diff --git a/islamic-finance/.claude-plugin/plugin.json b/islamic-finance/.claude-plugin/plugin.json index 775befc..9f49b31 100644 --- a/islamic-finance/.claude-plugin/plugin.json +++ b/islamic-finance/.claude-plugin/plugin.json @@ -1,7 +1,7 @@ { "name": "islamic-finance", - "version": "2.0.0", - "description": "Jurisdiction-aware Islamic finance domain agent. 12 product skills (murabaha, ijarah, sukuk, takaful, musharaka, mudaraba, salam, istisna'a, zakat, shariah screening), 13 jurisdiction overlays, 4 domain commands. Covers AAOIFI, IFRS with Islamic guidance, and local standards across 20 jurisdictions.", + "version": "3.0.0", + "description": "Jurisdiction-aware Islamic finance domain agent. 1 router + 12 product skills (murabaha, ijarah, sukuk, takaful, musharaka, mudaraba, salam, istisna'a, zakat, shariah screening), 13 jurisdiction overlays, 4 domain commands. Covers AAOIFI, IFRS with Islamic guidance, and local standards across 20 jurisdictions.", "author": { "name": "Panaversity", "url": "https://github.com/panaversity" diff --git a/islamic-finance/.gitignore b/islamic-finance/.gitignore new file mode 100644 index 0000000..6e22234 --- /dev/null +++ b/islamic-finance/.gitignore @@ -0,0 +1,4 @@ +.DS_Store +__pycache__/ +*.pyc +.env diff --git a/islamic-finance/CLAUDE.md b/islamic-finance/CLAUDE.md new file mode 100644 index 0000000..08e1f8f --- /dev/null +++ b/islamic-finance/CLAUDE.md @@ -0,0 +1,29 @@ +# Islamic Finance Plugin — Development Guide + +## Identity + +v3.0.0 — Islamic Finance Domain Agent plugin for Cowork. + +## Architecture + +1 router skill + 12 product skills + 13 jurisdiction overlays + 4 commands. + +The router (`skills/islamic-finance-router/SKILL.md`) identifies jurisdiction and product from queries, then loads the correct product skill and jurisdiction overlay. Products are standalone skills that auto-activate through the router. + +## Key Files + +- `skills/islamic-finance-router/SKILL.md` — routing logic +- `skills/islamic-finance-router/references/jurisdictions/*.md` — 13 overlays +- `skills/islamic-finance-router/references/aaoifi-fas-reference.md` — AAOIFI FAS lookup +- `skills/islamic-finance-router/references/global-standards-map.md` — 20-jurisdiction map +- `commands/*.md` — 4 domain commands +- `hooks/hooks.json` — SessionStart + PostToolUse hooks +- `evals/` — golden file tests +- `scripts/validate-routing.py` — routing validation + +## Universal Rules + +- NEVER use "interest income" — use jurisdiction-appropriate label +- NEVER use "loans and advances" in AAOIFI jurisdictions +- NEVER make Shariah compliance judgments — escalate to SSB +- Every output must have GOVERNING FRAMEWORK / PRODUCT / JURISDICTION header diff --git a/islamic-finance/README.md b/islamic-finance/README.md index dca379d..b6821f8 100644 --- a/islamic-finance/README.md +++ b/islamic-finance/README.md @@ -44,7 +44,10 @@ islamic-finance/ ├── .claude-plugin/plugin.json # Plugin manifest ├── skills/ # 13 skills (auto-loaded by agent) │ ├── islamic-finance-router/ # Routes to correct product + jurisdiction -│ │ └── references/jurisdictions/ # 13 jurisdiction overlays (on-demand) +│ │ └── references/ +│ │ ├── jurisdictions/ # 13 jurisdiction overlays (on-demand) +│ │ ├── aaoifi-fas-reference.md +│ │ └── global-standards-map.md │ ├── murabaha/ # Cost-plus financing │ ├── ijarah-imb/ # Lease-to-own │ ├── musharaka-dm/ # Diminishing partnership @@ -64,51 +67,46 @@ islamic-finance/ │ └── if-zakat.md # /if-zakat — zakat computation ├── hooks/hooks.json # SessionStart + PostToolUse validation ├── scripts/validate-routing.py # 13-jurisdiction routing test harness -├── evals/ # Golden-file tests -├── exercises/ # 14 exercise data files (download as zip) -├── workflow-recipes/ # 4 operational playbooks (download as zip) -└── references/ # AAOIFI FAS reference tables +└── evals/ # Golden-file tests ``` --- ## Commands -| Command | What It Does | Example | -|---------|-------------|---------| +| Command | What It Does | Example | +| ------------- | ------------------------------------ | ---------------------------------------------------- | | `/if-journal` | Generate journal entries + schedules | `/if-journal murabaha bahrain "BHD 500K, 18mo, 18%"` | -| `/if-compare` | Compare across jurisdictions | `/if-compare murabaha bahrain malaysia` | -| `/if-screen` | Shariah compliance screening | `/if-screen sc-malaysia "company data..."` | -| `/if-zakat` | Compute zakat | `/if-zakat saudi "equity SAR 40B, ..."` | +| `/if-compare` | Compare across jurisdictions | `/if-compare murabaha bahrain malaysia` | +| `/if-screen` | Shariah compliance screening | `/if-screen sc-malaysia "company data..."` | +| `/if-zakat` | Compute zakat | `/if-zakat saudi "equity SAR 40B, ..."` | --- ## How Each Folder Maps to Chapter 20 Lessons -| Folder | Lessons | What You Do | -|--------|---------|-------------| -| `skills/murabaha/` | L04 | Process murabaha transactions, compare AAOIFI vs MFRS | -| `skills/ijarah-imb/` | L05 | Ijarah-IMB across 4 jurisdictions | -| `skills/sukuk-*/` | L06 | Sukuk from issuer and investor perspectives | -| `skills/takaful-ifrs17/` | L07 | Takaful with IFRS 17 overlay | -| `skills/islamic-finance-router/` | L08-L11 | Jurisdiction-specific deep dives | -| `skills/zakat-global/` | L12 | Zakat computation across jurisdictions | -| `skills/shariah-screening-global/` | L13 | Shariah screening methodologies | -| `exercises/` | L04-L17 | Hands-on exercise data | -| `workflow-recipes/` | L15-L16 | Operational workflow playbooks | -| `evals/` | L17-L18 | Capstone validation | +| Folder | Lessons | What You Do | +| ---------------------------------- | ------- | ----------------------------------------------------- | +| `skills/murabaha/` | L04 | Process murabaha transactions, compare AAOIFI vs MFRS | +| `skills/ijarah-imb/` | L05 | Ijarah-IMB across 4 jurisdictions | +| `skills/sukuk-*/` | L06 | Sukuk from issuer and investor perspectives | +| `skills/takaful-ifrs17/` | L07 | Takaful with IFRS 17 overlay | +| `skills/islamic-finance-router/` | L08-L11 | Jurisdiction-specific deep dives | +| `skills/zakat-global/` | L12 | Zakat computation across jurisdictions | +| `skills/shariah-screening-global/` | L13 | Shariah screening methodologies | +| `evals/` | L17-L18 | Capstone validation | --- ## Customizing for Your Jurisdiction -| Variable | Default | Your Value | -|----------|---------|-----------| -| Currency | Multi-currency (per jurisdiction) | _your currency_ | -| Primary Framework | AAOIFI / IFRS (auto-detected) | _your framework_ | -| Regulatory Body | Per jurisdiction | _your regulator_ | -| Zakat Method | Jurisdiction-specific | _your method_ | -| Screening Methodology | SC Malaysia | _your preferred methodology_ | +| Variable | Default | Your Value | +| --------------------- | --------------------------------- | ---------------------------- | +| Currency | Multi-currency (per jurisdiction) | _your currency_ | +| Primary Framework | AAOIFI / IFRS (auto-detected) | _your framework_ | +| Regulatory Body | Per jurisdiction | _your regulator_ | +| Zakat Method | Jurisdiction-specific | _your method_ | +| Screening Methodology | SC Malaysia | _your preferred methodology_ | To customize: edit the relevant jurisdiction overlay in `skills/islamic-finance-router/references/jurisdictions/` or create a new one following the same format. diff --git a/islamic-finance/exercises/ex01-murabaha-bahrain-malaysia.md b/islamic-finance/exercises/ex01-murabaha-bahrain-malaysia.md deleted file mode 100644 index f7b9416..0000000 --- a/islamic-finance/exercises/ex01-murabaha-bahrain-malaysia.md +++ /dev/null @@ -1,90 +0,0 @@ -# Exercise 1: Murabaha Income Schedule — Bahrain (AAOIFI) vs. Malaysia (MFRS/IFRS 9) - -## Scenario Profile - -| Field | Value | -| ------------------- | ---------------------------------------------------------------- | -| **Entity** | Islamic banking group with subsidiaries in Bahrain and Malaysia | -| **Product** | Murabaha financing — cost-plus sale with deferred payment | -| **Jurisdictions** | Bahrain (AAOIFI FAS 2) and Malaysia (MFRS 9 / IFRS 9 equivalent) | -| **Target Time** | 35 minutes | -| **Skills Required** | `murabaha.md`, `bahrain-aaoifi.md`, `malaysia-mfrs.md` | - ---- - -## Transaction Data - -Both subsidiaries enter identical murabaha transactions: - -| Parameter | Bahrain Entity | Malaysia Entity | -| ----------------------- | ------------------------- | ------------------------- | -| Cost to bank | BHD 500,000 | MYR 500,000 | -| Mark-up rate | 18% per annum | 18% per annum | -| Tenure | 18 months | 18 months | -| Instalment frequency | Monthly equal instalments | Monthly equal instalments | -| Total mark-up | BHD 135,000 | MYR 135,000 | -| Total amount receivable | BHD 635,000 | MYR 635,000 | -| Monthly instalment | BHD 35,277.78 | MYR 35,277.78 | - -### Derived Amounts - -| Item | Calculation | Amount | -| ---------------------------------- | ---------------------------------------------------------------- | ------------------------------------- | -| Total selling price | 500,000 + (500,000 x 18% x 1.5 years) | 635,000 | -| Deferred murabaha income (Day 1) | 135,000 | 135,000 | -| Monthly instalment | 635,000 / 18 | 35,277.78 | -| Effective profit rate (for MFRS 9) | IRR solving for 18 payments of 35,277.78 on principal of 500,000 | ~1.38% per month (~16.56% annualised) | - ---- - -## Amortisation Schedule Template — Bahrain (AAOIFI FAS 2) - -**Income label**: "Murabaha Income" (NEVER "interest income") - -| Month | Opening Murabaha Receivable | Monthly Instalment | Principal Portion | Murabaha Income (Profit Portion) | Deferred Murabaha Income Released | Closing Murabaha Receivable | -| --------- | --------------------------- | ------------------ | ----------------- | -------------------------------- | --------------------------------- | --------------------------- | -| 1 | 635,000.00 | 35,277.78 | \_\_\_ | \_\_\_ | \_\_\_ | \_\_\_ | -| 2 | \_\_\_ | 35,277.78 | \_\_\_ | \_\_\_ | \_\_\_ | \_\_\_ | -| 3 | \_\_\_ | 35,277.78 | \_\_\_ | \_\_\_ | \_\_\_ | \_\_\_ | -| ... | ... | ... | ... | ... | ... | ... | -| 18 | \_\_\_ | 35,277.78 | \_\_\_ | \_\_\_ | \_\_\_ | \_\_\_ | -| **Total** | | **635,000.00** | **500,000.00** | **135,000.00** | **135,000.00** | **0.00** | - -**AAOIFI FAS 2 note**: Profit allocation may use proportional method (straight-line over selling price) or effective rate. Confirm which method the Bahrain entity's accounting policy specifies. - ---- - -## Amortisation Schedule Template — Malaysia (MFRS 9) - -**Income label**: "Profit from Islamic Financing" (NEVER "interest income", NEVER "Murabaha Income") - -| Month | Opening Amortised Cost | Monthly Instalment | Principal Repayment | Profit from Islamic Financing (EIR method) | Closing Amortised Cost | -| --------- | ---------------------- | ------------------ | ------------------- | ------------------------------------------ | ---------------------- | -| 1 | 500,000.00 | 35,277.78 | \_\_\_ | \_\_\_ | \_\_\_ | -| 2 | \_\_\_ | 35,277.78 | \_\_\_ | \_\_\_ | \_\_\_ | -| 3 | \_\_\_ | 35,277.78 | \_\_\_ | \_\_\_ | \_\_\_ | -| ... | ... | ... | ... | ... | ... | -| 18 | \_\_\_ | 35,277.78 | \_\_\_ | \_\_\_ | \_\_\_ | -| **Total** | | **635,000.00** | **500,000.00** | **135,000.00** | **0.00** | - -**MFRS 9 note**: Uses effective profit rate (EPR) method — the constant rate applied to the amortised cost balance each period. The opening balance is the cost (500,000), not the selling price (635,000). - ---- - -## Your Task - -1. **Build the Bahrain AAOIFI schedule** — complete all cells using proportional allocation method under AAOIFI FAS 2 -2. **Build the Malaysia MFRS schedule** — complete all cells using effective profit rate method under MFRS 9 -3. **Compare the two schedules numerically** — are the total income amounts identical? Are the period-by-period allocations identical or different? -4. **Generate Month 1 journal entries** for both jurisdictions — all four entries per entity (initial recognition, instalment receipt, income recognition, deferred income release) -5. **Document every labelling difference** between the two sets of entries - ---- - -## Expected Output - -- Two completed amortisation schedules (18 rows each) -- Numerical comparison showing whether total income is identical (it should be) and whether period allocation differs (it may, depending on method) -- 8 journal entries total (4 per jurisdiction) -- A summary paragraph explaining: same economics, different labels, different presentation, different disclosure requirements -- Identification that AAOIFI FAS 2 proportional method and MFRS 9 effective rate method may produce slightly different period allocations but identical total income diff --git a/islamic-finance/exercises/ex02-ijarah-four-jurisdictions.md b/islamic-finance/exercises/ex02-ijarah-four-jurisdictions.md deleted file mode 100644 index b9c9956..0000000 --- a/islamic-finance/exercises/ex02-ijarah-four-jurisdictions.md +++ /dev/null @@ -1,108 +0,0 @@ -# Exercise 2: Ijarah Accounting Across Four Jurisdictions - -## Scenario Profile - -| Field | Value | -| ------------------- | ------------------------------------------------------------------------------------- | -| **Entity** | Islamic bank providing equipment financing via IMB (Ijarah Muntahia Bittamleek) | -| **Product** | Ijarah / IMB — operating lease with ownership transfer at end | -| **Jurisdictions** | Bahrain (AAOIFI FAS 32), Malaysia (MFRS 16), UAE (IFRS 16), UK (IFRS 16) | -| **Target Time** | 50 minutes | -| **Skills Required** | `ijarah-imb.md`, `bahrain-aaoifi.md`, `malaysia-mfrs.md`, `uae-ifrs.md`, `uk-ifrs.md` | - ---- - -## Transaction Data - -Identical transaction in all four jurisdictions: - -| Parameter | Value | -| ------------------------- | ------------------------------------- | -| Asset cost | $2,000,000 | -| Monthly rental | $40,000 | -| Implied annual rate | ~18% p.a. | -| Lease tenure | 5 years (60 months) | -| Asset useful life | 10 years | -| Ownership transfer | At end of lease, by nominal sale ($1) | -| Total rentals over tenure | $2,400,000 | - -### Key Financial Derivations - -| Item | Value | -| -------------------------------------------------- | ----------- | -| Total rental income (5 years) | $2,400,000 | -| Annual rental income | $480,000 | -| Annual depreciation (10-year life) | $200,000 | -| Annual profit (AAOIFI: rental minus depreciation) | $280,000 | -| Implicit rate in lease | ~18.0% p.a. | -| Present value of lease payments (at implicit rate) | $2,000,000 | - ---- - -## Jurisdiction-Specific Parameters - -### Bahrain — AAOIFI FAS 32 (Lessor) - -| Item | Treatment | -| ------------------- | ---------------------------------------------------------------------- | -| Governing standard | AAOIFI FAS 32 (Ijarah and Ijarah Muntahia Bittamleek) | -| Asset recognition | Bank recognises ijarah asset at cost ($2,000,000) on its balance sheet | -| Depreciation | Over asset useful life (10 years), NOT the lease term (5 years) | -| Annual depreciation | $200,000 | -| Income recognition | Rental income recognised monthly: $40,000/month | -| Annual profit | $480,000 rental - $200,000 depreciation = $280,000 | -| Balance sheet label | "Ijarah Assets" (NEVER "Property, Plant and Equipment") | -| Income label | "Income from Ijarah" (NEVER "Lease income" or "Rental income") | - -### Malaysia — MFRS 16 (Lessor) - -| Item | Treatment | -| ------------------------------- | ------------------------------------------------------------------------ | -| Governing standard | MFRS 16 (equivalent to IFRS 16) | -| Classification test | Does this qualify as a finance lease? Transfer of ownership at end = YES | -| If finance lease | Derecognise asset, recognise net investment in lease | -| Net investment in lease (Day 1) | $2,000,000 (PV of lease payments + residual) | -| Income recognition | Effective profit rate method on net investment balance | -| Income label | "Profit from Islamic Financing" | - -### UAE — IFRS 16 (Lessor) - -| Item | Treatment | -| ------------------- | ------------------------------------------------------------------------ | -| Governing standard | IFRS 16 | -| Classification test | Same as Malaysia — finance lease | -| Treatment | Same as MFRS 16 | -| Income label | "Financing Income" or "Income from Ijarah Financing" (per entity policy) | -| Regulator | CBUAE | - -### UK — IFRS 16 (Lessor) - -| Item | Treatment | -| ------------------- | ------------------------------------------------------------------------------------------- | -| Governing standard | IFRS 16 / FRS 101 | -| Classification test | Same — finance lease | -| Treatment | Same as IFRS 16 | -| Income label | "Financing Income" | -| Tax treatment | HMRC Alternative Finance Arrangements — treated as equivalent to conventional lease for tax | -| Regulator | PRA/FCA | - ---- - -## Your Task - -1. **Bahrain (AAOIFI FAS 32)**: Build the 5-year lessor schedule — annual rows showing: ijarah asset carrying value, depreciation, rental income, net profit -2. **Malaysia (MFRS 16)**: Build the 5-year finance lease schedule — monthly/annual rows showing: net investment in lease, rental received, profit recognised (effective rate), principal reduction -3. **UAE (IFRS 16)**: Build the same finance lease schedule as Malaysia (numbers identical, labels may differ) -4. **UK (IFRS 16)**: Build the same finance lease schedule, plus draft the HMRC tax note explaining Alternative Finance Arrangements treatment -5. **Comparison table**: Side-by-side annual P&L impact for all four jurisdictions showing income recognised per year - ---- - -## Expected Output - -- 4 completed schedules (one per jurisdiction) -- Bahrain schedule will show DIFFERENT annual profit pattern than the other three (because AAOIFI keeps the asset on balance sheet with straight-line depreciation) -- Malaysia/UAE/UK schedules will show SAME numbers (all apply IFRS 16 finance lease) but different labels -- Comparison table showing Year 1-5 income per jurisdiction -- Explanation of why Bahrain produces a flat annual profit while IFRS jurisdictions produce declining profit (front-loaded under effective rate method) -- UK HMRC note on tax equivalence diff --git a/islamic-finance/exercises/ex03-gcc-sukuk-issuance.md