Profit Equalization Reserve and Investment Risk Reserve: Issues and its Application

The Islamic Financial Institution (IFI) is a unique financial institution which has special characteristics, maqāsid, worldview, risk, and opportunity. One of the methods used to mitigate the unique risk of Islamic banks is the Profit Equalization Reserve (PER) and Investment Risk Reserve (IRR). How...

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Autor principal:	Muchammad Taufiq Affandi
Formato:	article
Lenguaje:	AR EN ID
Publicado:	Universitas Darussalam Gontor 2019
Materias:	profit equalization reserve (per) investment risk reserve (irr) risk management islamic banking Islam. Bahai Faith. Theosophy, etc. BP1-610 Economic theory. Demography HB1-3840
Acceso en línea:	http://dx.doi.org/10.21111/iej.v5i2.4005 https://doaj.org/article/fb06e0d745144357bceaa39e5971cc74
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spelling	oai:doaj.org-article:fb06e0d745144357bceaa39e5971cc742021-11-09T04:12:20ZProfit Equalization Reserve and Investment Risk Reserve: Issues and its Applicationhttp://dx.doi.org/10.21111/iej.v5i2.40052460-18962541-5573https://doaj.org/article/fb06e0d745144357bceaa39e5971cc742019-12-01T00:00:00Zhttps://ejournal.unida.gontor.ac.id/index.php/JEI/article/view/4005https://doaj.org/toc/2460-1896https://doaj.org/toc/2541-5573The Islamic Financial Institution (IFI) is a unique financial institution which has special characteristics, maqāsid, worldview, risk, and opportunity. One of the methods used to mitigate the unique risk of Islamic banks is the Profit Equalization Reserve (PER) and Investment Risk Reserve (IRR). However, there are some issues related to PER and IRR. Some issues have been identified in the Islamic Financial Services Board (IFSB) guidance note, including profit smoothing and other issues yet to be discussed. This paper tries to observe issues related to PER and IRR and their application in some Islamic banks using content analysis method on their annual reports and/or financial statements. The paper concludes that PER and IRR will bring bigger issues and risks to Islamic banks. This leads the writer to suggest that the regulator reconsider its permissibility. In addition, the paper also finds that the concept of PER and IRR has low acceptance among Islamic banks.Muchammad Taufiq AffandiUniversitas Darussalam Gontorarticleprofit equalization reserve (per)investment risk reserve (irr)risk managementislamic bankingIslam. Bahai Faith. Theosophy, etc.BP1-610Economic theory. DemographyHB1-3840ARENIDIslamic Economics Journal, Vol 5, Iss 2, Pp 295-315 (2019)
institution	DOAJ
collection	DOAJ
language	AR EN ID
topic	profit equalization reserve (per) investment risk reserve (irr) risk management islamic banking Islam. Bahai Faith. Theosophy, etc. BP1-610 Economic theory. Demography HB1-3840
spellingShingle	profit equalization reserve (per) investment risk reserve (irr) risk management islamic banking Islam. Bahai Faith. Theosophy, etc. BP1-610 Economic theory. Demography HB1-3840 Muchammad Taufiq Affandi Profit Equalization Reserve and Investment Risk Reserve: Issues and its Application
description	The Islamic Financial Institution (IFI) is a unique financial institution which has special characteristics, maqāsid, worldview, risk, and opportunity. One of the methods used to mitigate the unique risk of Islamic banks is the Profit Equalization Reserve (PER) and Investment Risk Reserve (IRR). However, there are some issues related to PER and IRR. Some issues have been identified in the Islamic Financial Services Board (IFSB) guidance note, including profit smoothing and other issues yet to be discussed. This paper tries to observe issues related to PER and IRR and their application in some Islamic banks using content analysis method on their annual reports and/or financial statements. The paper concludes that PER and IRR will bring bigger issues and risks to Islamic banks. This leads the writer to suggest that the regulator reconsider its permissibility. In addition, the paper also finds that the concept of PER and IRR has low acceptance among Islamic banks.
format	article
author	Muchammad Taufiq Affandi
author_facet	Muchammad Taufiq Affandi
author_sort	Muchammad Taufiq Affandi
title	Profit Equalization Reserve and Investment Risk Reserve: Issues and its Application
title_short	Profit Equalization Reserve and Investment Risk Reserve: Issues and its Application
title_full	Profit Equalization Reserve and Investment Risk Reserve: Issues and its Application
title_fullStr	Profit Equalization Reserve and Investment Risk Reserve: Issues and its Application
title_full_unstemmed	Profit Equalization Reserve and Investment Risk Reserve: Issues and its Application
title_sort	profit equalization reserve and investment risk reserve: issues and its application
publisher	Universitas Darussalam Gontor
publishDate	2019
url	http://dx.doi.org/10.21111/iej.v5i2.4005 https://doaj.org/article/fb06e0d745144357bceaa39e5971cc74
work_keys_str_mv	AT muchammadtaufiqaffandi profitequalizationreserveandinvestmentriskreserveissuesanditsapplication
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Profit Equalization Reserve and Investment Risk Reserve: Issues and its Application

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