Reference no: EM132686429
Question - The following are the relevant information pertaining to the results of the business operations for Bank Shari'ah for the year 2007:
Profit from Operations (Gross) RM 750,500,000
Indirect Expenses RM 120,200,000
Fee Based Income RM 125,500,200
The above profit from operation is prior to (before) the distribution of profit to mudharabah depositors. The agreed profit sharing ratio between the Bank and mudharabah depositors is 80:20 respectively.
Required -
(i) Assuming that other variables remain constant, which profit distribution policy do you think the bank might prefer i.e. pooling method or Separate Investment Account method? Please show all your workings.
(ii) What are the requirements of MASB TRi-3 on profit distribution policy for Islamic banks? What are their justifications?