Transactions of Islamic banks : recording Murabahah in Islamic banks and building depreciation

Fatawa Question

[Question One] : Assallamu ALaikum One question -Our board refuses to adopt the policy of recording the Murabaha on our books at the sale price but instead records at the historical price. We spoke to them and we showed them the AAOIFI standard which they refuse to adopt. Murabaha is recorded in our books at the cost price. Profit is no where but taken in when payments are received in proportion to the rate against the capital Should they continue to refuse to adopt what do you suggest ? I’m being very charitable in my attitude to them as they seem to know more that all the ulema put together, Also we moved into our head quarters in January of 2005 as we had permission to move in and renovate from the owner. We operated from different branches as the renovations were ongoing. At the end of May 2005.we made final payment for the building and transferred title. [Question Two] : We depreciated the building for one month but our auditors depreciated it for 1 year. We do not believe this is correct at all as we did not have ownership at all until that payment was made we only move in to renovate. Is there any Islamic position we should know on this ?

Fatwa

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Publication Date

2007-04-24

Main Subjects

Economics & Business Administration
Islamic Studies

No. of Pages

2

Data Type

Fatawa

Language

English

Record ID

BIM-785018

• APA
• MLA
• AMA