AAOIFI CPAAGE case studies
AAOIFI CPAAGE · Put your knowledge to work in context.
The AAOIFI Certified Professional Accountant for Islamic Financial Institutions (CPAAGE) is a professional credential offered through the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), the non-profit standard-setting body established in 1990 and registered in the Kingdom of Bahrain in 1991. AAOIFI describes itself as one of the most prominent international non-profit organizations supporting Islamic financial institutions, with its headquarters in Bahrain. The AAOIFI CPAAGE case studies are 5 cases and about 2,379 words.
1Murabaha with a Rebate Clause and a Late-Payment Donation
Bank Noor books a murabaha receivable of 1,200,000 over 24 months (cost 1,000,000 plus a 200,000 profit markup). The sale contract states that if the customer prepays the full remaining balance, the bank 'shall waive 40% of the unearned profit as a goodwill rebate.' The customer also signs a separate undertaking to pay 0.1% per day of any overdue instalment into a charity account.
490 words, about 2 min2Ijarah Muntahia Bittamleek: Residual and Depreciation Judgement
Bank Raqaba leases equipment under ijarah muntahia bittamleek for 5 years. Cost is 5,000,000; expected useful life is 8 years; the lease ends with a transfer of ownership to the lessee for a nominal 1,000.
476 words, about 2 min3Shari'ah Supervisory Board Independence and a Related-Party Takaful Contract
A small Islamic bank has a three-member Shari'ah Supervisory Board (SSB). One member, Sheikh A, is also a 30% shareholder and board member of the takaful operator that the bank is about to appoint for a 4,000,000 annual contract.
491 words, about 2 min4Gift to a Client During Ramadan and a 'Marketing' Payment to a Referrer
A relationship manager at an Islamic bank wants to (a) send a 5,000 gift hamper to a corporate client who is about to decide on a 50,000,000 financing facility, and (b) pay a 2% 'referral fee' to an unlicensed intermediary who introduced the client and who will 'make sure the file moves.' The RM argues: 'Gifts build relationships and are customary; the referral fee is just marketing. Neither is a bribe because no cash goes to the client's decision-maker.' The bank's code is silent on both.
426 words, about 2 min5Profit-Sharing Investment Accounts: Smoothing Reserve and Displaced Commercial Risk
An Islamic bank operates unrestricted profit-sharing investment accounts (PSIA). This year the PSIA pool earned a 4.0% return, but the bank's board wants to pay investors 5.0% to match competitors, funding the 1.0% gap from the shareholders' profit-equalisation reserve (PER).
496 words, about 2 min