b/islamic-finance/exercises/ex03-gcc-sukuk-issuance.md deleted file mode 100644 index 08c4ef3..0000000 --- a/islamic-finance/exercises/ex03-gcc-sukuk-issuance.md +++ /dev/null @@ -1,105 +0,0 @@ -# Exercise 3: GCC Sukuk Issuance — Multi-Jurisdiction Accounting - -## Scenario Profile - -| Field | Value | -| --------------------- | ------------------------------------------------------------------------------------------------------------ | -| **Issuer** | Abu Dhabi National Energy Company (ADNEC) | -| **Product** | $500M 5-year ijarah sukuk | -| **Underlying Assets** | UAE power generation infrastructure leased to ADNEC | -| **Distribution Rate** | 5.25% p.a., semi-annual | -| **Listing** | Nasdaq Dubai and London Stock Exchange | -| **Jurisdictions** | UAE (issuer), Bahrain (investor), Malaysia (investor), UK (investor) | -| **Target Time** | 60 minutes | -| **Skills Required** | `sukuk-issuer.md`, `sukuk-investor.md`, `bahrain-aaoifi.md`, `malaysia-mfrs.md`, `uae-ifrs.md`, `uk-ifrs.md` | - ---- - -## Sukuk Structure Data - -### Issuance Details - -| Parameter | Value | -| ----------------------------- | --------------------------------------------------------------- | -| Total issuance | $500,000,000 | -| Tenor | 5 years | -| Distribution rate | 5.25% p.a. | -| Distribution frequency | Semi-annual (June 30 and December 31) | -| Semi-annual distribution | $13,125,000 | -| Total distributions over life | $131,250,000 | -| Structure | Ijarah — assets leased from SPV to ADNEC | -| SPV | ADNEC Sukuk Limited (Cayman Islands) | -| Purchase undertaking | ADNEC undertakes to repurchase assets at face value at maturity | -| Governing law | English law | - -### Tranche Structure - -| Tranche | Amount | Distribution Rate | SPPI Test Consideration | -| ------------------------ | ------------ | ----------------- | ---------------------------------------------------------- | -| Tranche A (Senior) | $300,000,000 | 5.00% p.a. fixed | Fixed rental — straightforward SPPI pass | -| Tranche B (Mezzanine) | $150,000,000 | 5.50% p.a. fixed | Fixed rental — SPPI pass | -| Tranche C (Subordinated) | $50,000,000 | 6.25% p.a. fixed | Higher return for subordination — SPPI assessment required | - -### SPPI Test Data - -| Factor | Assessment | -| ------------------------- | -------------------------------------------------------- | -| Cash flows | Fixed periodic rental + return of face value at maturity | -| Underlying assets | Power generation infrastructure — tangible, identifiable | -| Purchase undertaking | At face value — no equity-like upside/downside | -| Subordination (Tranche C) | Absorbs first losses — potential SPPI complication | -| Credit risk | ADNEC is majority government-owned (Abu Dhabi) | - ---- - -## Investor Profiles - -### Bahrain Investor — Gulf Finance House (AAOIFI) - -| Item | Value | -| ------------------ | ------------------------------------------------------------------- | -| Entity | Gulf Finance House BSC | -| Holding | $50,000,000 (Tranche A) | -| Framework | AAOIFI FAS 25 (Investment in Sukuk, Shares and Similar Instruments) | -| Business model | Hold to collect | -| Semi-annual income | $1,250,000 | - -### Malaysia Investor — Employees Provident Fund (MFRS) - -| Item | Value | -| ------------------ | ---------------------------------------------------------- | -| Entity | EPF Shariah Savings Portfolio | -| Holding | $75,000,000 (Tranche A: $50M, Tranche B: $25M) | -| Framework | MFRS 9 | -| Business model | Hold to collect | -| Semi-annual income | $1,250,000 (Tranche A) + $687,500 (Tranche B) = $1,937,500 | - -### UK Investor — Legal & General Islamic Fund (IFRS) - -| Item | Value | -| ------------------ | -------------------------------- | -| Entity | L&G Shariah-compliant fund | -| Holding | $25,000,000 (Tranche B) | -| Framework | IFRS 9 / FRS 101 | -| Business model | Hold to collect and sell (FVOCI) | -| Semi-annual income | $687,500 | - ---- - -## Your Task - -1. **UAE issuer accounting (IFRS)**: Determine whether ADNEC derecognises the power assets. Analyse the purchase undertaking's impact on derecognition. Classify the sukuk (financial liability vs. equity under IAS 32). Generate initial recognition journal entry. -2. **Bahrain investor (AAOIFI FAS 25)**: Classify the $50M holding. Generate entries for: initial recognition, semi-annual income, year-end measurement. -3. **Malaysia investor (MFRS 9)**: Apply business model and SPPI tests to both tranches. Classify at amortised cost. Generate entries for initial recognition and semi-annual income for both tranches. -4. **UK investor (IFRS 9)**: Apply FVOCI classification. Generate entries including OCI mark-to-market if market yields move +50bps after issuance. -5. **Cross-jurisdiction comparison**: Build a table showing how the same sukuk certificate is accounted for differently by each investor depending on their jurisdiction and framework. - ---- - -## Expected Output - -- Issuer journal entries (initial recognition of $500M proceeds, semi-annual distribution, maturity repurchase) -- 3 sets of investor journal entries (Bahrain AAOIFI, Malaysia MFRS, UK IFRS) -- SPPI test analysis for each tranche (noting Tranche C subordination risk) -- Comparison table: classification, measurement basis, income label, and balance sheet presentation per jurisdiction -- Discussion of why the purchase undertaking at face value means the issuer likely does NOT derecognise the assets (substance over form) diff --git a/islamic-finance/exercises/ex04-takaful-ifrs17.md b/islamic-finance/exercises/ex04-takaful-ifrs17.md deleted file mode 100644 index 3630523..0000000 --- a/islamic-finance/exercises/ex04-takaful-ifrs17.md +++ /dev/null @@ -1,101 +0,0 @@ -# Exercise 4: Global Takaful Operator — IFRS 17 and Wakala Model - -## Scenario Profile - -| Field | Value | -| ------------------- | -------------------------------------------------------------------- | -| **Entity** | Etiqa Takaful Berhad (Malaysia) — with UAE and UK comparators | -| **Product** | Family takaful (life) and general takaful under wakala model | -| **Jurisdictions** | Malaysia (MFRS 17), UAE (IFRS 17), UK (IFRS 17) | -| **Target Time** | 50 minutes | -| **Skills Required** | `takaful-ifrs17.md`, `malaysia-mfrs.md`, `uae-ifrs.md`, `uk-ifrs.md` | - ---- - -## Operator Financial Data — Malaysia (Etiqa Takaful Berhad) - -### General Takaful Book - -| Line Item | Amount (MYR millions) | -| --------------------------------------- | --------------------- | -| Gross written contributions | 850 | -| Wakala fee (30% of contributions) | 255 | -| Claims incurred | 410 | -| Retakaful (reinsurance) ceded | 125 | -| Investment income on Participants' Fund | 68 | -| Management expenses (operator) | 180 | -| Participants' Fund opening balance | 1,200 | - -### Family Takaful Book - -| Line Item | Amount (MYR millions) | -| --------------------------------------- | --------------------- | -| Gross written contributions | 1,450 | -| Wakala fee (25% of contributions) | 362.5 | -| Claims and benefits paid | 780 | -| Retakaful ceded | 210 | -| Investment income on Participants' Fund | 195 | -| Participants' Fund opening balance | 4,800 | - -### Wakala Model Key Parameters - -| Parameter | Value | -| ------------------------- | -------------------------------------------- | -| Wakala fee rate (general) | 30% of gross contributions | -| Wakala fee rate (family) | 25% of gross contributions | -| Surplus sharing (general) | 50% to participants, 50% retained in fund | -| Qard hasan facility | MYR 200M available from shareholder fund | -| Qard hasan trigger | Participants' Fund deficit exceeding MYR 50M | - ---- - -## Qard Hasan Scenario - -| Event | Data | -| ------------------------------------------- | --------------------------------------------------- | -| Catastrophe claims (Q3) | MYR 320M additional claims in general takaful | -| Participants' Fund balance post-catastrophe | Deficit of MYR 85M | -| Qard hasan drawn | MYR 85M from shareholder fund | -| Repayment terms | From future surpluses, no fixed timeline, no profit | - ---- - -## UAE Comparator — Emirates Islamic Takaful - -| Line Item | Amount (AED millions) | -| ---------------------------------- | ---------------------------- | -| Gross written contributions | 620 | -| Wakala fee (28%) | 173.6 | -| Claims incurred | 295 | -| Participants' Fund opening balance | 480 | -| Regulatory framework | IFRS 17 as required by CBUAE | - -## UK Comparator — Salaam Halal Insurance (hypothetical) - -| Line Item | Amount (GBP millions) | -| ---------------------------------- | ------------------------- | -| Gross written contributions | 45 | -| Wakala fee (32%) | 14.4 | -| Claims incurred | 22 | -| Participants' Fund opening balance | 38 | -| Regulatory framework | IFRS 17 / PRA Solvency II | - ---- - -## Your Task - -1. **IFRS 17 fundamental question**: Does the takaful operator have insurance contracts on its own books? Is the Participants' Fund subject to IFRS 17? What is BNM Malaysia's ruling? -2. **Malaysia (MFRS 17)**: Build Etiqa's income statement showing: (a) Operator's own income statement (wakala fee only); (b) Participants' Fund statement (contributions, claims, retakaful, investment income) -3. **Qard hasan accounting**: When the operator provides MYR 85M qard hasan to cover the fund deficit: journal entries in operator's books AND in Participants' Fund; classification of the receivable (is it an asset or is recovery uncertain?); disclosure requirements -4. **UAE comparison**: How does the UAE takaful operator present its IFRS 17 statements WITHOUT BNM-level guidance? What judgments must the UAE entity make that Malaysia has pre-determined? -5. **UK comparison**: How does PRA Solvency II interact with IFRS 17 for a UK takaful operator? Is the Participants' Fund risk-bearing capital from a PRA perspective? - ---- - -## Expected Output - -- Two-panel income statement for Etiqa (Operator panel + Participants' Fund panel) -- Qard hasan journal entries (4 entries: draw-down in operator books, receipt in fund books, partial repayment from surplus, year-end assessment) -- Comparison table: Malaysia vs. UAE vs. UK treatment of the SAME wakala model -- Discussion of the core IFRS 17 tension: conventional insurance assumes the insurer bears risk; takaful assumes participants collectively bear risk — and how each jurisdiction resolves this -- Note on why the Participants' Fund balance is NOT operator equity diff --git a/islamic-finance/exercises/ex05-malaysia-corporate-sukuk.md b/islamic-finance/exercises/ex05-malaysia-corporate-sukuk.md deleted file mode 100644 index 0c17d7e..0000000 --- a/islamic-finance/exercises/ex05-malaysia-corporate-sukuk.md +++ /dev/null @@ -1,104 +0,0 @@ -# Exercise 5: Malaysia Corporate Sukuk — TNB Sukuk Musharakah - -## Scenario Profile - -| Field | Value | -| ------------------- | ----------------------------------------------------------------- | -| **Issuer** | Tenaga Nasional Berhad (TNB) — Malaysia's national energy utility | -| **Product** | RM5 billion sukuk musharakah | -| **Jurisdiction** | Malaysia (MFRS 9, SC Malaysia SRI Sukuk Framework) | -| **Target Time** | 55 minutes | -| **Skills Required** | `sukuk-issuer.md`, `sukuk-investor.md`, `malaysia-mfrs.md` | - ---- - -## Issuance Data - -| Parameter | Value | -| ----------------------------- | ------------------------------------------------- | -| Total issuance | RM 5,000,000,000 | -| Structure | Sukuk musharakah — joint venture in energy assets | -| Tenor | 10 years | -| Distribution rate | 4.75% p.a. | -| Distribution frequency | Quarterly | -| Quarterly distribution | RM 59,375,000 | -| Total distributions over life | RM 2,375,000,000 | -| Listing | Bursa Malaysia | -| Trustee | CIMB Trustee Berhad | -| Shariah adviser | CIMB Islamic Bank Shariah Committee | -| Governing law | Malaysian law | - -### Distribution Rate Detail - -| Year | Distribution Rate | Quarterly Amount (RM millions) | -| ---------- | ----------------- | ------------------------------ | -| Years 1-3 | 4.50% | 56.250 | -| Years 4-7 | 4.75% | 59.375 | -| Years 8-10 | 5.00% | 62.500 | - ---- - -## EPF Investor Position - -| Parameter | Value | -| ----------------------- | ------------------------------------------------------------ | -| Investor | Employees Provident Fund (EPF) Shariah Savings | -| Holding | RM 500,000,000 (10% of issuance) | -| Framework | MFRS 9 | -| Business model | Hold to collect contractual cash flows | -| SPPI test consideration | Fixed periodic distributions + return of capital at maturity | -| Classification | Amortised cost (subject to SPPI pass) | -| Effective profit rate | Weighted average across step-up tranches | - -### EPF Quarterly Income Schedule (Year 1) - -| Quarter | Opening Carrying Value | Distribution Received | Profit Recognised (EPR) | Amortisation Adjustment | Closing Carrying Value | -| ------- | ---------------------- | --------------------- | ----------------------- | ----------------------- | ---------------------- | -| Q1 | 500,000,000 | \_\_\_ | \_\_\_ | \_\_\_ | \_\_\_ | -| Q2 | \_\_\_ | \_\_\_ | \_\_\_ | \_\_\_ | \_\_\_ | -| Q3 | \_\_\_ | \_\_\_ | \_\_\_ | \_\_\_ | \_\_\_ | -| Q4 | \_\_\_ | \_\_\_ | \_\_\_ | \_\_\_ | \_\_\_ | - ---- - -## SRI Sukuk Framework Data - -| Parameter | Value | -| ------------------------------ | ------------------------------------------------------------------- | -| Green designation | TNB designates as Green Sukuk under SC Malaysia SRI Sukuk Framework | -| Eligible green projects | Solar generation assets (450 MW capacity) | -| Use of proceeds allocation | 70% solar, 20% grid modernisation, 10% general working capital | -| Annual impact reporting | Required — energy generated (GWh), CO2 avoided (tonnes) | -| External reviewer | RAM Sustainability | -| Green sukuk premium (greenium) | Estimated 5-10 bps tighter than comparable non-green sukuk | - -### SC Malaysia SRI Requirements - -| Requirement | Detail | -| ------------------------ | -------------------------------------------------------------------------- | -| Eligible SRI projects | Renewable energy, energy efficiency, clean transportation, green buildings | -| Use of proceeds tracking | Dedicated account or equivalent tracking mechanism | -| Annual reporting | Use of proceeds report + impact report | -| External review | Second party opinion or Green Bond/Sukuk Framework assessment | -| Ongoing compliance | Annual confirmation of SRI eligibility | - ---- - -## Your Task - -1. **Issuer accounting (MFRS 9)**: Account for the RM 5B sukuk musharakah issuance — classification as financial liability, initial recognition at fair value less transaction costs, quarterly distribution entries -2. **Quarterly distribution accounting**: Generate Year 1 quarterly entries showing distribution as finance cost vs. equity distribution analysis -3. **EPF investor accounting (MFRS 9)**: Apply business model and SPPI tests. Calculate effective profit rate accounting for the step-up distribution structure. Generate initial recognition and first quarterly income entries -4. **Green sukuk overlay**: Draft the Use of Proceeds section for the offering circular. Identify additional disclosures required under SC Malaysia SRI Sukuk Framework. Assess whether the Green designation affects accounting recognition or measurement -5. **SC Malaysia regulatory submission**: Draft the accounting and financial disclosure section of the Information Memorandum covering: accounting policies, debt coverage ratios, MFRS 9 classification rationale, accounting treatment risks, Shariah compliance summary - ---- - -## Expected Output - -- Issuer journal entries: initial recognition, quarterly distribution (4 entries), year-end -- EPF investor journal entries: initial recognition, quarterly income (4 entries) -- Effective profit rate calculation showing how the step-up structure is reflected under amortised cost -- Green sukuk Use of Proceeds section (structured for SC Malaysia submission) -- Information Memorandum accounting disclosure section -- Note explaining that the Green designation adds disclosure obligations but does NOT change MFRS 9 recognition or measurement diff --git a/islamic-finance/exercises/ex06-saudi-ifi-alinma.md b/islamic-finance/exercises/ex06-saudi-ifi-alinma.md deleted file mode 100644 index bb24acc..0000000 --- a/islamic-finance/exercises/ex06-saudi-ifi-alinma.md +++ /dev/null @@ -1,129 +0,0 @@ -# Exercise 6: Saudi Arabia — Alinma Bank IFI Review - -## Scenario Profile - -| Field | Value | -| ------------------- | -------------------------------------------------------------------- | -| **Entity** | Alinma Bank (Saudi Arabia) — benchmarked against Al Rajhi Bank | -| **Domain** | Islamic Accounting — Saudi Arabia (IFRS + ZATCA zakat + Vision 2030) | -| **Jurisdiction** | Saudi Arabia (IFRS as adopted in KSA, ZATCA, SAMA) | -| **Target Time** | 55 minutes | -| **Skills Required** | `murabaha.md`, `saudi-ifrs.md`, `zakat-global.md` | - ---- - -## Alinma Bank Financial Data - -### Balance Sheet Extract (SAR millions) - -| Item | Amount | -| ----------------------------- | ------- | -| Share capital | 20,000 | -| Statutory reserves | 4,500 | -| Retained earnings | 3,200 | -| Total equity | 27,700 | -| Fixed assets (net) | 1,800 | -| Long-term sukuk investments | 5,000 | -| Murabaha receivables (net) | 48,000 | -| Home finance (DM) receivables | 32,000 | -| Other Islamic financing | 8,500 | -| Total Islamic financing | 88,500 | -| Customer deposits | 72,000 | -| Total assets | 125,000 | - -### Murabaha Portfolio Breakdown - -| Tenor Bucket | Outstanding (SAR millions) | Weighted Average Rate | NPF Ratio | -| ---------------- | -------------------------- | --------------------- | --------- | -| Less than 1 year | 18,000 | 6.8% | 1.2% | -| 1-3 years | 20,000 | 7.2% | 2.1% | -| Over 3 years | 10,000 | 7.8% | 3.5% | -| **Total** | **48,000** | **7.2%** | **2.0%** | - -### DM Home Finance Portfolio - -| Year of Origination | Outstanding (SAR millions) | Monthly Rental Yield | Remaining Tenor | -| ------------------- | -------------------------- | --------------------- | --------------- | -| 2020 | 8,000 | 5.2% | 22 years | -| 2021 | 7,500 | 4.8% | 23 years | -| 2022 | 6,500 | 5.5% | 24 years | -| 2023 | 