AAOIFI’s Shariah Standard No. 17 related to Sukuk
Definition of Sukuk
The standard defines sukuk as certificates of equal value representing undivided shares in the ownership of tangible assets, usufructs, services, or investments in particular projects or special investment activities.
Structure of Sukuk
The standard outlines various structures for sukuk, such as Ijarah (leasing), Mudarabah (profit-sharing), Wakalah (agency), and others.
Accounting and Disclosure
It provides guidance on the accounting treatment of sukuk transactions, including the recognition, measurement, presentation, and disclosure of sukuk on the issuer’s financial statements.
Sukuk Issuance
The standard covers the process of sukuk issuance, including the documentation required and the rights and responsibilities of sukuk holders.
Default and Remedies
It addresses the treatment of defaults, remedies, and the role of the sukuk holders in case of default.
Sukuk Redemption
Guidelines are provided for the redemption of sukuk and the treatment of funds for redemption.
Sukuk Trading and Secondary Market Transactions: The standard covers the trading and secondary market transactions of Sukuk and their accounting treatment.
It’s important to emphasize that the specifics of sukuk issuance and accounting can vary based on the structure of the sukuk, regulatory requirements in different jurisdictions, and the terms and conditions of the sukuk issuance. Therefore, it’s crucial to consult the latest version of AAOIFI’s Shariah Standard No. 17 and any additional local or regional regulations for comprehensive guidance on sukuk-related matters.