Everything the screen does, written down.
This page is the specification. It is what the code implements, and it will not change without a dated note at the bottom of this page.
The basis we use, and why
Sepcrium screens on a total-assets denominator at 33.333%. That is the basis published by FTSE Yasaar and by the MSCI Islamic Index Series. We state this on every verdict.
The alternative — used by AAOIFI SS 21, Dow Jones Islamic, and S&P Shariah — divides by market capitalisation, either spot or averaged over 24 or 36 months. Both bases are defensible and both are in wide use. They are not interchangeable, and neither is "more correct" in a way we are in a position to adjudicate.
We are transparent about a second reason for the choice, because we think you're entitled to it. A total-assets screen reads only balance-sheet items, and every balance-sheet item we need is free and publicly displayable from SEC EDGAR. A market-cap screen needs licensed price data. Every affordable market-data tier we examined — and we read the terms of service directly — permits internal use only and expressly forbids displaying the data to end users. That constraint is a large part of why so few screeners show their arithmetic. Ours costs nothing to run, which is why we can give it away and why we don't need your data to make it pay.
The four financial ratios
| # | Ratio | Threshold | Buffer |
|---|---|---|---|
| 1 | debt / total assets | < 33.333% | ±5 pts |
| 2 | (cash + interest-bearing securities) / total assets | < 33.333% | ±5 pts |
| 3 | (receivables + cash) / total assets | < 50% | ±5 pts |
| 4 | non-compliant income / total revenue | < 5% | none |
Ratio 4 is inclusive of all interest income, not only interest from lending. If a manufacturer parks cash in treasuries and books the coupon, that coupon counts.
Why ratio 4 gets no buffer
A ±5 point band around a 5% threshold would extend from 0% to 10% — it would swallow the threshold whole and make the test meaningless. The buffer exists to stop companies flickering in and out of compliance on rounding noise near a 33% line. It has no equivalent justification at 5%, so it isn't applied there.
The activity test
A company whose primary business is on this list fails regardless of its balance sheet:
- conventional finance and conventional insurance
- alcohol
- pork and other non-halal food processing
- gambling
- tobacco and vaping
- adult entertainment
- weapons and defence
- cinema and music
- hotels
Primary business is determined from the Standard Industrial Classification code the company itself reports to the SEC. This resolves pure-play cases correctly and it resolves them without guesswork. It does not resolve mixed businesses — see below.
The buffer and the screening calendar
The three balance-sheet ratios carry a ±5 point tolerance band. A company inside that band keeps its existing status. Status changes only after the company sits outside the band for two consecutive quarters.
The screen re-runs in March, June, September and December, a few days after quarter end so that quarterly XBRL has been filed and indexed.
Where the data comes from
Everything is from the U.S. Securities and Exchange Commission, retrieved directly from
data.sec.gov. No commercial data vendor is involved at any point, which means there is no
contract restricting what we may show you.
| Item | Source |
|---|---|
| Total assets, debt, cash, short- and long-term investments, receivables | XBRL companyfacts |
| Revenue and interest income | XBRL companyfacts |
| SIC code and company identity | EDGAR submissions |
| Filing reference for every figure | accession number, shown on the verdict |
We take the most recently reported value for each item. Instantaneous facts (balance-sheet positions) and duration facts (annual flows) are handled separately, and duration facts are accepted only for periods of 330 to 400 days, so that a quarterly figure is never silently compared against an annual one.
Tag preference
US-GAAP filers do not all use the same tag for the same concept. For each item we try a short
ordered list of tags and take the first that exists — for example LongTermDebtNoncurrent
before LongTermDebtAndCapitalLeaseObligations. Current and non-current debt are summed.
Cash, short-term investments and long-term investments are summed for ratio 2. The full tag lists are
in the pipeline source and are not a trade secret.
What we cannot compute, stated plainly
Revenue segmented by prohibited activity
This is not available to us, and it is not available to anyone reading public filings. ASC 280 is a management-approach standard: a company reports the segments it is actually managed by. Walmart reports Walmart U.S., International, and Sam's Club. There is no line in that filing from which any reader can extract a dollar of alcohol or tobacco revenue. Apple's segments are geographic.
Where filers do provide dimensional breakdowns, the members are company-specific extensions with no shared taxonomy — which is precisely why XBRL US maintains a data-quality rule for dimensional members that fail to foot. Commercial vendors who sell activity-level revenue are modelling it, not reading it, and those products are quote-only and institutional.
What we do instead
SIC codes resolve the pure-play cases, which are the large majority. Mixed businesses receive Insufficient disclosure and enter a hand-maintained review overlay. We consider publishing an unsubstantiated activity-revenue percentage to be a worse outcome than publishing "we don't know", so we publish "we don't know".
Interest income that is never tagged
Most non-financial filers do not separately tag interest income in XBRL. Absence of a tag is not evidence of zero. When ratio 4 cannot be computed, the verdict is Insufficient disclosure even if the other three ratios pass comfortably, and we say which item was missing.
Coverage
US-listed companies that file XBRL with the SEC. That is the launch scope and we would rather do it properly than half-cover five markets.
International coverage is genuinely hard rather than merely unfinished. ESEF block-tags the entire IFRS 8 segment note as a single HTML blob, which is less usable than EDGAR, not more. Bursa Malaysia requires an Information Services Licence to display its data. Tadawul publishes no free structured feed. We will add markets when we can do so without lowering the standard on this page.
What a verdict is not
A verdict is the output of the arithmetic above, applied to a company's own filings, on a named basis. It is not a fatwa. It is not certification. It is not our declaration that a security is halal for you. We will never describe a result as "AAOIFI-certified" — AAOIFI certifies individuals through the CSAA programme, not products — and we will not market our output under any index provider's trademark. The correct description of what we do, and the one we use, is:
"Screened on a total-assets basis at 33.3%, consistent with the published FTSE Yasaar and MSCI Islamic criteria."
Specification version 1.0. Any change to a threshold, a denominator, the activity list, or the buffer rule will be recorded here with the date it took effect and what it changed.