5,500 | 6.1% | 25 years | -| 2024 | 4,500 | 6.5% | 26 years | -| **Total** | **32,000** | **5.6% weighted avg** | | - ---- - -## ZATCA Zakat Computation Data - -### Zakat Base Items - -| Item | Amount (SAR millions) | Include/Deduct | -| --------------------------- | --------------------- | -------------- | -| Share capital | 20,000 | Include | -| Statutory reserves | 4,500 | Include | -| Retained earnings | 3,200 | Include | -| Provisions (general) | 1,200 | Include | -| **Gross zakat base** | **28,900** | | -| Fixed assets (net) | (1,800) | Deduct | -| Long-term sukuk investments | (5,000) | Deduct | -| **Net ZATCA zakat base** | **22,100** | | -| Zakat rate | 2.5% | | -| **ZATCA zakat obligation** | **552.5** | | - ---- - -## PIF Sukuk Investment Data - -| Parameter | Value | -| --------------------- | ------------------------------------------ | -| Holding | SAR 2,000,000,000 face value | -| Structure | PIF sukuk (wakala structure) | -| Distribution rate | 4.25% p.a. | -| Tenor | 7 years (3 remaining) | -| IFRS 9 classification | FVOCI (hold to collect and sell) | -| Current fair value | SAR 1,920,000,000 (yield +100bps scenario) | - -### PIF Sukuk Mark-to-Market Scenario - -| Scenario | Market Yield Change | Fair Value Impact | OCI Impact (SAR millions) | -| ---------- | ------------------- | ----------------- | ------------------------- | -| Base case | 0 bps | 2,000 | 0 | -| Yield rise | +100 bps | \_\_\_ | \_\_\_ | -| Yield fall | -50 bps | \_\_\_ | \_\_\_ | - -**Duration**: ~2.8 years (modified duration for remaining 3-year tenor) - -**Impact calculation**: Face value x modified duration x yield change = approximate FV change - ---- - -## Saudi Electricity Green Sukuk Data - -| Parameter | Value | -| --------------------------- | ------------------------------------------------------- | -| Alinma holding | SAR 500,000,000 | -| Structure | Green sukuk — funding renewable energy projects | -| Distribution rate | 4.50% p.a. | -| Green framework | Saudi Electricity Company Sustainable Finance Framework | -| ESG disclosure requirements | SAMA encouraged (not yet mandatory) | - ---- - -## Your Task - -1. **IFRS murabaha benchmarking**: How does Al Rajhi classify and present murabaha receivables? Apply those benchmark practices to Alinma's accounting policy review -2. **ZATCA zakat computation**: Calculate the full ZATCA zakat base using the formula above. Generate the journal entry. Note the difference between ZATCA zakat and AAOIFI Governance Standard 9 zakat -3. **PIF sukuk accounting**: Classify under IFRS 9 (business model + SPPI). Generate entries for initial recognition and quarterly income. Calculate mark-to-market OCI impact under the +100bps yield rise scenario -4. **Saudi Electricity green sukuk**: Draft the accounting policy note and IFRS 7 disclosures for the green sukuk holding. Note SAMA ESG disclosure guidance -5. **Management accounts**: Produce monthly management accounts with: murabaha income by tenor, DM income trend, sukuk portfolio income and mark-to-market, zakat accrual, key ratios (Net Financing Margin, NPF ratio, Coverage ratio) - ---- - -## Expected Output - -- ZATCA zakat calculation worksheet with journal entry (Dr Zakat Expense SAR 552.5M, Cr Zakat Payable SAR 552.5M) -- PIF sukuk OCI impact calculation (~SAR 56M loss for +100bps on 2.8 duration) -- Comparison note: ZATCA formula vs. AAOIFI Hanafi methodology -- Monthly management accounts template formatted for Saudi board -- Green sukuk accounting policy note -- All figures in SAR, all labels Saudi IFRS-compliant diff --git a/islamic-finance/exercises/ex07-uk-al-rayan-bank.md b/islamic-finance/exercises/ex07-uk-al-rayan-bank.md deleted file mode 100644 index 3f3f3f5..0000000 --- a/islamic-finance/exercises/ex07-uk-al-rayan-bank.md +++ /dev/null @@ -1,148 +0,0 @@ -# Exercise 7: UK Islamic Bank — Al Rayan Bank - -## Scenario Profile - -| Field | Value | -| ------------------- | ------------------------------------------------------------------------------- | -| **Entity** | Al Rayan Bank plc (UK) — largest UK Islamic bank | -| **Products** | DM home finance, mudaraba savings, murabaha business finance, ijarah buy-to-let | -| **Jurisdiction** | UK (IFRS / FRS 101, PRA/FCA, HMRC) | -| **Target Time** | 50 minutes | -| **Skills Required** | `musharaka-dm.md`, `murabaha.md`, `uk-ifrs.md` | - ---- - -## DM Home Finance Portfolio - -### Portfolio Summary (GBP) - -| Parameter | Value | -| ------------------------------------ | ---------------------------------- | -| Total portfolio | GBP 200,000,000 | -| Number of facilities | 850 | -| Average facility size | GBP 235,294 | -| Average bank share (Day 1) | 80% of property value | -| Average monthly rental on bank share | Approximately 4.2% p.a. equivalent | -| Average monthly equity purchase | GBP 1,000 per facility | - -### Sample Transaction - -| Parameter | Value | -| ------------------------------------- | ----------------- | -| Property value | GBP 625,000 | -| Bank's initial share | GBP 500,000 (80%) | -| Customer's initial share | GBP 125,000 (20%) | -| Monthly rental on bank's share | GBP 1,750 | -| Monthly equity purchase by customer | GBP 1,000 | -| Implied annual rate on bank's capital | ~4.2% p.a. | -| Expected buy-out period | ~25 years | - -### DM Portfolio Aging - -| Origination Year | Outstanding Bank Share (GBP millions) | Rental Yield | Remaining Units | -| ---------------- | ------------------------------------- | ----------------- | --------------- | -| 2019 | 35 | 3.8% | 140 | -| 2020 | 28 | 3.5% | 115 | -| 2021 | 42 | 4.0% | 175 | -| 2022 | 38 | 4.5% | 160 | -| 2023 | 32 | 4.8% | 135 | -| 2024 | 25 | 5.2% | 125 | -| **Total** | **200** | **4.2% weighted** | **850** | - ---- - -## HMRC Tax Data - -### Finance Act 2005 — Alternative Finance Arrangements - -| Conventional Equivalent | Islamic Structure | HMRC Treatment | -| ----------------------------- | -------------------- | -------------------------------------------------------------- | -| Mortgage interest (bank) | DM rental income | Treated as interest equivalent for tax | -| Mortgage interest (customer) | DM rental payments | Tax-deductible as mortgage interest equivalent | -| Mortgage principal (customer) | DM equity purchase | Capital repayment — not tax-deductible | -| SDLT on property purchase | SDLT on DM structure | Single SDLT charge (not double — Finance Act 2003 s71A relief) | - -### Customer Tax Position - -| Item | Annual Amount (GBP) | Tax Treatment | -| ------------------------ | ----------------------- | ----------------------------------- | -| Rental payments to bank | 21,000 | Deductible as finance cost (if BTL) | -| Equity purchase payments | 12,000 | Capital — not deductible | -| Total payments | 33,000 | | -| SDLT on initial purchase | 21,250 (on GBP 625,000) | Single charge, not double | - ---- - -## Construction Finance Scenario - -### Client: UK Property Developer - -| Parameter | Value | -| ---------------------------------- | --------------------------------------------- | -| Client | Meridian Developments Ltd | -| Project | 45-unit residential development, South London | -| Total development cost | GBP 8,000,000 | -| Al Rayan facility | DM construction facility | -| Bank contribution | GBP 6,000,000 (75%) | -| Developer contribution | GBP 2,000,000 (25%) | -| Construction period | 24 months | -| Post-completion buy-out | 5 years | -| Developer role during construction | Agent (wakeel) for the bank | - -### Construction Draw-Down Schedule - -| Phase | Month | Draw-Down (GBP) | Cumulative | Bank Share | -| ---------------- | ----- | --------------- | ---------- | ---------- | -| Land acquisition | 0 | 2,500,000 | 2,500,000 | 1,875,000 | -| Foundation | 1-4 | 1,200,000 | 3,700,000 | 2,775,000 | -| Structure | 5-12 | 2,800,000 | 6,500,000 | 4,875,000 | -| Fit-out | 13-20 | 1,200,000 | 7,700,000 | 5,775,000 | -| Completion | 21-24 | 300,000 | 8,000,000 | 6,000,000 | - ---- - -## PRA Capital Ratios - -### Al Rayan Bank Regulatory Capital - -| Item | Amount (GBP millions) | Ratio | -| --------------------------- | --------------------- | ----- | -| CET1 Capital | 180 | 14.4% | -| Tier 1 Capital | 180 | 14.4% | -| Total Capital | 195 | 15.6% | -| Risk-Weighted Assets (RWA) | 1,250 | | -| Minimum CET1 requirement | 4.5% | 56.25 | -| Capital conservation buffer | 2.5% | 31.25 | -| Total CET1 requirement | 7.0% | 87.50 | -| CET1 surplus | | 92.50 | - -### RWA for DM Home Finance - -| Category | Risk Weight | Application | -| -------------------------------- | ----------- | ------------------------------------ | -| Residential mortgage (LTV < 80%) | 35% | Standard PRA residential mortgage RW | -| Residential mortgage (LTV > 80%) | 75% | Higher RW for higher LTV | -| Construction phase exposure | 150% | Speculative development | -| Post-completion (occupied) | 35% | Once completed and occupied | - ---- - -## Your Task - -1. **DM home finance IFRS 9 treatment**: Apply business model and SPPI tests. Is this a financial instrument (loan in substance) or a property co-ownership? Generate Month 1 journal entries under IFRS 9 -2. **HMRC tax treatment**: Explain how HMRC characterises rental income and equity payments for: (a) the bank's tax computation; (b) the customer's tax position. Address SDLT relief for Islamic mortgages -3. **Construction finance**: Classify the DM construction facility — istisna'a, construction DM, or wakala? Account for the construction-period investment under IFRS 9. When does income recognition begin — draw-down or completion? -4. **PRA regulatory capital**: Calculate RWA for the DM home finance portfolio. Does the Shariah structure change the RWA classification vs. conventional mortgage? Identify PRA returns required -5. **Client advisory report**: Draft comparison of conventional vs. Islamic construction finance covering: cost comparison, HMRC treatment, IFRS 16 lessee accounting, Shariah compliance certification - ---- - -## Expected Output - -- IFRS 9 classification analysis for DM (financial instrument at amortised cost in most cases) -- Month 1 journal entries: rental income recognition, equity purchase accounting -- HMRC advisory note for the property developer -- RWA calculation for the GBP 200M DM portfolio -- Construction finance accounting timeline (no income during construction, income from completion) -- Client-facing advisory comparing Islamic vs. conventional construction finance -- Confirmation that PRA treats Islamic and conventional banking identically for regulatory capital diff --git a/islamic-finance/exercises/ex08-nigeria-fgn-sukuk.md b/islamic-finance/exercises/ex08-nigeria-fgn-sukuk.md deleted file mode 100644 index b550b0f..0000000 --- a/islamic-finance/exercises/ex08-nigeria-fgn-sukuk.md +++ /dev/null @@ -1,134 +0,0 @@ -# Exercise 8: Nigeria Sovereign Sukuk — Infrastructure Finance Accounting - -## Scenario Profile - -| Field | Value | -| --------------------- | ------------------------------------------------------------------------ | -| **Issuer** | Federal Government of Nigeria (FGN) via Debt Management Office | -| **Product** | N300 billion 7-year ijarah sukuk | -| **Underlying Assets** | National road infrastructure | -| **Jurisdiction** | Nigeria (IFRS as adopted in Nigeria, CBN Non-Interest Banking Framework) | -| **Target Time** | 45 minutes | -| **Skills Required** | `sukuk-issuer.md`, `sukuk-investor.md`, `nigeria-ifrs.md` | - ---- - -## Sukuk Issuance Data - -| Parameter | Value | -| ----------------------------- | ------------------------------------------------------ | -| Total issuance | N 300,000,000,000 | -| Tenor | 7 years | -| Structure | Ijarah — road assets leased to FGN | -| Distribution rate | 13.0% p.a. | -| Distribution frequency | Semi-annual (June and December) | -| Semi-annual distribution | N 19,500,000,000 | -| Total distributions over life | N 273,000,000,000 | -| Co-arrangers | Stanbic IBTC, First City Monument Bank | -| SPV | FGN Sukuk Company 4 PLC | -| Underlying assets | 28 federal road projects across 6 states | -| Purchase undertaking | FGN undertakes to repurchase at face value at maturity | - -### Road Asset Details - -| Asset Group | States | Length (km) | Estimated Value (N billions) | -| ------------------ | -------------- | ----------- | ---------------------------- | -| Northern corridor | Kano, Kaduna | 450 | 85 | -| Southwest corridor | Lagos, Ogun | 320 | 95 | -| Southeast corridor | Enugu, Anambra | 280 | 65 | -| North-central | Abuja, Niger | 390 | 55 | -| **Total** | **6 states** | **1,440** | **300** | - ---- - -## Jaiz Bank Investor Position - -| Parameter | Value | -| ------------------------------ | --------------------------------------------------------------- | -| Entity | Jaiz Bank PLC (Nigeria's first non-interest bank) | -| Holding | N 5,000,000,000 | -| Framework | IFRS as adopted in Nigeria + CBN Non-Interest Banking Framework | -| Business model | Hold to collect | -| Semi-annual income | N 325,000,000 | -| ECL staging | Stage 1 (sovereign, performing) | -| ECL provision rate (estimated) | 0.5% (sovereign risk) | -| ECL provision amount | N 25,000,000 | - -### Jaiz Bank Sukuk Portfolio Summary - -| Sukuk Series | Face Value (N billions) | Distribution Rate | Maturity | -| ---------------------- | ----------------------- | ----------------- | -------- | -| FGN Sukuk 2017 (N250B) | 2.0 | 16.47% | 2024 | -| FGN Sukuk 2018 (N100B) | 1.5 | 15.74% | 2025 | -| FGN Sukuk 2020 (N150B) | 3.0 | 11.20% | 2027 | -| FGN Sukuk 2024 (N300B) | 5.0 | 13.00% | 2031 | -| **Total** | **11.5** | | | - ---- - -## Julius Berger Contractor Data - -| Parameter | Value | -| ------------------- | --------------------------------------------------------------- | -| Entity | Julius Berger Nigeria PLC | -| Contract | Road construction across 6 states | -| Contract value | N 85,000,000,000 (first phase) | -| Contract type | Fixed-price construction with milestone payments | -| Framework | IFRS 15 (Revenue from Contracts with Customers) | -| Revenue recognition | Over time (input method — cost incurred / total estimated cost) | - -### Construction Milestones - -| Milestone | % Complete | Cumulative Revenue (N billions) | Payment | -| -------------------- | ---------- | ------------------------------- | -------------- | -| Mobilisation | 5% | 4.25 | N 8.5B advance | -| Earthworks complete | 25% | 21.25 | N 12.75B | -| Base course complete | 55% | 46.75 | N 25.5B | -| Surfacing complete | 85% | 72.25 | N 25.5B | -| Final completion | 100% | 85.00 | N 12.75B | - ---- - -## CBN Reporting Template - -### Quarterly Non-Interest Banking Return — Sukuk Portfolio Section - -| Field | Jaiz Bank Data | -| ---------------------------------- | -------------------------------------- | -| **A. Classification by Structure** | | -| Ijarah sukuk | N 11,500,000,000 | -| Musharakah sukuk | N 0 | -| Wakala sukuk | N 0 | -| **B. Maturity Profile** | | -| Less than 1 year | N 2,000,000,000 | -| 1-3 years | N 4,500,000,000 | -| Over 3 years | N 5,000,000,000 | -| **C. Credit Quality** | | -| Stage 1 (performing) | N 11,500,000,000 | -| Stage 2 (underperforming) | N 0 | -| Stage 3 (non-performing) | N 0 | -| **D. Income This Quarter** | \_\_\_ | -| **E. Concentration Limit** | | -| CBN single obligor limit | 20% of shareholders' funds | -| FGN exposure | Exempt from single obligor (sovereign) | - ---- - -## Your Task - -1. **FGN issuer accounting (IFRS)**: Does the FGN derecognise road assets? Analyse purchase undertaking impact on derecognition. Classify sukuk proceeds (financial liability vs. other). Generate journal entries for: issuance, semi-annual distribution, maturity repurchase -2. **Jaiz Bank investor accounting (IFRS + CBN)**: Classify under IFRS 9 (SPPI test). Generate: initial recognition, semi-annual distribution, year-end ECL provision. Justify Stage 1 assignment for sovereign sukuk -3. **CBN regulatory return**: Complete the quarterly CBN non-interest banking return disclosures for Jaiz Bank's sukuk portfolio -4. **Julius Berger contractor accounting (IFRS 15)**: Is this over-time or point-in-time? What distinguishes an istisna'a contract from a conventional IFRS 15 contract? Does Julius Berger need to know the sukuk structure? -5. **African sovereign sukuk briefing**: Draft a professional briefing covering: five most active African sukuk issuers, typical structures, accounting frameworks, infrastructure gap opportunity, key risks - ---- - -## Expected Output - -- FGN journal entries: issuance of N300B, semi-annual distribution of N19.5B, maturity repurchase -- Jaiz Bank entries: initial recognition, income, ECL provision -- Completed CBN quarterly return template -- Julius Berger IFRS 15 analysis (confirming the sukuk structure is irrelevant to the contractor) -- African sovereign sukuk briefing note (Nigeria, Senegal, Ivory Coast, South Africa, Egypt) -- Key insight: the road contractor accounts identically whether funded by sukuk or conventional bonds diff --git a/islamic-finance/exercises/ex09-global-zakat-comparison.md b/islamic-finance/exercises/ex09-global-zakat-comparison.md deleted file mode 100644 index 5bf492a..0000000 --- a/islamic-finance/exercises/ex09-global-zakat-comparison.md +++ /dev/null @@ -1,137 +0,0 @@ -# Exercise 9: Global Zakat — Institutional Calculation Across Jurisdictions - -## Scenario Profile - -| Field | Value | -| ------------------- | ------------------------------------------------------------------------------------------------------------- | -| **Domain** | Zakat Accounting — Global comparison | -| **Jurisdictions** | Saudi Arabia (ZATCA), Malaysia (voluntary AAOIFI/Hanafi), Pakistan (Zakat and Ushr Ordinance), UK (voluntary) | -| **Target Time** | 40 minutes | -| **Skills Required** | `zakat-global.md`, `saudi-ifrs.md`, `malaysia-mfrs.md`, `pakistan-ifrs.md`, `uk-ifrs.md` | - ---- - -## Zakat Framework Comparison - -| Dimension | Saudi Arabia | Malaysia | Pakistan | UK | -| -------------------- | ------------------------------ | ---------------------------- | -------------------------------------- | ---------------------------- | -| Legal basis | ZATCA mandatory | Voluntary (fatwa-based) | Zakat & Ushr Ordinance 1980 | Entirely voluntary | -| Calculation method | ZATCA balance sheet formula | Hanafi net zakatable assets | Deduction at source + self-assessment | AAOIFI GS 9 or Hanafi | -| Rate | 2.5% | 2.5% | 2.5% (deduction at source on deposits) | 2.5% | -| Filing deadline | 120 days after fiscal year-end | Per Shariah board resolution | 1st Ramadan (lunar calendar) | Per Shariah board resolution | -| Regulator | ZATCA | None (voluntary) | Central Zakat Fund / SBP | None | -| Accounting treatment | P&L expense | \_\_\_ | \_\_\_ | \_\_\_ | - ---- - -## IFI 1: Al Rajhi Bank (Saudi Arabia) - -### Balance Sheet Extract (SAR millions) - -| Item | Amount | Zakat Base Treatment | -| -------------------------- | ---------- | -------------------- | -| Share capital | 40,000 | Include | -| Retained earnings | 28,000 | Include | -| Statutory reserves | 18,000 | Include | -| General provisions | 3,500 | Include | -| **Gross zakat base** | **89,500** | | -| Fixed assets (net) | (6,000) | Deduct | -| Long-term investments | (45,000) | Deduct | -| **Net ZATCA zakat base** | **38,500** | | -| Zakat rate | 2.5% | | -| **ZATCA zakat obligation** | **962.5** | | - -**ZATCA formula**: (Share capital + Reserves + Retained earnings + Provisions) - (Fixed assets + Long-term investments) x 2.5% - -**Note**: ZATCA zakat generally replaces income tax for Saudi-owned entities. - ---- - -## IFI 2: Maybank Islamic Berhad (Malaysia) - -### Balance Sheet Extract (MYR millions) - -| Item | Amount | Zakatable? | -| ------------------------------------ | ---------------------------- | ---------- | -| Cash and equivalents | 12,000 | Yes | -| Murabaha receivables (net) | 85,000 | Yes | -| Sukuk investments | 32,000 | Yes | -| **Total zakatable assets** | **129,000** | | -| Fixed assets (net) | 4,000 | No | -| Long-term equity investments | 8,000 | No | -| **Total non-zakatable assets** | **12,000** | | -| Current liabilities | 45,000 | Deduct | -| **Net zakatable wealth** | **84,000** | | -| Nisab check | MYR 25,000 (gold equivalent) | Exceeded | -| Zakat rate | 2.5% | | -| **Zakat obligation (Hanafi method)** | **2,100** | | - -**Hanafi formula**: (Zakatable assets - Current liabilities) x 2.5% - -**Note**: Voluntary — paid under fatwa approved by Maybank Islamic's Shariah Supervisory Board. Treated as appropriation of profit, not P&L expense. - ---- - -## IFI 3: Meezan Bank (Pakistan) - -### Balance Sheet Extract (PKR millions) - -| Item | Amount | Notes | -| --------------------------------- | ------------------------------ | ------------------------------------ | -| Savings deposits (Islamic) | 485,000 | Subject to zakat deduction at source | -| Investment accounts | 320,000 | Subject to zakat deduction at source | -| Current accounts | 215,000 | Exempt (no return) | -| **Deposits subject to deduction** | **805,000** | | -| Deduction rate | 2.5% of balance on 1st Ramadan | | -| **Zakat collected as agent** | **20,125** | | -| Bank's own institutional zakat | Separate self-assessment | | - -### Pakistan Zakat Collection Mechanics - -| Step | Action | Amount | -| ---------------------- | ------------------------------------------------ | -------------------- | -| 1st Ramadan | Deduct 2.5% from eligible accounts | PKR 20,125M | -| Within 30 days | Remit to Central Zakat Fund | PKR 20,125M | -| Exemption applications | CZF exemption certificates (Shia, other schools) | Varies | -| Bank's own zakat | Self-assessed per Shariah board | Separate calculation | - ---- - -## IFI 4: Gatehouse Bank (UK) - -### Balance Sheet Extract (GBP millions) - -| Item | Amount | Notes | -| ----------------------------- | ---------- | ------------- | -| Cash and equivalents | 85 | Zakatable | -| Islamic financing receivables | 420 | Zakatable | -| Sukuk investments | 150 | Zakatable | -| **Total zakatable assets** | **655** | | -| Fixed assets | 12 | Non-zakatable | -| Current liabilities | 180 | Deduct | -| **Net zakatable wealth** | **475** | | -| Zakat rate | 2.5% | | -| **Zakat obligation** | **11.875** | | - -**Note**: Entirely voluntary. No UK regulatory requirement. Disclosed in notes to financial statements only. Per Shariah board resolution, treated as footnote disclosure — not P&L expense, not equity appropriation. - ---- - -## Your Task - -1. **Build a global zakat comparison framework**: Complete the comparison table (fill in accounting treatment column for Malaysia, Pakistan, UK). Build a single workbook with one tab per jurisdiction -2. **Saudi ZATCA zakat**: Verify the Al Rajhi calculation. Generate journal entry (Dr Zakat Expense, Cr Zakat Payable). Note ZATCA-vs-income-tax interaction -3. **Malaysia voluntary zakat**: Verify the Maybank calculation. Draft the zakat disclosure note for the annual report. Note this is appropriation, not expense -4. **Pakistan Zakat and Ushr**: Generate the bank-as-agent journal entries for: collection, remittance to Central Zakat Fund. Note exemption certificate mechanics -5. **Build global zakat SKILL.md**: Draft the skill file covering all four jurisdictions with: mandatory vs. voluntary, formula, P&L vs. equity vs. footnote, journal entry sequence, disclosure content, trigger conditions - ---- - -## Expected Output - -- Completed comparison table across all four jurisdictions -- 4 sets of journal entries (one per jurisdiction) -- Disclosure note draft for Malaysia (voluntary zakat) -- Pakistan agent collection entries (distinct from institutional zakat) -- Draft zakat SKILL.md with jurisdiction routing logic -- Key insight: ZATCA equity-based formula vs. Hanafi liquid-assets formula produce materially different obligations for the same bank profile diff --git a/islamic-finance/exercises/ex10-shariah-screening-amana.md b/islamic-finance/exercises/ex10-shariah-screening-amana.md deleted file mode 100644 index f0c1d31..0000000 --- a/islamic-finance/exercises/ex10-shariah-screening-amana.md +++ /dev/null @@ -1,169 +0,0 @@ -# Exercise 10: Shariah Portfolio Screening — Amana Income Fund - -## Scenario Profile - -| Field | Value | -| ------------------------ | ------------------------------------------------------------------ | -| **Entity** | Saturna Capital — Amana Income Fund (US-based Islamic fund) | -| **Domain** | Shariah Compliance — Portfolio Screening | -| **Screening Frameworks** | SC Malaysia, Saudi Tadawul, AAOIFI Standard 21, MSCI Islamic Index | -| **Target Time** | 45 minutes | -| **Skills Required** | `shariah-screening-global.md` | - ---- - -## Global Screening Thresholds - -| Criterion | SC Malaysia | Tadawul (Saudi) | AAOIFI Std 21 | MSCI Islamic | -| ------------------------------------------------- | ------------------------------------------------------------------------------------ | --------------- | ------------- | ----------------------------------------- | -| Debt / total assets | < 33% | < 33% | < 30% | < 33.33% | -| Cash + interest-bearing securities / total assets | < 33% | < 33% | < 30% | < 33.33% | -| Non-permissible income / total revenue | < 5% | < 5% | < 5% | < 5% | -| Accounts receivable / total assets | N/A | < 49% | < 45% | < 49% | -| **Sector exclusions** | Alcohol, tobacco, gambling, weapons, pork, conventional finance, adult entertainment | Same | Same | Same + nuclear weapons, civilian firearms | - ---- - -## Amana Income Fund — 10 Equity Positions - -### Position 1: Microsoft Corp (MSFT) - -| Metric | Value | SC Malaysia | Tadawul | AAOIFI 21 | MSCI | -| ------------------------- | ---------- | ----------- | -------- | --------- | -------- | -| Debt / Total Assets | 18.2% | PASS | PASS | PASS | PASS | -| Cash + IBS / Total Assets | 22.5% | PASS | PASS | PASS | PASS | -| Non-permissible income % | 0.3% | PASS | PASS | PASS | PASS | -| A/R / Total Assets | 12.8% | N/A | PASS | PASS | PASS | -| Sector | Technology | OK | OK | OK | OK | -| **Overall** | | **PASS** | **PASS** | **PASS** | **PASS** | - -### Position 2: Johnson & Johnson (JNJ) - -| Metric | Value | SC Malaysia | Tadawul | AAOIFI 21 | MSCI | -| ------------------------- | ---------- | ----------- | -------- | --------- | -------- | -| Debt / Total Assets | 28.5% | PASS | PASS | PASS | PASS | -| Cash + IBS / Total Assets | 15.3% | PASS | PASS | PASS | PASS | -| Non-permissible income % | 1.2% | PASS | PASS | PASS | PASS | -| A/R / Total Assets | 8.9% | N/A | PASS | PASS | PASS | -| Sector | Healthcare | OK | OK | OK | OK | -| **Overall** | | **PASS** | **PASS** | **PASS** | **PASS** | - -### Position 3: Sime Darby Plantation (Malaysia) - -| Metric | Value | SC Malaysia | Tadawul | AAOIFI 21 | MSCI | -| ------------------------- | --------------------- | ----------- | -------- | --------- | -------------- | -| Debt / Total Assets | 22.1% | PASS | PASS | PASS | PASS | -| Cash + IBS / Total Assets | 8.4% | PASS | PASS | PASS | PASS | -| Non-permissible income % | 0.8% | PASS | PASS | PASS | PASS | -| A/R / Total Assets | 11.2% | N/A | PASS | PASS | PASS | -| Sector | Palm oil / Plantation | OK | OK | OK | **FAIL** (ESG) | -| **Overall** | | **PASS** | **PASS** | **PASS** | **FAIL** | - -### Position 4: Saudi Telecom (STC) - -| Metric | Value | SC Malaysia | Tadawul | AAOIFI 21 | MSCI | -| ------------------------- | ------- | ----------- | -------- | --------- | -------- | -| Debt / Total Assets | 35.2% | **FAIL** | **FAIL** | **FAIL** | **FAIL** | -| Cash + IBS / Total Assets | 12.1% | PASS | PASS | PASS | PASS | -| Non-permissible income % | 0.4% | PASS | PASS | PASS | PASS | -| A/R / Total Assets | 18.5% | N/A | PASS | PASS | PASS | -| Sector | Telecom | OK | OK | OK | OK | -| **Overall** | | **FAIL** | **FAIL** | **FAIL** | **FAIL** | - -### Position 5: HSBC Holdings - -| Metric | Value | SC Malaysia | Tadawul | AAOIFI 21 | MSCI | -| ----------- | -------------------- | ----------- | -------- | --------- | -------- | -| Sector | Conventional banking | **FAIL** | **FAIL** | **FAIL** | **FAIL** | -| **Overall** | | **FAIL** | **FAIL** | **FAIL** | **FAIL** | - -_Note: Conventional financial services is an absolute sector exclusion under all four screens._ - -### Position 6: Nestlé SA - -| Metric | Value | SC Malaysia | Tadawul | AAOIFI 21 | MSCI | -| ------------------------- | --------------- | ----------- | -------- | --------- | -------- | -| Debt / Total Assets | 31.8% | PASS | PASS | **FAIL** | PASS | -| Cash + IBS / Total Assets | 14.2% | PASS | PASS | PASS | PASS | -| Non-permissible income % | 0.1% | PASS | PASS | PASS | PASS | -| A/R / Total Assets | 9.5% | N/A | PASS | PASS | PASS | -| Sector | Food & Beverage | OK | OK | OK | OK | -| **Overall** | | **PASS** | **PASS** | **FAIL** | **PASS** | - -### Position 7: Aramco (Saudi Arabia) - -| Metric | Value | SC Malaysia | Tadawul | AAOIFI 21 | MSCI | -| ------------------------- | --------- | ----------- | -------- | --------- | -------- | -| Debt / Total Assets | 12.5% | PASS | PASS | PASS | PASS | -| Cash + IBS / Total Assets | 18.9% | PASS | PASS | PASS | PASS | -| Non-permissible income % | 0.6% | PASS | PASS | PASS | PASS | -| A/R / Total Assets | 14.2% | N/A | PASS | PASS | PASS | -| Sector | Oil & Gas | OK | OK | OK | OK | -| **Overall** | | **PASS** | **PASS** | **PASS** | **PASS** | - -### Position 8: Unilever PLC (UK) - -| Metric | Value | SC Malaysia | Tadawul | AAOIFI 21 | MSCI | -| ------------------------- | -------------- | ----------- | -------- | --------- | -------- | -| Debt / Total Assets | 29.4% | PASS | PASS | PASS | PASS | -| Cash + IBS / Total Assets | 11.8% | PASS | PASS | PASS | PASS | -| Non-permissible income % | 6.2% | **FAIL** | **FAIL** | **FAIL** | PASS | -| A/R / Total Assets | 7.3% | N/A | PASS | PASS | PASS | -| Sector | Consumer Goods | OK | OK | OK | OK | -| **Overall** | | **FAIL** | **FAIL** | **FAIL** | **PASS** | - -_Note: MSCI uses a different definition of non-permissible income that excludes certain revenue streams included by the other three frameworks._ - -### Position 9: Petronas Chemicals (Malaysia) - -| Metric | Value | SC Malaysia | Tadawul | AAOIFI 21 | MSCI | -| ------------------------- | --------- | ----------- | -------- | --------- | -------- | -| Debt / Total Assets | 8.3% | PASS | PASS | PASS | PASS | -| Cash + IBS / Total Assets | 25.1% | PASS | PASS | PASS | PASS | -| Non-permissible income % | 0.2% | PASS | PASS | PASS | PASS | -| A/R / Total Assets | 15.8% | N/A | PASS | PASS | PASS | -| Sector | Chemicals | OK | OK | OK | OK | -| **Overall** | | **PASS** | **PASS** | **PASS** | **PASS** | - -### Position 10: Etisalat (UAE) - -| Metric | Value | SC Malaysia | Tadawul | AAOIFI 21 | MSCI | -| ------------------------- | ------- | ----------- | -------- | --------- | -------- | -| Debt / Total Assets | 24.6% | PASS | PASS | PASS | PASS | -| Cash + IBS / Total Assets | 28.7% | PASS | PASS | PASS | PASS | -| Non-permissible income % | 3.8% | PASS | PASS | PASS | PASS | -| A/R / Total Assets | 42.1% | N/A | PASS | PASS | PASS | -| Sector | Telecom | OK | OK | OK | OK | -| **Overall** | | **PASS** | **PASS** | **PASS** | **PASS** | - ---- - -## Dividend and Purification Data - -| Parameter | Value | -| ----------------------------------------------------- | ---------------------------------------------------- | -| Total quarterly dividends received | USD 4,200,000 | -| Weighted average non-Shariah income ratio (portfolio) | 1.8% | -| Purification amount | USD 4,200,000 x 1.8% = USD 75,600 | -| Eligible charity recipients | Any registered charity (not the fund's own expenses) | - ---- - -## Your Task - -1. **Build the global screening workbook**: Complete the pass/fail matrix for all 10 positions across all 4 screening frameworks. Identify which positions pass ALL four and which have divergences -2. **Purification calculation**: Calculate the quarterly purification obligation. Generate journal entry (Dr Purification Expense, Cr Purification Payable). Draft unitholder disclosure -3. **Screening divergence analysis**: For positions 3 (Sime Darby), 6 (Nestlé), and 8 (Unilever) — explain WHY the screens disagree. Which screen should the fund adopt as governing? Document the resolution policy -4. **Quarterly SSB report**: Draft the Shariah Supervisory Board quarterly report with: compliance status, changes from prior quarter, purification, stocks under review, recommended actions -5. **Scheduled screening task**: Write the quarterly automated screening workflow specification - ---- - -## Expected Output - -- Completed 10x4 screening matrix with PASS/FAIL for each cell -- Purification journal entry and unitholder disclosure -- Divergence analysis for 3 stocks with documented resolution policy -- SSB quarterly report formatted for a 3-member global board (USA, Malaysia, Saudi) -- Quarterly screening task specification with trigger, data sources, output format, escalation rules -- Key insight: different screening methodologies produce different results for the same company — the fund must have a documented governing methodology diff --git a/islamic-finance/exercises/ex11-aaoifi-vs-ifrs-capstone.md b/islamic-finance/exercises/ex11-aaoifi-vs-ifrs-capstone.md deleted file mode 100644 index 46500da..0000000 --- a/islamic-finance/exercises/ex11-aaoifi-vs-ifrs-capstone.md +++ /dev/null @@ -1,163 +0,0 @@ -# Exercise 11: AAOIFI vs. IFRS Full Comparative Financial Statements — Bahrain IFI (Capstone) - -## Scenario Profile - -| Field | Value | -| ------------------- | ---------------------------------------------------------------------------------------------------------- | -| **Entity** | ABC Islamic Bank (Bahrain) — hypothetical mid-size IFI | -| **Domain** | Islamic Accounting — Full Standards Reconciliation | -| **Jurisdiction** | Bahrain (AAOIFI FAS mandatory), with IFRS comparison | -| **Total Assets** | USD 8,000,000,000 | -| **Target Time** | 90 minutes (capstone accounting exercise) | -| **Skills Required** | `bahrain-aaoifi.md`, `murabaha.md`, `ijarah-imb.md`, `musharaka-dm.md`, `mudaraba.md`, `sukuk-investor.md` | - ---- - -## Product Portfolio Breakdown - -| Product | % of Financing | Amount (USD millions) | AAOIFI Standard | IFRS Standard | -| --------------------------- | -------------- | --------------------- | --------------- | ---------------- | -| Murabaha | 45% | 3,600 | FAS 2 | IFRS 9 | -| Ijarah / IMB | 30% | 2,400 | FAS 32 | IFRS 16 / IFRS 9 | -| Musharaka / Mudaraba | 20% | 1,600 | FAS 3, FAS 4 | IFRS 9 | -| Other (salam, istisna'a) | 5% | 400 | FAS 7, FAS 10 | IFRS 9, IFRS 15 | -| **Total Islamic Financing** | **100%** | **8,000** | | | - ---- - -## Trial Balance Data (USD millions) - -### Assets - -| Account | AAOIFI Label | Amount | IFRS Equivalent Label | -| ------------------------------ | ---------------------------- | --------- | ---------------------------------------- | -| Cash and balances with banks | Cash and balances with banks | 450 | Cash and cash equivalents | -| Murabaha receivables (gross) | Murabaha receivables | 3,780 | Islamic financing receivables | -| Less: Deferred murabaha income | Deferred murabaha income | (180) | N/A (netted in amortised cost) | -| Less: ECL provision — murabaha | Provision for impairment | (72) | ECL allowance | -| **Net murabaha receivables** | | **3,528** | | -| Ijarah assets (cost) | Ijarah assets | 2,800 | N/A (derecognised if finance lease) | -| Less: Accumulated depreciation | Accumulated depreciation | (400) | N/A | -| **Net ijarah assets** | | **2,400** | **Net investment in lease: 2,400** | -| Musharaka investments | Musharaka investments | 1,200 | Financial assets at FVOCI/amortised cost | -| Mudaraba investments | Mudaraba investments | 400 | Financial assets at FVPL/FVOCI | -| Sukuk investments | Sukuk investments | 650 | Investment securities | -| Other assets | Other assets | 372 | Other assets | -| **Total Assets** | | **8,000** | | - -### Liabilities and Equity - -| Account | AAOIFI Label | Amount | IFRS Equivalent Label | -| ------------------------------------ | ---------------------------------------- | --------- | ---------------------------------- | -| Current accounts | Current accounts | 1,200 | Customer deposits — demand | -| **Equity of IAH** | **Equity of investment account holders** | **5,200** | **Customer deposits — investment** | -| Other liabilities | Other liabilities | 200 | Other liabilities | -| **Total Liabilities + IAH** | | **6,600** | | -| Share capital | Share capital | 800 | Share capital | -| Reserves | Reserves | 350 | Reserves | -| Retained earnings | Retained earnings | 250 | Retained earnings | -| **Total Equity** | | **1,400** | | -| **Total Liabilities + IAH + Equity** | | **8,000** | | - ---- - -## Income Statement Data (USD millions, annual) - -| Line Item | AAOIFI Label | Amount | IFRS Label | -| --------------------------------------- | ------------------------------------ | ------- | ------------------------------------- | -| Murabaha income | Income from murabaha | 285 | Income from Islamic financing | -| Ijarah income | Income from ijarah | 192 | Income from Islamic financing | -| Musharaka/Mudaraba income | Income from musharaka/mudaraba | 128 | Income from Islamic financing | -| Other Islamic income | Other Islamic income | 35 | Other Islamic income | -| **Total income from Islamic financing** | | **640** | **Net income from Islamic financing** | -| Less: Return to IAH | Return to investment account holders | (312) | Finance cost on customer deposits | -| **Net income after IAH distribution** | | **328** | **Net financing margin** | -| Fee and commission income | Fee and commission income | 45 | Fee and commission income | -| Operating expenses | Operating expenses | (185) | Operating expenses | -| ECL provision charge | Provision for impairment | (38) | ECL expense | -| **Net income before zakat** | | **150** | **Profit before tax** | -| Zakat | Zakat expense | (8) | N/A (footnote only or tax) | -| **Net income** | | **142** | **150** (no zakat in IFRS P&L) | - ---- - -## IAH Fund Data - -| Item | Amount (USD millions) | -| ------------------------------------ | ----------------------- | -| Opening IAH balance | 4,900 | -| New investment accounts | 1,800 | -| Withdrawals | (1,500) | -| Closing IAH balance (before returns) | 5,200 | -| Return distributed to IAH | 312 | -| Mudarib share (bank's fee) | 78 (20% of gross pool) | -| Profit pool (total) | 390 | -| Profit distribution ratio | 80% to IAH, 20% to bank | - ---- - -## AAOIFI Financial Statement Templates - -### Statement of Financial Position (AAOIFI) - -``` -ASSETS - Cash and balances with banks ___ - Murabaha receivables (net) ___ - Ijarah assets (net) ___ - Musharaka investments ___ - Mudaraba investments ___ - Sukuk investments ___ - Other assets ___ -TOTAL ASSETS ___ - -LIABILITIES - Current accounts ___ - Other liabilities ___ -TOTAL LIABILITIES ___ - -EQUITY OF INVESTMENT ACCOUNT HOLDERS ___ - -OWNERS' EQUITY - Share capital ___ - Reserves ___ - Retained earnings ___ -TOTAL OWNERS' EQUITY ___ - -TOTAL LIABILITIES + IAH + EQUITY ___ -``` - -### Statement of Changes in Equity of IAH (AAOIFI-specific) - -| Item | Amount | -| ------------------- | --------- | -| Opening balance | 4,900 | -| New investments | 1,800 | -| Withdrawals | (1,500) | -| Share of profit | 312 | -| **Closing balance** | **5,512** | - -_Note: This statement does NOT exist under IFRS — it is AAOIFI-specific._ - ---- - -## Your Task - -1. **AAOIFI financial statements**: Complete all four AAOIFI statements (financial position, income, changes in IAH equity, cash flows). Use AAOIFI labels throughout — no "loans," no "interest," no "net interest income" -2. **IFRS reconciliation**: Identify the 5 most material AAOIFI-to-IFRS differences. For each: AAOIFI treatment, IFRS treatment, USD impact on assets/liabilities/equity/net income. Produce a reconciliation table -3. **IFRS financial statements**: Apply reconciling adjustments. Produce IFRS-compliant statements (IAS 1, IFRS 7). The critical change: IAH funds move from separate category to financial liabilities -4. **Key ratio comparison**: Calculate under both frameworks: Net Financing Margin, ROA, ROE, NPF ratio, IAH-to-Total-Assets. Identify which ratios differ by >5% and explain why -5. **External auditor workpaper**: Draft assessment of 5 most significant audit risks arising from the AAOIFI/IFRS framework tension -6. **Master Bahrain-AAOIFI SKILL.md**: Draft the comprehensive jurisdiction overlay covering: mandatory FAS list, balance sheet presentation, income statement labels, IAH treatment, SSB disclosure, CBB Rulebook references, zakat disclosure - ---- - -## Expected Output - -- Complete AAOIFI financial statements (4 statements) -- 5-item reconciliation table with USD impacts -- Complete IFRS financial statements (reclassifying IAH as liabilities) -- Ratio comparison table showing ROE divergence (AAOIFI ROE lower due to larger equity base including IAH vs. IFRS ROE higher with IAH as liabilities) -- 5 audit risk assessments with source, rating, procedure, and conclusion -- Deployable Bahrain-AAOIFI SKILL.md -- Key insight: the IAH reclassification alone can swing ROE by several percentage points — an entirely accounting-driven difference, not a performance difference diff --git a/islamic-finance/exercises/ex12-cross-border-consolidation.md b/islamic-finance/exercises/ex12-cross-border-consolidation.md deleted file mode 100644 index 47b674c..0000000 --- a/islamic-finance/exercises/ex12-cross-border-consolidation.md +++ /dev/null @@ -1,162 +0,0 @@ -# Exercise 12: Cross-Border Islamic Banking Group — Consolidated Reporting Challenge - -## Scenario Profile - -| Field | Value | -| ------------------- | ------------------------------------------------------------------------------------------------ | -| **Group** | Al Baraka Banking Group (simplified to 4 entities) | -| **Parent** | Bahrain (AAOIFI) | -| **Subsidiaries** | UAE (IFRS), Malaysia (MFRS), Pakistan (IFRS + SBP overlay) | -| **Target Time** | 75 minutes | -| **Skills Required** | `gcc-crossborder.md`, `bahrain-aaoifi.md`, `uae-ifrs.md`, `malaysia-mfrs.md`, `pakistan-ifrs.md` | - ---- - -## Group Structure - -``` -Al Baraka Islamic Bank BSC (Bahrain) — PARENT -├── Al Baraka Islamic Bank UAE LLC — 100% owned (IFRS / CBUAE) -├── Al Baraka Islamic Bank Malaysia Bhd — 100% owned (MFRS / BNM) -└── Al Baraka Islamic Bank Pakistan Ltd — 85% owned (IFRS / SBP) -``` - ---- - -## Entity 1: Bahrain Parent (AAOIFI) - -### Balance Sheet (USD millions) - -| Item | AAOIFI Label | Amount | -| -------------------------------- | ---------------------------------------- | --------- | -| Cash | Cash and balances with banks | 320 | -| Murabaha receivables (net) | Murabaha receivables | 2,800 | -| Ijarah assets (net) | Ijarah assets | 1,500 | -| Investment in subsidiaries | Investment in subsidiaries | 1,200 | -| Sukuk investments | Sukuk investments | 480 | -| Other assets | Other assets | 200 | -| **Total Assets** | | **6,500** | -| Current accounts | Current accounts | 650 | -| **Equity of IAH** | **Equity of investment account holders** | **3,900** | -| Other liabilities | Other liabilities | 150 | -| Intra-group payable (to UAE sub) | Murabaha payable | 0 | -| **Total Liabilities + IAH** | | **4,700** | -| Share capital | Share capital | 1,000 | -| Reserves | Reserves | 500 | -| Retained earnings | Retained earnings | 300 | -| **Total Equity** | | **1,800** | - ---- - -## Entity 2: UAE Subsidiary (IFRS) - -### Balance Sheet (USD millions) - -| Item | IFRS Label | Amount | -| ------------------------------------ | ------------------------------ | --------- | -| Cash | Cash and cash equivalents | 180 | -| Islamic financing receivables | Loans and advances (Islamic) | 1,850 | -| Sukuk investments | Investment securities | 320 | -| Other assets | Other assets | 150 | -| **Total Assets** | | **2,500** | -| Customer deposits — demand | Current accounts | 280 | -| Customer deposits — investment | Investment deposits (mudaraba) | 1,600 | -| Intra-group receivable (from parent) | Inter-company receivable | 200 | -| Other liabilities | Other liabilities | 80 | -| **Total Liabilities** | | **2,160** | -| Share capital | Share capital | 200 | -| Reserves | Reserves | 80 | -| Retained earnings | Retained earnings | 60 | -| **Total Equity** | | **340** | - ---- - -## Entity 3: Malaysia Subsidiary (MFRS) - -### Balance Sheet (MYR millions — translated at USD 1 = MYR 4.5) - -| Item | MFRS Label | MYR | USD equivalent | -| ------------------------------ | ------------------------------------ | --------- | -------------- | -| Cash | Cash and cash equivalents | 405 | 90 | -| Islamic financing (net) | Financing and advances | 5,400 | 1,200 | -| Sukuk investments | Financial investments | 900 | 200 | -| Other assets | Other assets | 225 | 50 | -| **Total Assets** | | **6,930** | **1,540** | -| Customer deposits — demand | Deposits from customers (demand) | 675 | 150 | -| Customer deposits — investment | Deposits from customers (investment) | 4,500 | 1,000 | -| Other liabilities | Other liabilities | 225 | 50 | -| **Total Liabilities** | | **5,400** | **1,200** | -| Share capital | Share capital | 900 | 200 | -| Reserves | Reserves | 360 | 80 | -| Retained earnings | Retained earnings | 270 | 60 | -| **Total Equity** | | **1,530** | **340** | - ---- - -## Entity 4: Pakistan Subsidiary (IFRS + SBP) - -### Balance Sheet (PKR millions — translated at USD 1 = PKR 280) - -| Item | Label | PKR | USD equivalent | -| ------------------------------ | ----------------------------- | ----------- | -------------- | -| Cash | Cash and balances | 22,400 | 80 | -| Islamic financing (net) | Advances — Islamic financing | 168,000 | 600 | -| Sukuk investments | Investments | 42,000 | 150 | -| Other assets | Other assets | 16,800 | 60 | -| **Total Assets** | | **249,200** | **890** | -| Customer deposits — demand | Deposits — current | 33,600 | 120 | -| Customer deposits — investment | Deposits — investment/savings | 154,000 | 550 | -| Other liabilities | Other liabilities | 14,000 | 50 | -| **Total Liabilities** | | **201,600** | **720** | -| Share capital | Share capital | 28,000 | 100 | -| Reserves | Reserves | 11,200 | 40 | -| Retained earnings | Retained earnings | 8,400 | 30 | -| **Total Equity** | | **47,600** | **170** | -| **NCI (15%)** | | | **25.5** | - ---- - -## Intra-Group Murabaha Data - -| Parameter | Value | -| --------------------------- | -------------------------------------------------------- | -| Facility | Bahrain parent provides $200M murabaha to UAE subsidiary | -| Purpose | Fund subsidiary's Islamic financing operations | -| Structure | Commodity murabaha via London Metal Exchange | -| Mark-up rate | 5.8% p.a. | -| Tenor | 1 year, renewable | -| Parent's books (AAOIFI) | Murabaha receivable $200M | -| Subsidiary's books (IFRS) | Inter-company payable $200M | -| Annual income (parent) | $11.6M | -| Annual expense (subsidiary) | $11.6M | - -### Transfer Pricing: Mudarib Fee - -| Parameter | Value | -| ------------------------------------------ | --------------------------------------------------- | -| Pakistan subsidiary pays to Bahrain parent | $3.2M annual mudarib management fee | -| Fee basis | 1.5% of assets under management | -| Pakistan FBR transfer pricing concern | Must be arm's length | -| Shariah concern | Can one group entity charge mudarib fee to another? | - ---- - -## Your Task - -1. **Identify consolidation adjustments**: List the top 5 accounting policy differences when consolidating AAOIFI parent with IFRS subsidiaries. For each: parent treatment, subsidiary treatment, required adjustment, and whether group should consolidate under AAOIFI or IFRS -2. **IAH funds in consolidation**: The parent presents IAH as separate category; subsidiaries present investment deposits as liabilities. Which treatment for the group? Generate the reclassification adjustment entry -3. **Intra-group murabaha elimination**: Is the $200M facility a genuine murabaha or intra-group funding? Should it be eliminated on consolidation? Generate elimination entries. Address the Shariah question of intra-group murabaha -4. **Transfer pricing and Shariah**: Analyse the mudarib fee — arm's length for Pakistan FBR? Shariah-compliant between group entities? Documentation requirements -5. **Group consolidated financial statements**: Produce consolidated statement of financial position and income statement under IFRS (primary framework), with supplementary AAOIFI disclosures for Bahrain regulatory compliance. Draft the accounting policy note explaining the dual-framework approach - ---- - -## Expected Output - -- 5-item consolidation adjustment register -- IAH reclassification journal (move $3,900M parent IAH + $1,600M UAE + $1,000M Malaysia + $550M Pakistan investment deposits to single "Customer deposits — investment" line under IFRS) -- Intra-group elimination entries ($200M murabaha receivable/payable + $11.6M income/expense) -- NCI calculation for Pakistan (15% of $170M equity = $25.5M) -- Consolidated balance sheet and income statement (IFRS primary) -- Supplementary AAOIFI disclosure note -- Transfer pricing documentation guidance for Pakistan mudarib fee diff --git a/islamic-finance/exercises/ex13-islamic-fintech-scenarios.md b/islamic-finance/exercises/ex13-islamic-fintech-scenarios.md deleted file mode 100644 index b3650ce..0000000 --- a/islamic-finance/exercises/ex13-islamic-fintech-scenarios.md +++ /dev/null @@ -1,209 +0,0 @@ -# Exercise 13: Islamic Fintech and Digital Banking — Accounting for New Structures - -## Scenario Profile - -| Field | Value | -| ------------------- | --------------------------------------------------------------------------------- | -| **Domain** | Islamic Finance Innovation — 4 fintech scenarios | -| **Jurisdictions** | Malaysia, UAE, UK | -| **Target Time** | 40 minutes | -| **Skills Required** | `murabaha.md`, `sukuk-issuer.md`, `malaysia-mfrs.md`, `uae-ifrs.md`, `uk-ifrs.md` | - ---- - -## Scenario 1: Digital Murabaha Platform — HelloGold (Malaysia) - -### Entity Profile - -| Parameter | Value | -| ----------------- | -------------------------------------------------------------------------------------------------- | -| Entity | HelloGold Sdn Bhd (Malaysia) | -| Product | Digital gold murabaha via mobile app | -| Structure | Platform (wakeel/agent) purchases gold at spot, sells to customer at mark-up with deferred payment | -| Physical delivery | None — gold held in vault, customer holds digital certificate | -| Regulatory status | Licensed by SC Malaysia | -| Framework | MFRS 9 (platform), MFRS 15 (wakala fee) | - -### Transaction Data - -| Parameter | Value | -| ------------------------------- | ------------------------------ | -| Gold spot price (cost) | MYR 350 per gram | -| Selling price to customer | MYR 385 per gram (10% mark-up) | -| Deferred payment period | 6 months | -| Average transaction size | MYR 3,850 (10 grams) | -| Monthly transactions | 12,000 | -| Monthly gross transaction value | MYR 46,200,000 | -| Platform wakala fee | 2.5% of transaction value | -| Monthly wakala fee income | MYR 1,155,000 | -| Bank murabaha income (mark-up) | MYR 4,200,000 / month | - -### Accounting Questions - -| Question | Considerations | -| ---------------------------------- | ------------------------------------------------------------------------ | -| Valid murabaha or tawarruq? | No physical delivery to customer — commodity murabaha characteristics | -| Platform receivable classification | MFRS 9 amortised cost if SPPI passes | -| Revenue recognition split | Platform earns wakala fee (MFRS 15); Bank earns murabaha income (MFRS 9) | -| BNM/SC licensing | E-money, digital investment, or Islamic banking? | - ---- - -## Scenario 2: Robo-Adviser — Wahed Invest (UK/US) - -### Entity Profile - -| Parameter | Value | -| ---------------------- | ---------------------------------------------------------- | -| Entity | Wahed Invest Ltd (UK-registered, US operations) | -| Product | Shariah-compliant robo-advisory investment platform | -| Structure | Discretionary portfolio management using Islamic screening | -| AUM | USD 280,000,000 | -| Number of clients | 45,000 | -| Average portfolio size | USD 6,222 | -| Regulatory status | FCA authorised (UK), SEC registered (US) | - -### Fee Structure - -| Fee Type | Rate | Annual Revenue (USD) | -| ------------------ | -------------------------------- | -------------------- | -| Management fee | 0.79% of AUM | 2,212,000 | -| Performance fee | None | 0 | -| Minimum investment | USD 100 | | -| Fee frequency | Monthly deduction from portfolio | | - -### Portfolio Composition - -| Asset Class | Allocation | Screening Standard | -| ------------------------------ | ---------- | -------------------------- | -| US equities (Shariah-screened) | 40% | AAOIFI Std 21 + MSCI | -| International equities | 25% | AAOIFI Std 21 + MSCI | -| Sukuk (global) | 20% | N/A (inherently compliant) | -| Gold (physical-backed ETF) | 10% | N/A | -| Cash equivalents | 5% | Shariah-compliant deposits | - -### Purification Data - -| Parameter | Value | -| --------------------------------- | ------------------------------------------------------------------------ | -| Quarterly portfolio dividends | USD 1,400,000 | -| Weighted non-Shariah income ratio | 2.1% | -| Purification obligation | USD 29,400 | -| Purification responsibility | Platform calculates and deducts; donates to charity on behalf of clients | - -### IFRS 15 Performance Obligations - -| Obligation | Nature | Satisfaction | -| -------------------- | ------------- | ---------------------------------- | -| Portfolio management | Over time | Monthly as services rendered | -| Shariah screening | Over time | Integrated with management | -| Purification service | Point in time | Quarterly calculation and donation | -| Reporting | Over time | Monthly statements | - ---- - -## Scenario 3: P2P Islamic Lending — Qardus (UK) - -### Entity Profile - -| Parameter | Value | -| ----------------- | ------------------------------------------------------------- | -| Entity | Qardus Ltd (UK P2P platform) | -| Product | Shariah-compliant P2P financing for Muslim SMEs | -| Structure | Murabaha — platform matches savers with SME borrowers | -| Regulatory status | FCA authorised as P2P lending platform | -| Framework | IFRS 9 (for each saver's receivable), IFRS 15 (platform fees) | - -### Portfolio Data - -| Parameter | Value | -| --------------------------------- | ---------------- | -| Total facilities outstanding | GBP 18,000,000 | -| Number of active facilities | 240 | -| Average facility size | GBP 75,000 | -| Number of active savers/investors | 3,200 | -| Average saver commitment | GBP 5,625 | -| Platform fee (from