murabaha

CORE PRINCIPLE

Murabaha is a SALE transaction, not a LOAN transaction. The bank is a merchant purchasing and reselling — not a lender charging interest.

This principle governs all accounting treatment and terminology. The jurisdiction overlay determines which label system applies in output.

SHARIAH STRUCTURE VERIFICATION

Before any accounting entry, confirm the four Shariah conditions:

1. The bank (IFI) must have actually purchased the asset from the supplier before selling it to the customer. If the bank never held title, the contract is void.
2. The selling price (cost + mark-up) must be disclosed to the customer.
3. There must be a binding offer and acceptance (ijab and qabul).
4. The deferred payment terms must be specified and agreed in the contract.