19 July 2021
At its 213th meeting of the Shariah Advisory Council (“SAC”) of Bank Negara Malaysia, the SAC ruled that the method under Malaysian Financial Reporting Standard (“MFRS”) 17 Insurance Contracts and MFRS 9 Financial Instruments may be adopted to measure qard (interest free loan) for transactions between shareholders’ fund and takaful fund. The reason being the total repayment on qard amount will not increase notwithstanding the application of time value of money principle.
The SAC’s ruling also sets out the requirements for comprehensive disclosure in the notes to the financial statements which are available here.
For further information, please contact:
Dhinesh Bhaskaran, Managing Partner, Shearn Delamore & Co
dhinesh@shearndelamore.com