borrower) | 3.0% of facility | -| Saver return (murabaha profit) | 8.5% p.a. | -| Default rate (12-month) | 4.2% | - -### Structural Questions - -| Question | Considerations | -| -------------------------- | ---------------------------------------------------------------------- | -| Who is the IFI? | Platform? Each individual saver? The SPV? | -| FCA authorisation category | P2P lending platform (not bank) — but murabaha requires asset purchase | -| Saver's IFRS 9 treatment | Amortised cost for each saver's murabaha receivable? | -| Shariah governance | Full SSB? Single scholar? Fatwa from established institution? | - ---- - -## Scenario 4: Climate Sukuk — Solar Rooftop (UAE) - -### Entity Profile - -| Parameter | Value | -| ----------------- | ------------------------------------------------------------------ | -| Entity | SolarSukuk ADGM Ltd (Abu Dhabi Global Market) | -| Product | Retail impact sukuk funding solar rooftop installations | -| Structure | Ijarah — investors own solar panels, lease to homeowners | -| Regulatory status | ADGM Financial Services Permission | -| Framework | IFRS 9 (investor), IFRS 16 (lease), IFRS 15 (installation revenue) | - -### Sukuk Structure Data - -| Parameter | Value | -| -------------------------------- | ------------------------------------- | -| Total issuance | AED 50,000,000 | -| Number of retail investors | 2,500 | -| Minimum investment | AED 1,000 | -| Average investment | AED 20,000 | -| Underlying assets | 500 residential solar rooftop systems | -| Cost per system | AED 100,000 | -| Monthly lease rental per system | AED 1,200 | -| Total monthly rental income | AED 600,000 | -| Annual distribution to investors | ~14.4% of AED 50M = AED 7,200,000 | -| Distribution frequency | Quarterly | -| Quarterly distribution | AED 1,800,000 | -| Sukuk tenor | 10 years | -| Estimated system useful life | 25 years | - -### SPV Accounting - -| Item | Amount (AED) | -| ------------------------------------- | ------------------------------------------ | -| Solar assets (cost) | 50,000,000 | -| Annual depreciation (25-year life) | 2,000,000 | -| Annual rental income | 7,200,000 | -| Annual operating expenses | 800,000 | -| Annual net income before distribution | 4,400,000 | -| Annual investor distribution | 7,200,000 | -| Shortfall funded from | Asset value appreciation / sponsor support | - -### Classification Question - -| Option | Ijarah Sukuk | Musharaka Sukuk | -| --------------------- | ----------------------------------- | ---------------------------- | -| Investor owns | Solar panels (specific assets) | Share in the project | -| Return from | Lease rental (fixed) | Profit share (variable) | -| Risk profile | Asset risk + lessee credit risk | Full business risk | -| IFRS 9 classification | Likely amortised cost (fixed flows) | Likely FVPL (variable flows) | - ---- - -## Your Task - -1. **Digital murabaha (HelloGold)**: Determine if valid murabaha or tawarruq. Classify the fintech receivable under MFRS 9. Show revenue split between platform (wakala fee) and bank (murabaha income). Identify BNM/SC licensing requirements -2. **Robo-adviser (Wahed)**: Analyse management fees under IFRS 15. Determine purification responsibility (platform vs. client). Classify under UK FCA (collective investment scheme, adviser, or portfolio manager?) -3. **P2P Islamic lending (Qardus)**: Determine who is the IFI. Assess FCA authorisation requirements. Show each saver's IFRS 9 accounting. Recommend Shariah governance structure -4. **Climate sukuk (SolarSukuk)**: Classify as ijarah or musharaka. Show retail investor IFRS 9 accounting. Identify ADGM regulatory framework. Draft SPV accounting policy - ---- - -## Expected Output - -- HelloGold: murabaha validity assessment, MFRS 9 classification, revenue recognition split, licensing note -- Wahed: IFRS 15 performance obligation analysis, purification journal entries, FCA classification -- Qardus: "Who is the IFI?" analysis, FCA authorisation assessment, saver IFRS 9 entries, governance recommendation -- SolarSukuk: ijarah vs. musharaka classification, investor entries, ADGM framework note, SPV accounting policy -- Key insight: Islamic fintech compresses centuries of jurisprudence into app UX — and raises accounting questions that standard-setters have not yet resolved diff --git a/islamic-finance/exercises/ex14-full-library-build.md b/islamic-finance/exercises/ex14-full-library-build.md deleted file mode 100644 index 255a21e..0000000 --- a/islamic-finance/exercises/ex14-full-library-build.md +++ /dev/null @@ -1,153 +0,0 @@ -# Exercise 14: Full Islamic Finance Domain Agent — Global SKILL.md Library Build (Capstone) - -## Scenario Profile - -| Field | Value | -| ------------------------------------------------------ | ----------------------------------------------------------------------------------------------- | -| **Domain** | Islamic Finance Agent Architecture — full library deployment | -| **Scope** | 25 SKILL.md files (12 product + 13 jurisdiction) + routing logic + scheduled tasks + test suite | -| **Target Time** | 90 minutes across multiple sessions | -| **This is the agent-building capstone for Chapter 20** | - ---- - -## Skills Library Inventory — 25 Files Required - -### Product Skills (12 files) - -| # | File | Path | Key Standards | Core Content | -| --- | ----------------------------- | ------------------- | -------------------------------- | --------------------------------------------------------------------- | -| 1 | `murabaha.md` | `/skills/products/` | AAOIFI FAS 2, IFRS 9 | Cost-plus sale, deferred payment, income recognition, journal entries | -| 2 | `ijarah-imb.md` | `/skills/products/` | AAOIFI FAS 32, IFRS 16 | Operating lease, IMB with transfer, lessor vs. lessee accounting | -| 3 | `musharaka-dm.md` | `/skills/products/` | AAOIFI FAS 3, IFRS 9 | Diminishing musharaka, home finance, equity purchase mechanics | -| 4 | `mudaraba.md` | `/skills/products/` | AAOIFI FAS 4, IFRS 9 | Profit-sharing, IAH fund accounting, mudarib fee | -| 5 | `musharaka-full.md` | `/skills/products/` | AAOIFI FAS 3, IFRS 9 | Full partnership, joint venture, profit/loss sharing | -| 6 | `sukuk-issuer.md` | `/skills/products/` | AAOIFI FAS 25/33, IFRS 9, IAS 32 | SPV structure, derecognition analysis, liability vs. equity | -| 7 | `sukuk-investor.md` | `/skills/products/` | AAOIFI FAS 25, IFRS 9 | Classification, SPPI test, income recognition | -| 8 | `salam.md` | `/skills/products/` | AAOIFI FAS 7, IFRS 9 | Forward sale, agricultural/commodity, parallel salam | -| 9 | `istisna-a.md` | `/skills/products/` | AAOIFI FAS 10, IFRS 15 | Construction contracts, milestone billing, parallel istisna'a | -| 10 | `takaful-ifrs17.md` | `/skills/products/` | IFRS 17, AAOIFI | Wakala model, Participants' Fund, qard hasan | -| 11 | `zakat-global.md` | `/skills/products/` | AAOIFI GS 9, ZATCA | ZATCA formula, Hanafi method, by-jurisdiction rules | -| 12 | `shariah-screening-global.md` | `/skills/products/` | AAOIFI Std 21, MSCI | Financial ratio screens, sector exclusions, purification | - -### Jurisdiction Overlay Skills (13 files) - -| # | File | Path | Framework | Key Regulator | -| --- | -------------------- | ------------------------ | --------------------------------- | ---------------- | -| 1 | `bahrain-aaoifi.md` | `/skills/jurisdictions/` | AAOIFI FAS mandatory | CBB | -| 2 | `qatar-aaoifi.md` | `/skills/jurisdictions/` | AAOIFI FAS mandatory | QCB | -| 3 | `malaysia-mfrs.md` | `/skills/jurisdictions/` | MFRS + BNM overlay | BNM, SC Malaysia | -| 4 | `indonesia-psak.md` | `/skills/jurisdictions/` | PSAK Islamic standards | OJK, DSN-MUI | -| 5 | `saudi-ifrs.md` | `/skills/jurisdictions/` | IFRS + ZATCA zakat | SAMA, ZATCA | -| 6 | `uae-ifrs.md` | `/skills/jurisdictions/` | IFRS + CBUAE | CBUAE | -| 7 | `kuwait-ifrs.md` | `/skills/jurisdictions/` | IFRS + CBK | CBK | -| 8 | `oman-ifrs.md` | `/skills/jurisdictions/` | IFRS + AAOIFI Shariah mandatory | CBO | -| 9 | `pakistan-ifrs.md` | `/skills/jurisdictions/` | IFRS + SBP SGF | SBP | -| 10 | `uk-ifrs.md` | `/skills/jurisdictions/` | IFRS + HMRC + PRA/FCA | PRA, FCA, HMRC | -| 11 | `nigeria-ifrs.md` | `/skills/jurisdictions/` | IFRS + CBN Non-Interest Banking | CBN, FRCN | -| 12 | `turkey-tfrs.md` | `/skills/jurisdictions/` | TFRS + BDDK participation banking | BDDK, CMB | -| 13 | `gcc-crossborder.md` | `/skills/jurisdictions/` | Multi-jurisdiction GCC rules | Multiple | - ---- - -## Global Routing Master SKILL.md Specification - -```yaml ---- -name: islamic-finance-global-router -description: > - Activate whenever any Islamic finance term appears in a query: - murabaha, ijarah, musharaka, mudaraba, sukuk, takaful, zakat, - AAOIFI, FAS, Shariah-compliant, Islamic banking, non-interest banking, - halal finance, riba, gharar. - Before any output: identify jurisdiction and product, then load - appropriate product SKILL.md and jurisdiction overlay SKILL.md. ---- -``` - -### Routing Rules - -| Step | Action | Rule | -| ---- | ------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------- | -| 1 | Identify jurisdiction | If none specified: ASK before proceeding. NEVER assume IFRS | -| 2 | Map to framework | AAOIFI mandatory: Bahrain, Qatar, Sudan. MFRS: Malaysia. IFRS: UAE, Saudi, Kuwait, Oman, UK, Nigeria, Kenya, Turkey | -| 3 | Identify product | Load corresponding product SKILL.md | -| 4 | Load jurisdiction overlay | Apply jurisdiction-specific modifications | -| 5 | Pre-output checks | Confirm governing standard in header. Label income per jurisdiction. NEVER use "interest income." NEVER use "loans and advances" in AAOIFI regime | - ---- - -## Test Suite — 13 Queries (One Per Jurisdiction) - -| # | Test Query | Expected Jurisdiction | Expected Product Skill | Key Verification | -| --- | ---------------------------------------------------------- | ---------------------------- | ---------------------- | --------------------------------------------- | -| 1 | "Account for a murabaha receivable for our Bahrain entity" | Bahrain (AAOIFI) | murabaha.md | Labels: "Murabaha Income," AAOIFI FAS 2 cited | -| 2 | "Book the ijarah income for our Qatar subsidiary" | Qatar (AAOIFI) | ijarah-imb.md | AAOIFI FAS 32, "Income from Ijarah" | -| 3 | "Generate the sukuk journal for our Malaysian portfolio" | Malaysia (MFRS) | sukuk-investor.md | "Profit from Islamic Financing," MFRS 9 | -| 4 | "Calculate zakat for our Saudi bank" | Saudi (IFRS + ZATCA) | zakat-global.md | ZATCA formula, NOT Hanafi method | -| 5 | "How should we classify the home finance under UAE IFRS?" | UAE (IFRS) | musharaka-dm.md | IFRS 9 classification, CBUAE reference | -| 6 | "Record the mudaraba profit distribution in Kuwait" | Kuwait (IFRS) | mudaraba.md | IFRS, CBK reference | -| 7 | "Account for our Oman branch's musharaka investment" | Oman (IFRS + AAOIFI Shariah) | musharaka-full.md | IFRS accounting, AAOIFI Shariah governance | -| 8 | "Prepare the SBP return for our Pakistan Islamic bank" | Pakistan (IFRS + SBP) | Multiple | SBP Shariah Governance Framework | -| 9 | "Generate the HMRC tax note for Al Rayan's DM portfolio" | UK (IFRS + HMRC) | musharaka-dm.md | HMRC Alternative Finance Arrangements, PRA | -| 10 | "Book the FGN sukuk income for Jaiz Bank" | Nigeria (IFRS + CBN) | sukuk-investor.md | CBN Non-Interest Banking Framework | -| 11 | "Account for our participation banking income in Turkey" | Turkey (TFRS) | murabaha.md | TFRS, BDDK participation banking | -| 12 | "Prepare the takaful IFRS 17 statements for Indonesia" | Indonesia (PSAK) | takaful-ifrs17.md | PSAK Islamic, OJK reference | -| 13 | "Consolidate our GCC banking group across 4 countries" | GCC cross-border | gcc-crossborder.md | AAOIFI parent + IFRS subs, IAH treatment | - ---- - -## Scheduled Task Specifications - -### Daily Tasks - -| Task | Trigger | Skill File | Output | -| --------------------------- | ------------------- | ----------------- | ---------------------------- | -| Murabaha profit recognition | End of business day | murabaha.md | Daily income accrual entries | -| Ijarah rental recognition | End of business day | ijarah-imb.md | Daily rental income entries | -| Sukuk income accrual | End of business day | sukuk-investor.md | Daily distribution accrual | - -### Monthly Tasks - -| Task | Trigger | Skill File | Output | -| ------------------------ | --------- | --------------------------- | --------------------------------------------- | -| Profit pool distribution | Month-end | mudaraba.md | IAH profit distribution calculation + entries | -| Zakat monitoring | Month-end | zakat-global.md | Minimum balance tracking, accrual update | -| Shariah income check | Month-end | shariah-screening-global.md | Non-Shariah income % check, charity payable | - -### Quarterly Tasks - -| Task | Trigger | Skill File | Output | -| ------------------------ | --------------------- | --------------------------- | ----------------------------------------------- | -| Shariah portfolio screen | Quarter-end + 5 days | shariah-screening-global.md | Full portfolio screening with divergence report | -| SSB quarterly report | Quarter-end + 10 days | shariah-screening-global.md | Compliance status, purification, actions | - -### Annual Tasks - -| Task | Trigger | Skill File | Output | -| -------------------------- | -------- | -------------------------------------- | --------------------------------------------- | -| AAOIFI-IFRS reconciliation | Year-end | bahrain-aaoifi.md + gcc-crossborder.md | Full reconciliation for dual-framework groups | - ---- - -## Your Task - -1. **Audit the skills inventory**: Confirm all 25 files are listed. Identify any gaps in product or jurisdiction coverage -2. **Build the global routing master SKILL.md**: Implement the routing rules with jurisdiction detection, product matching, and pre-output validation -3. **Method A knowledge extraction for murabaha (AAOIFI)**: Interview yourself on the 3 most common FAS 2 errors, Shariah compliance conditions, and murabaha receivable aging review checks. Convert to SKILL.md instructions -4. **Method B document analysis for jurisdiction overlays**: For each of the 13 jurisdiction files, extract key accounting and disclosure rules from regulatory sources into SKILL.md format -5. **Deploy scheduled tasks**: Configure all daily, monthly, quarterly, and annual tasks -6. **Run 13-query test suite**: Execute all test queries, verify correct routing and labelling per jurisdiction -7. **Document the capability statement**: Produce a one-page agent capability statement for client engagements - ---- - -## Expected Output - -- Complete inventory checklist (25 files, all accounted for) -- Global routing SKILL.md (deployable) -- murabaha.md product skill (complete, with AAOIFI and IFRS sections) -- 13 jurisdiction overlay skills (at minimum: key standards, labels, regulator, disclosure requirements) -- Scheduled task configuration (10 tasks across 4 frequencies) -- Test results (13/13 pass with correct routing) -- One-page capability statement ending with the SSB judgment paragraph diff --git a/islamic-finance/skills/islamic-finance-router/SKILL.md b/islamic-finance/skills/islamic-finance-router/SKILL.md index 3313629..a8b678d 100644 --- a/islamic-finance/skills/islamic-finance-router/SKILL.md +++ b/islamic-finance/skills/islamic-finance-router/SKILL.md @@ -9,7 +9,105 @@ description: > local standards). --- -$(cat "/Users/mjs/Documents/code/panaversity-official/tutorsgpt/ag2/specs/chapter 20 islamic finance/islamic-finance-skills/islamic-finance-global-router.md" | tail -n +16) +## PURPOSE + +This is the top-level routing controller for the Islamic Finance Plugin. +It determines which product skill and which jurisdiction overlay to load +before generating any Islamic finance accounting output. +It does NOT contain accounting rules itself. It routes to the files that do. + +## ROUTING PROTOCOL — EXECUTE BEFORE ANY OUTPUT + +### Step 1: Identify the Jurisdiction + +Read the user query for jurisdiction signals: + +- Country name (Bahrain, Malaysia, UAE, Saudi Arabia, UK, Pakistan, Nigeria, etc.) +- Currency (BHD, MYR, AED, SAR, GBP, PKR, NGN) +- Regulator name (CBB, BNM, CBUAE, SAMA, PRA/FCA, SBP, CBN) +- Standard reference (AAOIFI FAS, MFRS, IFRS as adopted in KSA, TFRS) + +**If no jurisdiction is identifiable: ASK before proceeding.