Is it a Revenue or Liability?
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Date
2016
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Department of Accountancy, University of Kelaniya
Abstract
ABC finance PLC is a leading Islamic finance provider in Sri Lanka. It provides
lease, Hire purchase and loan facilities to customers. Company is using different
jargons to introduce products In the Islamic unit loan lease products are called
as Murabha and Ijahra respectively. Islamic finance is been conducting
accordance with the principles of sharia law. Sharia law prohibits acceptance of
specific interest penal interest and fees for loans. Company recognizes interest
under profit share. Though company is charging and collecting penal interest for
due rentals, it is not recognized to the period profit. This practice has been
created an issue with accounting standers and financial reporting frame work.
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Citation
Ariyarathna, K.G.K.S. & Aruppala, W.D.N. 2016. Is it a Revenue or Liability?. Case Studies in Accounting “Bridging the Gap”, 03: pp. 28-29. Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka.