Foreign Exchange Accounting in Islamic Finance: Reconciling Fair Value with Maqashid Al-Shari'ah

This study examines the conceptual alignment and divergence between PSAK 10 concerning foreign exchange transactions and the fiqh al-ṣarf framework in Islamic jurisprudence. Islamic Financial Institutions (IFIs) inevitably engage in foreign currency activities due to globalization, cross-border trade, remittances, and pilgrimage-related financial services. However, the application of PSAK 10, which mandates fair value adjustments and the recognition of unrealized gains and losses, potentially conflicts with Islamic legal principles that require immediacy of exchange (taqābuḍ) and prohibit speculative gains (maisir). Using a qualitative, conceptual, and literature-based analysis, this study compares PSAK 10, DSN–MUI Fatwa No. 28/2002, and AAOIFI FAS 16 to establish a coherent understanding of foreign exchange reporting from both accounting and Islamic perspectives. In addition, this research draws on the maqāṣid al-sharī‘ah framework as a philosophical foundation maqāṣid emphasizes welfare, justice, and social order, making it relevant to evaluating ethical financial reporting. The findings reveal that PSAK 10 prioritizes economic relevance and decision usefulness, while fiqh al-ṣarf emphasizes legitimacy and the permissibility of profit. AAOIFI provides a middle path for Sharia-compliance disclosure. The study concludes that harmonizing PSAK 10 with maqāṣid principles is crucial for ensuring transparent, ethical, and sharia-aligned reporting in IFIs.