Recognition of Ijarah (Capital Rent) Income from Business Using the Rahn (Pawn) Agreement : JEL Classification: G21, M41, Z12, G28, K22

Nursakinah Nursakinah; Sahabuddin Sahabuddin; Winarti Winarti

doi:10.37899/mjde.v3i1.322

Authors

Nursakinah Financial Accounting Interest Area of Accounting Study Program, Sekolah Tinggi Ilmu Ekonomi Indonesia Makassar, Indonesia
Sahabuddin Financial Accounting Interest Area of Accounting Study Program, Sekolah Tinggi Ilmu Ekonomi Indonesia Makassar, Indonesia
Winarti Financial Accounting Interest Area of Accounting Study Program, Sekolah Tinggi Ilmu Ekonomi Indonesia Makassar, Indonesia

DOI:

https://doi.org/10.37899/mjde.v3i1.322

Keywords:

Accrual Accounting, Financial Reporting, Ijarah Income, Islamic Accounting, Rahn Contract, Revenue Recognition

Abstract

This study aims to analyze the recognition of ijarah income derived from rahn contracts within a Sharia-compliant financial institution. A qualitative case study approach was employed, utilizing observations, in-depth interviews, and documentation to examine accounting practices at PT Pegadaian Daya Branch. The findings indicate that ijarah income is recognized based on the accrual principle at the point when custodial services are initiated, supported by real-time transaction recording systems. The study also reveals a clear separation between financing and service components, ensuring compliance with Sharia principles. Additionally, ijarah rates are determined based on collateral value and service duration, while financial reporting adopt.s a standardized and net presentation approach. The novelty of this research lies in its micro-level analysis of how Sharia accounting standards are operationalized in practice, particularly in hybrid rahn–ijarah transactions. The study contributes to the literature by bridging the gap between theoretical frameworks and real-world implementation. The findings provide practical implications for improving transparency, consistency, and compliance in Islamic financial reporting, as well as theoretical insights into the integration of accrual accounting and Sharia principles within institutional systems.

References

Akinyemi, D. O. (2025). Convergence Or Contradiction? A Literature Review On Global Accounting Standards. Journal of Entrepreneurship, Economics, and Finance, 1(1), 38-58.

Aleraig, M. A., & Asutay, M. (2023). Islamic accounting applications of Islamic finance. In Islamic Accounting and Finance: A Handbook (pp. 3-41). https://doi.org/10.1142/9781800612426_0001

Cabán, D. (2024). Principles versus rules based standards: Differential impact on accounting quality and relevance. Journal of Corporate Accounting & Finance, 35(4), 174-191. https://doi.org/10.1002/jcaf.22724

Challoumis, C. (2024). The impact factor of Tangibles and Intangibles of controlled transactions on economic performance. Economic Alternatives, 31(1), 64-76. https://doi.org/10.37075/EA.2025.1.04

Chandawarkar, R., Nadkarni, P., Barmash, E., Capek, A., & Casey, K. (2024). The importance of financial statements in clinical practice. Plastic and Reconstructive Surgery–Global Open, 12(7), e5861. https://doi.org/10.1097/gox.0000000000005861

Dursun, B. (2023). A qualitative research technique: Interview. Disiplinlerarası Eğitim Araştırmaları Dergisi, 7(14), 100-113. https://doi.org/10.57135/jier.1245193

Fardous, M. (2026). AI-Based Revenue Leakage Detection Models Using Transaction-Level Financial Data: A Review. International Journal of Scientific Interdisciplinary Research, 7(1), 37-71. https://doi.org/10.63125/5h2n0g69

Fathoni, K., Salma, S., Faruq, A. F., Arifin, M. A., & Thoriq, M. T. (2024). The Practice of Ijarah Agreement in Gold Pawn: An Islamic Law Study at Jambi Sharia Pawnshop. NALAR FIQH: Jurnal Hukum Islam, 15(2), 62-72. https://doi.org/10.30631/nf.v15i2.1691

Fauzi, N., & Ali, M. M. (2025). Rahn Contract at Sharia Pawnshop in Madura: Analysis of Maqasid al-Shariah, Socio-Cultural Dynamics, and Socio-Economic Impacts. Tribakti: Jurnal Pemikiran Keislaman, 36(1), 103-122. https://doi.org/10.33367/tribakti.v36i1.5263

Feng, L., Liu, J., Wang, Z., & Hong, Y. (2025). Navigating compliance complexity: Insights from the MOA framework in international construction. Engineering, Construction and Architectural Management, 32(9), 6068-6094. https://doi.org/10.1108/ECAM-02-2024-0163

Fridson, M. S., & Alvarez, F. (2022). Financial statement analysis: a practitioner's guide. John Wiley & Sons.

Iswanaji, C., Muslim, A., & Nafi'Hasbi, M. Z. (2022). Ijarah collaborative service model in Sharia banking. Indonesian Interdisciplinary Journal of Sharia Economics (IIJSE), 5(2), 701-718. https://doi.org/10.31538/iijse.v5i2.1778

Kadi, S. (2025). Accounting and legal disputes in Islamic banking and finance. Journal of Islamic Economic Laws, 8(01), 19-40. https://doi.org/10.23917/jisel.v8i01.6915

Kassem, R., & Omoteso, K. (2024). Effective methods for detecting fraudulent financial reporting: practical insights from Big 4 auditors. Journal of Accounting Literature, 46(4), 587-610. https://doi.org/10.1108/JAL-03-2023-0055

Kelly, G. J. (2023). Qualitative research as culture and practice. Handbook of research on science education, 60-86. https://doi.org/10.4324/9780367855758-4

Khoirunnisa, T. A., Nurish, A., & Priyanto, S. (2026). Sharia principles in counternarratives of charity-based terrorism financing. Review of Islamic Social Finance and Entrepreneurship, 46-64. https://doi.org/10.20885/RISFE.vol5.iss1.art3

Kyaw, M. M., & Yoon, S. M. (2026). The effect of communication between internal and external auditors and auditor-provided tax services on accounting conservatism. National Accounting Review, 8(1), 77-94. https://doi.org/10.3934/NAR.2026004

Ma'ruf, A., Hasanah, S. M., Hakim, L., & Umam, F. N. (2025). Islamic Pawnbroking in Scholarly Discourse: Trends, Gaps, and Future Directions. Share: Jurnal Ekonomi dan Keuangan Islam, 14(1), 472-493. https://doi.org/10.22373/share.v14i1.27484

Miles, M. B., Huberman, A. M., & Saldana, J. (2014). Qualitative data analysis. sage.

Morshed, A. (2026). Comparative analysis of accounting standards in the Islamic banking industry: a focus on financial leasing. Journal of Islamic Accounting and Business Research, 17(1), 59-73. https://doi.org/10.1108/JIABR-12-2022-0349

Nasada, K. Z. P., Harmain, H., & Rahmani, N. A. B. (2025). Application of Islamic Accounting and Benefits in Rahn Tasjily Financing in the Management of Islamic Multipurpose Cooperatives. Tazkia Islamic Finance and Business Review, 19(1), 140-166. https://doi.org/10.30993/tifbr.v19i1.399

Nasrullah, M. (2024). Implementation of Fiqh Rules in Economic Transactions in Islamic Financial Institutions: A Literature Review Study. Demak Univers. J. Islam Sharia, 2(3), 347-360. https://doi.org/10.61455/deujis.v2i03.194

Nurlaela, N., Mafaza, A., Andhini, A., Jamilah, S., & Malik, M. I. (2026). Legal Analysis Of Pawnbroking In Fiqh Muamalah And Its Implications In Islamic Finance Practice. Anayasa: Journal of Legal Studies, 3(2), 40-50. https://doi.org/10.61397/ays.v3i2.462

Nurrohman, D., Wijayanti, N., Al Satria, M. I., & Asiyah, B. N. (2025, November). Implementation of Ijarah and PSAK 107 Accounting at BMT to Improve Sharia Financial Transparency. In Proceeding of Annual International Conference on Islamic Economics (AICIE) (Vol. 4, No. 1, pp. 414-420).