** +Do NOT assume a default jurisdiction. Do NOT assume IFRS. + +### Step 2: Identify the Product + +Map query terms to product skills: + +| Query Terms | Route To | +| ----------------------------------------------------------------------- | ------------------------------ | +| murabaha, cost-plus, deferred sale, commodity murabaha, tawarruq, FAS 2 | murabaha skill | +| ijarah, IMB, lease, ijarah muntahia bittamleek, FAS 8, FAS 32 | ijarah-imb skill | +| diminishing musharaka, DM, home finance, co-ownership | musharaka-dm skill | +| mudaraba, investment account, IAH, PER, IRR, FAS 3 | mudaraba skill | +| musharaka, joint venture, partnership, FAS 4 | musharaka-full skill | +| sukuk issuer, sukuk issuance, sukuk structuring, SPV | sukuk-issuer skill | +| sukuk investor, sukuk holding, sukuk classification, SPPI | sukuk-investor skill | +| salam, forward purchase, advance payment commodity, FAS 7 | salam skill | +| istisna'a, construction finance, manufacturing contract, FAS 10 | istisna-a skill | +| takaful, Islamic insurance, wakala model, participants fund | takaful-ifrs17 skill | +| zakat, zakatable, nisab, ZATCA, sadaqah, purification | zakat-global skill | +| shariah screen, halal stocks, prohibited sectors, PSX screen | shariah-screening-global skill | + +### Step 3: Load the Jurisdiction Overlay + +| Jurisdiction | Load Overlay | +| --------------------------------- | -------------------------------- | +| Bahrain | jurisdictions/bahrain-aaoifi.md | +| Qatar | jurisdictions/qatar-aaoifi.md | +| Malaysia | jurisdictions/malaysia-mfrs.md | +| Indonesia | jurisdictions/indonesia-psak.md | +| Saudi Arabia, KSA | jurisdictions/saudi-ifrs.md | +| UAE, Dubai, Abu Dhabi, DIFC, ADGM | jurisdictions/uae-ifrs.md | +| Kuwait | jurisdictions/kuwait-ifrs.md | +| Oman | jurisdictions/oman-ifrs.md | +| Pakistan | jurisdictions/pakistan-ifrs.md | +| UK, United Kingdom | jurisdictions/uk-ifrs.md | +| Nigeria | jurisdictions/nigeria-ifrs.md | +| Turkey | jurisdictions/turkey-tfrs.md | +| GCC cross-border, multi-GCC | jurisdictions/gcc-crossborder.md | + +### Step 4: Apply Rules in Order + +1. Apply product skill rules first (accounting mechanics) +2. Apply jurisdiction overlay modifications (labels, presentation, disclosure) +3. Confirm governing standard in response header before output + +## UNIVERSAL RULES — APPLY IN ALL JURISDICTIONS + +### Prohibited Terms — NEVER USE in any Islamic finance output + +- "interest income" → use jurisdiction-appropriate income label +- "interest expense" → use "profit distributed to IAH" or "financing cost" +- "loans and advances" → in AAOIFI jurisdictions use "financing receivables" +- "net interest margin (NIM)" → use "net financing margin" +- "interest rate" → use "profit rate" or "effective profit rate" + +### Mandatory Shariah Compliance Escalation + +Flag for SSB review when: + +- A new product structure not previously covered by an existing fatwa +- A transaction where Shariah structural requirements may not have been met +- A non-Shariah income item that must be treated as charity (sadaqah) +- Any transaction involving interest-based conventional instruments proposed as Islamic finance + +### The Fundamental Limitation + +This agent automates execution, schedule generation, journal entries, +disclosure drafting, and regulatory reporting. It does NOT make Shariah +compliance judgments. Shariah permissibility determinations are the exclusive +function of qualified Shariah scholars on the institution's SSB. + +## RESPONSE FORMAT + +Every Islamic finance accounting output must begin with: + +``` +GOVERNING FRAMEWORK: [e.g., AAOIFI FAS 2 — Bahrain] +PRODUCT: [e.g., Murabaha] +JURISDICTION: [e.g., Bahrain — CBB Rulebook applies] +``` ## Jurisdiction Overlays diff --git a/islamic-finance/references/aaoifi-fas-reference.md b/islamic-finance/skills/islamic-finance-router/references/aaoifi-fas-reference.md similarity index 100% rename from islamic-finance/references/aaoifi-fas-reference.md rename to islamic-finance/skills/islamic-finance-router/references/aaoifi-fas-reference.md diff --git a/islamic-finance/references/global-standards-map.md b/islamic-finance/skills/islamic-finance-router/references/global-standards-map.md similarity index 100% rename from islamic-finance/references/global-standards-map.md rename to islamic-finance/skills/islamic-finance-router/references/global-standards-map.md diff --git a/islamic-finance/workflow-recipes/annual-zakat-computation.md b/islamic-finance/workflow-recipes/annual-zakat-computation.md deleted file mode 100644 index d92ac2e..0000000 --- a/islamic-finance/workflow-recipes/annual-zakat-computation.md +++ /dev/null @@ -1,266 +0,0 @@ -# Workflow Recipe: Annual Zakat Computation - -## Task Overview - -| Field | Value | -| ------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------- | -| **Task Name** | Annual Institutional Zakat Computation | -| **Frequency** | Annual (aligned with fiscal year-end or Hijri year, per jurisdiction) | -| **Purpose** | Calculate the institutional zakat obligation by jurisdiction, generate payment instructions, prepare disclosure notes, and file with relevant authorities | -| **Owner** | Financial controller / Shariah compliance officer | - ---- - -## Trigger Conditions - -| Trigger | Condition | Action | -| ------------------------ | -------------------------------------------------------------------------- | --------------------------------------------------------- | -| **Scheduled (Saudi)** | Fiscal year-end + 30 days (ZATCA filing deadline: 120 days after year-end) | Begin ZATCA zakat computation | -| **Scheduled (Pakistan)** | 1st day of Ramadan (Hijri calendar) | Execute zakat deduction at source from eligible accounts | -| **Scheduled (Malaysia)** | Per Shariah board resolution (typically fiscal year-end) | Calculate voluntary institutional zakat | -| **Scheduled (UK)** | Fiscal year-end (voluntary, per Shariah board) | Calculate voluntary zakat, prepare footnote disclosure | -| **Event-driven** | Shariah board resolution on zakat method or rate | Re-calculate using approved methodology | -| **Event-driven** | ZATCA audit notification (Saudi) | Prepare supporting documentation | -| **Monthly** | Zakat accrual monitoring | Update monthly zakat provision (1/12 of estimated annual) | - ---- - -## Step-by-Step Execution - -### Step 1: Determine Applicable Methodology by Jurisdiction - -| Jurisdiction | Methodology | Legal Status | Formula Basis | Filing Authority | -| ------------ | --------------------------------------- | ------------------------------- | --------------------------------------------------------------------------------------------------- | ----------------------------- | -| Saudi Arabia | ZATCA balance sheet formula | Mandatory | Equity-based: (Share capital + Reserves + RE + Provisions) - (Fixed assets + Long-term investments) | ZATCA | -| Pakistan | Zakat & Ushr Ordinance 1980 | Mandatory (deduction at source) | 2.5% of eligible deposit balances on 1st Ramadan | Central Zakat Fund via SBP | -| Malaysia | Hanafi net zakatable assets (voluntary) | Voluntary (fatwa-based) | Asset-based: (Zakatable assets - Current liabilities) | None (internal Shariah board) | -| UK | AAOIFI GS 9 or Hanafi (voluntary) | Voluntary | Per Shariah board adopted method | None (internal Shariah board) | -| Bahrain | Per AAOIFI Governance Standard 9 | Varies by entity | Per Shariah board adopted method | None (CBB does not collect) | -| UAE | Voluntary (no federal requirement) | Voluntary | Per Shariah board adopted method | None | - -### Step 2: Extract Financial Data - -**For ZATCA (Saudi Arabia):** - -``` -Source: Audited financial statements / trial balance -Extract: - Share capital SAR ___ - Statutory reserves SAR ___ - Retained earnings SAR ___ - General provisions SAR ___ - Other equity items per ZATCA SAR ___ - GROSS ZAKAT BASE SAR ___ - Less: Fixed assets (net) SAR (__) - Less: Long-term investments SAR (__) - Less: Other ZATCA deductions SAR (__) - NET ZATCA ZAKAT BASE SAR ___ - x 2.5% - ZATCA ZAKAT OBLIGATION SAR ___ -``` - -**For Pakistan (Zakat & Ushr):** - -``` -Source: Core banking system — deposit balances as of 1st Ramadan -Extract: - Savings deposits (Islamic) PKR ___ - Investment accounts PKR ___ - Fixed deposits maturing < 1 year PKR ___ - TOTAL ELIGIBLE DEPOSITS PKR ___ - Less: Exemption certificates PKR (__) - NET DEPOSITS SUBJECT TO ZAKAT PKR ___ - x 2.5% - ZAKAT DEDUCTION AMOUNT PKR ___ - -Separately: - Bank's own institutional zakat = self-assessed per Shariah board method -``` - -**For Malaysia (Hanafi voluntary):** - -``` -Source: Audited financial statements -Extract: - Cash and equivalents MYR ___ - Islamic financing receivables MYR ___ - Sukuk investments MYR ___ - Other liquid trade assets MYR ___ - TOTAL ZAKATABLE ASSETS MYR ___ - Less: Current liabilities MYR (__) - NET ZAKATABLE WEALTH MYR ___ - Nisab check: > gold nisab equivalent? [YES/NO] - x 2.5% - ZAKAT OBLIGATION MYR ___ -``` - -**For UK (voluntary):** - -``` -Source: Audited financial statements -Method: Per Shariah board resolution (typically Hanafi or AAOIFI GS 9) -[Same calculation structure as Malaysia] -Accounting treatment: Footnote disclosure only (per most UK Islamic banks) -``` - -### Step 3: Generate Journal Entries by Jurisdiction - -**Saudi Arabia (ZATCA — P&L expense):** - -``` -Dr Zakat Expense (P&L) SAR [amount] - Cr Zakat Payable — ZATCA SAR [amount] - -On payment: -Dr Zakat Payable — ZATCA SAR [amount] - Cr Cash / Bank SAR [amount] -``` - -**Pakistan (deduction at source — agent):** - -``` -On 1st Ramadan (collection): -Dr Customer Deposits — Savings PKR [amount] -Dr Customer Deposits — Investment PKR [amount] - Cr Zakat Collected — Payable to CZF PKR [total] - -On remittance (within 30 days): -Dr Zakat Collected — Payable to CZF PKR [total] - Cr Cash / Bank PKR [total] - -Bank's own institutional zakat (if paid voluntarily): -Dr Zakat Expense / Retained Earnings Appropriation PKR [amount] - Cr Zakat Payable PKR [amount] -``` - -**Malaysia (voluntary — equity appropriation):** - -``` -Dr Retained Earnings (appropriation) MYR [amount] - Cr Zakat Payable MYR [amount] - -On payment: -Dr Zakat Payable MYR [amount] - Cr Cash / Bank MYR [amount] - -Note: NOT a P&L expense — treated as appropriation of profit per Shariah board resolution -``` - -**UK (voluntary — footnote only):** - -``` -Option A (if treated as expense per Shariah board): -Dr Zakat Expense GBP [amount] - Cr Zakat Payable GBP [amount] - -Option B (footnote only — most common for UK IFIs): -No journal entry — disclosure in notes to financial statements only -``` - -### Step 4: Prepare Disclosure Notes - -**For each jurisdiction, draft the appropriate disclosure:** - -**Saudi Arabia:** - -``` -Zakat is calculated in accordance with ZATCA regulations. The zakat base -is determined using the balance sheet method prescribed by ZATCA. The zakat -charge for the year amounted to SAR [X] million (prior year: SAR [Y] million). -Zakat is classified as an expense in the income statement. -``` - -**Malaysia:** - -``` -The Bank fulfils its obligation on zakat based on a method approved by the -Shariah Supervisory Board. The zakat for the financial year amounted to -MYR [X] million (prior year: MYR [Y] million). Zakat is treated as an -appropriation of profits and charged directly to retained earnings. -``` - -**Pakistan:** - -``` -The Bank deducts zakat at source from eligible deposit accounts in accordance -with the Zakat and Ushr Ordinance 1980. Total zakat collected and remitted -to the Central Zakat Fund during the year amounted to PKR [X] million. -The Bank's own institutional zakat obligation of PKR [Y] million was -calculated in accordance with the method approved by the Shariah Board. -``` - -**UK:** - -``` -The Bank calculates its institutional zakat obligation on a voluntary basis -in accordance with the method approved by its Shariah Supervisory Board. -The zakat obligation for the year, based on the Hanafi methodology applied -to the Bank's net zakatable assets, amounted to GBP [X] million. -[If footnote only: This amount is disclosed for the information of -stakeholders and is not recognised as an expense in the income statement.] -``` - -### Step 5: File with Authorities (where applicable) - -| Jurisdiction | Filing | Deadline | Method | -| ------------ | ------------------------------ | ------------------------------ | ------------------------- | -| Saudi Arabia | ZATCA zakat return | 120 days after fiscal year-end | ZATCA electronic portal | -| Pakistan | Zakat deduction confirmation | Within 30 days of 1st Ramadan | SBP reporting system | -| Malaysia | No filing required (voluntary) | N/A | Internal board resolution | -| UK | No filing required (voluntary) | N/A | Internal board resolution | - -### Step 6: Payment Processing - -``` -Generate payment instructions: - /outputs/zakat-payment-[jurisdiction]-[YYYY].csv - -Fields: Recipient (ZATCA / CZF / designated charity), Amount, Currency, - Bank account, Value date, Reference number - -For voluntary payments (Malaysia, UK): - Recipient per Shariah board designation (may be specific charities or - zakat collection bodies) -``` - ---- - -## Required Skill Files - -| Skill File | Purpose | -| ------------------- | ----------------------------------------------------------------- | -| `zakat-global.md` | All jurisdictional zakat methodologies, formulas, journal entries | -| `saudi-ifrs.md` | ZATCA-specific formula, filing requirements, tax interaction | -| `pakistan-ifrs.md` | Zakat & Ushr Ordinance, deduction at source mechanics | -| `malaysia-mfrs.md` | Voluntary zakat, Hanafi methodology, appropriation treatment | -| `uk-ifrs.md` | Voluntary zakat, footnote disclosure practice | -| `bahrain-aaoifi.md` | AAOIFI Governance Standard 9 zakat requirements | - ---- - -## Output Deliverables - -| Deliverable | Format | Recipient | -| --------------------------------------------- | --------------------------------------- | ----------------------------------- | -| Zakat computation workbook (per jurisdiction) | Spreadsheet (.xlsx) | Financial controller, Shariah board | -| Journal entries | Journal entry file (.csv or ERP import) | General ledger | -| Disclosure note drafts (per jurisdiction) | Word (.docx) | External reporting team | -| ZATCA filing (Saudi) | Electronic submission | ZATCA | -| Pakistan deduction confirmation | Regulatory return | SBP | -| Payment instructions | Payment file (.csv) | Treasury / payments | -| Shariah board resolution (Malaysia/UK) | Board minutes template | Shariah board secretary | - ---- - -## Escalation / Review Checkpoints - -| Checkpoint | Condition | Reviewer | -| ------------------------------- | -------------------------------------------------------------- | ------------------------------------- | -| **Methodology approval** | Shariah board must approve zakat calculation method annually | SSB | -| **ZATCA pre-filing review** | Saudi zakat return reviewed before submission | Tax manager + external adviser | -| **Pakistan deduction accuracy** | Deduction amounts verified against deposit balances | Internal audit | -| **Zakat base dispute** | If ZATCA queries the zakat base calculation | Tax manager + ZATCA liaison | -| **Voluntary zakat amount** | Malaysia/UK — amount reviewed and approved by Shariah board | SSB chair | -| **Year-end audit** | External auditor reviews zakat computation and disclosure | External auditor | -| **Comparative analysis** | Compare ZATCA formula result vs. Hanafi result for same entity | CFO (awareness of methodology impact) | -| **Payment confirmation** | Zakat payments confirmed received by recipients | Treasury + compliance | diff --git a/islamic-finance/workflow-recipes/daily-shariah-screening.md b/islamic-finance/workflow-recipes/daily-shariah-screening.md deleted file mode 100644 index 679d5ac..0000000 --- a/islamic-finance/workflow-recipes/daily-shariah-screening.md +++ /dev/null @@ -1,132 +0,0 @@ -# Workflow Recipe: Daily Shariah Equity Screening - -## Task Overview - -| Field | Value | -| ------------- | ------------------------------------------------------------------------------------------------------------------------------------- | -| **Task Name** | Daily Shariah Equity Screening | -| **Frequency** | Daily (end of business day, after market close) | -| **Purpose** | Screen all portfolio holdings against applicable Shariah screening methodologies and flag compliance breaches for immediate attention | -| **Owner** | Portfolio compliance officer / Shariah compliance unit | - ---- - -## Trigger Conditions - -| Trigger | Condition | Action | -| ---------------- | --------------------------------------------------------------- | ----------------------------------------------------------------- | -| **Scheduled** | Every business day at 18:00 local time (after market close) | Run full screening cycle | -| **Event-driven** | New position added to portfolio | Screen new position immediately against all applicable frameworks | -| **Event-driven** | Company publishes quarterly financials | Re-screen that company with updated financial ratios | -| **Event-driven** | Screening methodology update (SC Malaysia list, MSCI rebalance) | Re-screen entire portfolio against updated methodology | -| **Manual** | Shariah Supervisory Board requests ad-hoc screening | Run full or targeted screening per SSB instruction | - ---- - -## Step-by-Step Execution - -### Step 1: Load Current Portfolio Holdings - -``` -Source: /inputs/portfolio-holdings.csv -Fields required: Ticker, Company Name, Sector, Market Cap, Shares Held, Market Value, Jurisdiction -Validate: All required fields populated, no stale data (last update < 24 hours) -``` - -### Step 2: Fetch Updated Financial Data - -``` -Source: Financial data provider API or /inputs/financial-ratios.csv -For each holding, retrieve: - - Total debt - - Total assets - - Cash + interest-bearing securities - - Accounts receivable - - Total revenue - - Non-permissible revenue (breakdown by category) - - Sector classification (GICS or equivalent) -Validate: Data date within 90 days of current date (quarterly refresh cycle) -``` - -### Step 3: Apply Screening Criteria - -Run each holding against ALL applicable screening frameworks: - -| Framework | Debt/TA Limit | Cash+IBS/TA Limit | NPI/Revenue Limit | AR/TA Limit | -| ------------------ | ------------- | ----------------- | ----------------- | ----------- | -| SC Malaysia | < 33% | < 33% | < 5% | N/A | -| Tadawul (Saudi) | < 33% | < 33% | < 5% | < 49% | -| AAOIFI Standard 21 | < 30% | < 30% | < 5% | < 45% | -| MSCI Islamic Index | < 33.33% | < 33.33% | < 5% | < 49% | - -Also check sector exclusions: conventional financial services, alcohol, tobacco, gambling, weapons, pork, adult entertainment (MSCI adds nuclear weapons, civilian firearms). - -### Step 4: Classify Results - -For each holding, assign status: - -| Status | Definition | Action Required | -| ----------------- | --------------------------------------------------------------------- | ------------------------------------------ | -| **COMPLIANT** | Passes all applicable screens | None | -| **BORDERLINE** | Any ratio within 2% of threshold (e.g., debt/TA at 31% vs. 33% limit) | Add to watchlist, alert compliance officer | -| **NON-COMPLIANT** | Fails one or more screens | Trigger divestment alert | -| **DIVERGENT** | Passes some screens, fails others | Flag for SSB adjudication | -| **DATA STALE** | Financial data older than 90 days | Flag for data refresh | - -### Step 5: Generate Compliance Report - -``` -Output: /outputs/daily-screening-report-[YYYY-MM-DD].md -Sections: - 1. Portfolio Summary: X holdings screened, Y compliant, Z non-compliant, W borderline - 2. Non-Compliant Holdings: Company, which screen(s) failed, specific ratio(s), recommended action - 3. Borderline Holdings: Company, which ratio(s) within 2% of threshold - 4. Divergent Holdings: Company, which screens pass/fail, SSB decision needed - 5. Changes from Prior Day: Newly non-compliant, newly compliant, status changes - 6. Data Quality: Holdings with stale data -``` - -### Step 6: Escalation (if applicable) - -``` -IF any holding is NEWLY