit-contingent) → may be equity. Rare in practice.
At issuance: Dr: Cash [Sukuk proceeds] Cr: Sukuk Payable / Islamic Financing Liabilities [Face value]
(Assets remain on balance sheet — no derecognition entry required)
Periodic rental payment (= sukuk distribution): Dr: Finance Cost / Profit on Sukuk [Distribution amount] Cr: Cash [Distribution amount]
Note: In AAOIFI regime, label as "Profit on Sukuk" not "Interest on Sukuk." In IFRS regime: "Finance Cost" is acceptable; some preparers use "Sukuk Distribution."
At maturity (purchase undertaking execution): Dr: Sukuk Payable [Face value] Cr: Cash [Repurchase price per purchase undertaking]
If the sukuk is genuinely equity-based (no redemption obligation, returns are profit-contingent): → IAS 32 equity classification → Distributions are equity distributions, not finance costs → NOT deducted in calculating profit before tax
AAOIFI Shariah Standard: Purchase undertakings at face value are NOT permissible for musharakah and mudarabah sukuk (they guarantee capital, eliminating investment risk). Therefore: genuine musharakah/mudarabah sukuk should have no guaranteed redemption. In practice, many structures use exercise price at market value (not face value) for musharakah.
Proposed shift: from "asset-based" (sukuk = unsecured claim on originator) to "asset-backed" (sukuk = secured claim on specific assets, no recourse to originator).
If adopted:
Status: Extended deadlines as of 2025; under active debate. RISK FLAG for issuance advice: Always note the Standard 62 risk in advisory memos.
AAOIFI FAS 33:
IAS 32 / IFRS 7 (IFRS regime):
Green / Sustainable Sukuk (additional):