Özkan, U. B. (2023). Validity and reliability in document analysis method: A theoretical review in the context of educational science research. Education, 56, 823-848.

Pahwa, M., Cavanagh, A., & Vanstone, M. (2023). Key informants in applied qualitative health research. Qualitative Health Research, 33(14), 1251-1261. https://doi.org/10.1177/10497323231198796

Putra, H., Azzaki, M. A., & Deli, M. M. (2024). Implementation of Rahn Contract Principles in Sharia Pawnshops to Enhance Public Interest in Sharia Pawn Services. INVEST: Jurnal Inovasi Bisnis dan Akuntansi, 5(2), 436-445. https://doi.org/10.55583/invest.v5i2.1146

Rahayu, S. K., Komala, A. R., & Yusuf, S. N. B. S. (2024). Enhancing Islamic banking through accounting and taxation harmonization: A comparative study of Indonesia and Malaysia. Australasian Accounting, Business and Finance Journal, 18(5). https://doi.org/10.14453/aabfj.v18i5.09

Saiman, M. Z., & Mohd Zainuddin, A. A. R. (2022). Al-Rahnu system as an alternative to conventional pawnbroking for Muslim community in Malaysia: An analysis study of legal framework and jurisdiction on the governance of al-Rahnu. Journal of Contemporary Islamic Studies (JCIS), 8(1), 1-11. https://doi.org/10.24191/jcis.v8i1.2

Saputra, W. (2024). Comparison of Leasing and Ijarah Accounting: A Critical Research of Indonesian Financial Accounting Standards. Al-Buhuts, 20(2), 53-74. https://doi.org/10.30603/ab.v20i2.6021

Schroeder, R. G., Clark, M. W., & Cathey, J. M. (2022). Financial accounting theory and analysis: text and cases. John Wiley & Sons.

Siddik, A. B., Yong, L., & Rahman, M. N. (2023). The role of Fintech in circular economy practices to improve sustainability performance: a two-staged SEM-ANN approach. Environmental Science and Pollution Research, 30(49), 107465-107486. https://doi.org/10.1007/s11356-023-25576-7

Siddiqui, O., Khaleequzzaman, M., & Afzal, M. S. (2022). Accounting for Ijarah–Reviewing the Need for Exclusive Accounting Standards. Journal of Islamic Business and Management, 12(02). https://doi.org/10.26501/jibm/2022.1202-005

Sutisman, E., Auliyah, I., & Noy, I. (2024). Accounting for society: Examining the interplay between financial reporting and social responsibility. Advances in Applied Accounting Research, 2(1), 54-70. https://doi.org/10.60079/aaar.v2i1.166

Tiron-Tudor, A. (2023). Accrual accounting. In Global Encyclopedia of Public Administration, Public Policy, and Governance (pp. 183-189). Cham: Springer International Publishing. https://doi.org/10.1007/978-3-030-66252-3_2271

Uddin, A. E. (2026). Ethical Oversight in Islamic Finance: Institutions and Standards. In The Regulation of Islamic Financial Institutions (IFIs) and Ethical Oversight in South Asia: An Islamic Law Perspective (pp. 121-203). Cham: Springer Nature Switzerland. https://doi.org/10.1007/978-3-032-09828-3_3

Yu, H., Bansal, P., & Arjalies, D. L. (2022). International business is contributing to environmental crises. Forthcoming in the Journal of International Business Studies. https://doi.org/10.1057/s41267-022-00590-y

Zafar, M. B. (2024). Islamic financial accounting standards in Pakistan: a comparison with AAOIFI. Journal of Islamic Accounting and Business Research. https://doi.org/10.1108/JIABR-10-2023-0335