NON-COMPLIANT: - → Send priority alert to: Shariah compliance officer, portfolio manager, SSB chair - → Alert content: Company name, failed screen(s), current ratio(s), divestment deadline - → Divestment deadline: Per fund policy (typically 30-90 days for newly non-compliant) - -IF any holding is DIVERGENT: - → Send SSB referral with: Company name, which screens pass/fail, all ratio data - → Request: SSB ruling on which methodology governs for this holding -``` - ---- - -## Required Skill Files - -| Skill File | Purpose | -| ------------------------------------- | --------------------------------------------------------------- | -| `shariah-screening-global.md` | All four screening methodologies, thresholds, sector exclusions | -| Jurisdiction overlays (as applicable) | SC Malaysia, Tadawul, AAOIFI specifics | - ---- - -## Output Deliverables - -| Deliverable | Format | Recipient | -| ---------------------- | ---------------------------------- | ------------------------------------- | -| Daily screening report | Markdown (.md) | Compliance officer, portfolio manager | -| Non-compliance alert | Priority notification | Shariah compliance officer, SSB chair | -| Screening matrix | Spreadsheet (.xlsx) | Compliance file (audit trail) | -| Watchlist update | Appended to /outputs/watchlist.csv | Ongoing monitoring | - ---- - -## Escalation / Review Checkpoints - -| Checkpoint | Condition | Reviewer | -| ------------------------- | --------------------------------------------------- | ------------------------------- | -| **Daily sign-off** | Screening report reviewed and acknowledged | Compliance officer | -| **Weekly SSB update** | Cumulative changes reported to SSB | SSB secretary | -| **Quarterly full review** | Complete re-screening with refreshed financial data | SSB + external auditor | -| **Divestment tracking** | Non-compliant holdings tracked until fully divested | Portfolio manager + compliance | -| **Methodology update** | When any screening body updates its criteria | SSB for policy alignment review | diff --git a/islamic-finance/workflow-recipes/monthly-murabaha-income.md b/islamic-finance/workflow-recipes/monthly-murabaha-income.md deleted file mode 100644 index 9defa0a..0000000 --- a/islamic-finance/workflow-recipes/monthly-murabaha-income.md +++ /dev/null @@ -1,194 +0,0 @@ -# Workflow Recipe: Monthly Murabaha Income Recognition - -## Task Overview - -| Field | Value | -| ------------- | -------------------------------------------------------------------------------------------------------------------------------------------- | -| **Task Name** | Monthly Murabaha Income Recognition and Disclosure Update | -| **Frequency** | Monthly (last business day of each month) | -| **Purpose** | Recognise murabaha profit income for the period, update deferred income balances, generate journal entries, and refresh disclosure schedules | -| **Owner** | Islamic finance accounting unit / financial controller | - ---- - -## Trigger Conditions - -| Trigger | Condition | Action | -| ---------------- | -------------------------------------------------- | ------------------------------------------------------ | -| **Scheduled** | Last business day of each month at 17:00 | Run full monthly income recognition cycle | -| **Event-driven** | New murabaha facility booked during month | Include in current month recognition from booking date | -| **Event-driven** | Early settlement received | Accelerate remaining deferred income, close facility | -| **Event-driven** | Facility classified as non-performing (Stage 3) | Suspend income recognition, reverse accrued income | -| **Manual** | Month-end close adjustment requested by controller | Run with specific override parameters | - ---- - -## Step-by-Step Execution - -### Step 1: Extract Active Murabaha Portfolio - -``` -Source: Core banking system / /inputs/murabaha-portfolio-[YYYY-MM].csv -Fields required per facility: - - Facility ID - - Customer name - - Booking date - - Cost price - - Selling price - - Total deferred profit (selling price minus cost) - - Tenure (months) - - Outstanding receivable (gross) - - Deferred murabaha income balance - - ECL stage (1, 2, or 3) - - Instalment amount - - Instalments received this month - - Jurisdiction - - Applicable framework (AAOIFI FAS 2, MFRS 9, IFRS 9) -Validate: All active facilities included, no duplicate entries, ECL staging current -``` - -### Step 2: Calculate Monthly Income Per Facility - -**For AAOIFI FAS 2 (Bahrain, Qatar):** - -``` -Method: Proportional allocation -Monthly income = (Total deferred profit / Total number of instalments) x Instalments due this month -OR -Monthly income = Deferred profit x (Monthly instalment / Total selling price) - -Label: "Murabaha Income" — NEVER "interest income" -``` - -**For MFRS 9 / IFRS 9 (Malaysia, UAE, Saudi, UK, etc.):** - -``` -Method: Effective profit rate (EPR) / effective interest rate -Monthly income = Opening amortised cost balance x Monthly EPR - -Label per jurisdiction: - - Malaysia: "Profit from Islamic Financing" - - UAE/Saudi/UK: "Income from Islamic Financing" - - NEVER "interest income" in any jurisdiction -``` - -### Step 3: Handle Non-Performing Facilities - -``` -IF facility ECL Stage = 3 (non-performing): - → Suspend income recognition - → Reverse any accrued income not yet received in cash - → Journal: Dr Murabaha Income (reversal), Cr Accrued Income Receivable - → Note: Income recognised on cash basis only for Stage 3 - -IF facility ECL Stage transitions from 1→2: - → Continue income recognition on accrual basis - → Increase ECL provision per IFRS 9 / AAOIFI requirements -``` - -### Step 4: Generate Journal Entries - -**Standard monthly entry (performing facilities):** - -``` -Dr Accrued Murabaha Income Receivable [amount] - Cr Deferred Murabaha Income [amount] (AAOIFI) - OR -Dr [no separate deferred income entry under IFRS 9 amortised cost] - Cr Income from Islamic Financing [amount] (IFRS 9) -``` - -**Instalment receipt entry:** - -``` -Dr Cash / Bank [instalment amount] - Cr Murabaha Receivable (gross) [instalment amount] -``` - -**Early settlement entry:** - -``` -Dr Cash / Bank [settlement amount] -Dr Deferred Murabaha Income [remaining deferred balance] - Cr Murabaha Receivable (gross) [outstanding receivable] - Cr Murabaha Income — Early Settlement [accelerated income, if applicable] -``` - -### Step 5: Update Disclosure Schedules - -``` -Output: /outputs/murabaha-income-schedule-[YYYY-MM].xlsx - -Tab 1: Monthly Income Summary - - Total murabaha income recognised this month - - Breakdown by tenor bucket (< 1 year, 1-3 years, > 3 years) - - Breakdown by jurisdiction - - Comparison to prior month and budget - -Tab 2: Deferred Income Movement - - Opening deferred murabaha income - - New facilities booked (additions) - - Income recognised this month (releases) - - Early settlements (accelerations) - - Closing deferred murabaha income - -Tab 3: Non-Performing Facilities - - Facilities in Stage 3 - - Income suspended this month - - Cumulative suspended income - - Cash basis income received (if any) - -Tab 4: Portfolio Aging - - 0-30 days past due - - 31-60 days past due - - 61-90 days past due - - 90+ days past due - - Portfolio quality ratios (NPF ratio, coverage ratio) -``` - -### Step 6: Validate and Post - -``` -Validation checks: - □ Total income recognised = sum of individual facility calculations - □ Closing deferred income = Opening - Released + New facilities - □ No income recognised on Stage 3 facilities (unless cash basis) - □ Labels are jurisdiction-compliant (no "interest" anywhere) - □ Reconciliation to general ledger trial balance -``` - ---- - -## Required Skill Files - -| Skill File | Purpose | -| ---------------------------------------------- | ------------------------------------------------------------------------ | -| `murabaha.md` | Income recognition rules (AAOIFI proportional vs. IFRS 9 effective rate) | -| `bahrain-aaoifi.md` | AAOIFI FAS 2 specific labels and presentation | -| `malaysia-mfrs.md` | MFRS 9 labels ("Profit from Islamic Financing") | -| `uae-ifrs.md` / `saudi-ifrs.md` / `uk-ifrs.md` | Jurisdiction-specific labels and disclosure | -| `zakat-global.md` | Murabaha receivables in zakat base (if applicable) | - ---- - -## Output Deliverables - -| Deliverable | Format | Recipient | -| ------------------------------ | --------------------------------------- | ---------------------------------- | -| Monthly journal entries | Journal entry file (.csv or ERP import) | General ledger / accounting system | -| Murabaha income schedule | Spreadsheet (.xlsx) | Financial controller, CFO | -| Non-performing facility report | Markdown (.md) | Credit risk, Shariah compliance | -| Disclosure note update | Word (.docx) draft | External reporting team | - ---- - -## Escalation / Review Checkpoints - -| Checkpoint | Condition | Reviewer | -| ---------------------- | ------------------------------------------------------------ | -------------------------------- | -| **Pre-posting review** | All journal entries reviewed before GL posting | Senior accountant | -| **NPF threshold** | If NPF ratio exceeds 3%, escalate to risk committee | Head of credit risk | -| **Income variance** | If monthly income varies > 10% from prior month, investigate | Financial controller | -| **Methodology change** | If switching between proportional and effective rate methods | CFO + external auditor | -| **Quarter-end** | Additional disclosure review for interim reporting | External auditor | -| **Year-end** | Full reconciliation and auditor walkthrough | External auditor + Shariah audit | diff --git a/islamic-finance/workflow-recipes/quarterly-sukuk-distribution.md b/islamic-finance/workflow-recipes/quarterly-sukuk-distribution.md deleted file mode 100644 index cbfcc19..0000000 --- a/islamic-finance/workflow-recipes/quarterly-sukuk-distribution.md +++ /dev/null @@ -1,216 +0,0 @@ -# Workflow Recipe: Quarterly Sukuk Distribution Processing - -## Task Overview - -| Field | Value | -| ------------- | ---------------------------------------------------------------------------------------------------------------------------------- | -| **Task Name** | Quarterly Sukuk Distribution Processing | -| **Frequency** | Quarterly (within 10 business days of quarter-end) | -| **Purpose** | Calculate sukuk distributions, allocate to investors, generate journal entries, prepare regulatory reporting, and process payments | -| **Owner** | Treasury / sukuk operations unit | - ---- - -## Trigger Conditions - -| Trigger | Condition | Action | -| ---------------- | --------------------------------------------------------------- | ------------------------------------------------- | -| **Scheduled** | 5th business day after quarter-end | Begin distribution calculation cycle | -| **Event-driven** | New sukuk issuance during quarter | Add to distribution register from settlement date | -| **Event-driven** | Sukuk maturity during quarter | Process final distribution + principal repayment | -| **Event-driven** | Rating downgrade of sukuk holding | Reassess ECL staging before distribution | -| **Event-driven** | Issuer announces distribution rate change (variable rate sukuk) | Update calculation with new rate | -| **Manual** | Board or SSB requests early distribution reporting | Run on-demand | - ---- - -## Step-by-Step Execution - -### Step 1: Load Sukuk Portfolio Register - -``` -Source: /inputs/sukuk-portfolio-register-[YYYY-QN].csv -Fields required per holding: - - Sukuk ISIN / identifier - - Issuer name - - Structure (ijarah, musharakah, wakala, hybrid) - - Face value held - - Distribution rate (fixed or variable) - - Distribution frequency (semi-annual, quarterly, annual) - - Next distribution date - - Day count convention (Actual/360, Actual/365, 30/360) - - IFRS 9 classification (amortised cost, FVOCI, FVPL) - - ECL stage (1, 2, 3) - - Jurisdiction of issuer - - Jurisdiction of investor (our entity) - - Currency -Validate: All holdings reconcile to custody statements, no stale pricing data -``` - -### Step 2: Calculate Distribution Amounts - -**For each sukuk holding:** - -``` -Distribution = Face value x Distribution rate x (Days in period / Day count basis) - -Example (ijarah sukuk, quarterly): - Face value: $50,000,000 - Distribution rate: 5.25% p.a. - Days in quarter: 91 - Day count: Actual/360 - Distribution = $50,000,000 x 5.25% x (91/360) = $663,541.67 -``` - -**For variable rate sukuk:** - -``` -Distribution rate = Reference rate (e.g., SOFR) + Spread -Fetch current reference rate from /inputs/market-rates.csv -Calculate distribution using current rate -``` - -### Step 3: Income Recognition by Framework - -**Amortised Cost (IFRS 9 / MFRS 9):** - -``` -Income recognised = Carrying value x Effective profit rate x (Days / 360) -Note: EPR income may differ from cash distribution if purchased at premium/discount -Amortisation adjustment = EPR income - Cash distribution received -``` - -**FVOCI (IFRS 9):** - -``` -Income recognised = Same as amortised cost (EPR method through P&L) -Fair value change = (Quarter-end fair value - Prior quarter fair value) through OCI -Fetch quarter-end market values from /inputs/sukuk-market-values.csv -``` - -**FVPL (IFRS 9):** - -``` -Income = Cash distribution + Fair value change (both through P&L) -``` - -**AAOIFI FAS 25 (Bahrain/Qatar investors):** - -``` -Classification per AAOIFI FAS 25 measurement categories -Income label: "Income from Sukuk Investments" — NEVER "interest income" -``` - -### Step 4: Generate Journal Entries - -**Distribution received (amortised cost):** - -``` -Dr Cash / Bank [distribution amount] -Dr Amortisation adjustment (if premium) [adjustment] - Cr Income from Sukuk Investments [EPR income amount] - Cr Amortisation adjustment (if discount) [adjustment] -``` - -**Distribution received (FVOCI):** - -``` -Dr Cash / Bank [distribution amount] - Cr Income from Sukuk Investments [EPR income amount] - Cr/Dr Amortisation adjustment [premium/discount] - -Dr/Cr Sukuk Investments — FVOCI [fair value change] - Cr/Dr Other Comprehensive Income — Sukuk [fair value change] -``` - -**ECL provision update:** - -``` -Dr ECL Expense — Sukuk Investments [provision change] - Cr ECL Allowance — Sukuk Investments [provision change] -``` - -### Step 5: Investor Allocation (if issuer) - -**For entities that are sukuk ISSUERS:** - -``` -Calculate total distribution payable to all investors: - Total = Face value outstanding x Distribution rate x (Days / Day count) - -Allocate to investor register: - Each investor's share = (Investor holding / Total outstanding) x Total distribution - -Generate payment instruction file: - /outputs/sukuk-distribution-payment-[YYYY-QN].csv - Fields: Investor name, Account, IBAN, Currency, Amount, Value date -``` - -### Step 6: Regulatory Reporting - -**Prepare jurisdiction-specific regulatory returns:** - -| Jurisdiction | Regulator | Return | Content | -| ------------ | --------- | --------------------------- | ------------------------------------------------- | -| Bahrain | CBB | Quarterly prudential return | Sukuk portfolio by type, maturity, rating, income | -| Malaysia | BNM | Statistical return | Islamic securities by classification, income | -| UAE | CBUAE | Quarterly return | Investment securities schedule | -| Saudi | SAMA | Quarterly return | Sukuk portfolio analysis | -| UK | PRA | Regulatory return | Investment holdings, RWA calculation | -| Nigeria | CBN | Non-interest banking return | Sukuk by structure, maturity, credit quality | - -``` -Output: /outputs/regulatory-sukuk-return-[jurisdiction]-[YYYY-QN].xlsx -``` - -### Step 7: Validate and Reconcile - -``` -Validation checks: - □ Total distributions received = sum of individual calculations - □ Income recognised reconciles to GL trial balance - □ FVOCI OCI movement reconciles to fair value changes - □ ECL provisions updated for any staging changes - □ Investor payment file reconciles to total distribution payable - □ Custody statement reconciles to internal register - □ All labels jurisdiction-compliant (no "interest" terminology) -``` - ---- - -## Required Skill Files - -| Skill File | Purpose | -| ------------------------------------------------------------------ | ------------------------------------------------------------ | -| `sukuk-investor.md` | IFRS 9 classification, SPPI test, income recognition methods | -| `sukuk-issuer.md` | Distribution calculation, investor allocation, derecognition | -| `bahrain-aaoifi.md` | AAOIFI FAS 25 classification and measurement | -| `malaysia-mfrs.md` | MFRS 9 labels and BNM reporting | -| `uae-ifrs.md` / `saudi-ifrs.md` / `uk-ifrs.md` / `nigeria-ifrs.md` | Jurisdiction-specific regulatory returns | - ---- - -## Output Deliverables - -| Deliverable | Format | Recipient | -| ------------------------------------- | --------------------------------------- | --------------------- | -| Distribution calculation workbook | Spreadsheet (.xlsx) | Treasury, accounting | -| Journal entries | Journal entry file (.csv or ERP import) | General ledger | -| FVOCI OCI movement schedule | Spreadsheet (.xlsx) | Financial reporting | -| Investor payment file (if issuer) | Payment instruction (.csv) | Operations / payments | -| Regulatory returns (per jurisdiction) | Jurisdiction-specific format | Regulator | -| Quarter-end sukuk portfolio summary | Markdown (.md) | CFO, board | - ---- - -## Escalation / Review Checkpoints - -| Checkpoint | Condition | Reviewer | -| ----------------------------------- | ----------------------------------------------------------------- | -------------------------- | -| **Distribution calculation review** | Before payment processing | Treasury manager | -| **ECL staging change** | Any sukuk moves between stages | Credit risk committee | -| **Fair value loss > 5%** | Any FVOCI holding loses > 5% in quarter | CIO / investment committee | -| **Issuer credit event** | Missed distribution, restructuring, default | Risk committee + SSB | -| **Regulatory deadline** | Returns submitted within regulatory timeline | Compliance officer | -| **Year-end** | Full sukuk portfolio audit, fair value verification | External auditor | -| **Shariah compliance** | Quarterly confirmation that all holdings remain Shariah-compliant | SSB |