RISK INVOLVE IN IJARAH
Al- Ijarah Thumma Al-Bay (AITAB) is the contemporary innovative product that specifically designed for Islamic hire-purchase facility with compliance with Sharia principle (Aisyah Abdul Rahman. 2009). Despite the compliance offered by Sharia, Ijarah finance has faced some debatable issue in practicing AITAB in banking system plus, there is no Islamic hire-purchase act to regulate and protect these products. Some scholar also have questioned about the purchase price that are not really, since it already taking into account of the value asset and market condition. AITAB also appear to be similar to a conditional sale in which the owner has to sell the leased asset to the hirer in any situation. (Belder.2004; Saiful Azhar. 2008; Hashim. 2012). However, there is an explanation that AITAB were strictly aimed to protect the owner from the risk default since him as the owner will hold the title of the asset ownership until the lessee made a full payment of the asset that has been leased.
According to study by Hashim et al. (2012) which have mentioned four issues related to the Fiqh matters is the ownership, maintenance liability, penalty and legal treatment. Regarding the ownership, the bank or the owner supposedly to face risk, liabilities and responsibility of the leased asset. Unfortunately, banks would attempt to avoid the transfer of ownership in any possible way. Second is when the owner of the asset supposedly remains liable for basic maintenance even though this term is often difficult to differentiate with clarify from the operational maintenance in which is the responsibility of the hirer (Belder. 2004 ). Next is when the penalty that will be imposed for default payment where in reality default payments...
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... in his presentation that the usufruct is specified by making clear the specification of its source. If a specific tangible asset is leased, then the usufruct will be realized from the specific thus, if it is destroyed the lease become null. However, in reality the bank charged the leassee to pay a certain amount to terminate the contract which is consider as a penalty as the leassee not taking seriously when entering the contract.
Even though most of the jurist and scholar have agreed upon the permissibility of leasing (Abdul Rahim al-Saati.2003). The concept of AITAB that has been introduced seems to duplicate the conventional product, concept, procedure for hire-purchase finance instead of the existing Ijarah concept. However, this concept obviously against the theory of Islamic concept which competing the usury as his own game (Mahmood Mohamed Sanusi. 2012).
At the end of the useful life of fixed assets the businesses will dispose, and any amount received from disposal will represent its residual value. This may be difficult to estimate in practice. How ever, an estimate has to be made. If it is unlikely to be significant amount, a residual value of zero will be assumed. The cost of fixed assets less its estimated residual value represents the total amount to be depreciated over its estimated useful life.
...am R, Incompletely constituted trusts: Covenants to settle property (Equity & Trusts: Text, Cases, and Materials 2013).
Under the revised standard, “a disposal of a component of an entity or a group of components of an entity shall be reported in discontinued operations if t...
Answer of the question one will give overview progress, update of the primary asset. Financial and performance information needed as major part of the investment planning phase. The investment decision making is then determined by Question two, where the answer will provide in brief the levels of servi...
According to the Accounting Principles Board, the total amount to be recognized for the entire period is measured by the difference between the actual amount of cash received by the borrower and the total amount agreed upon to be repaid to the lender (1971). This would require such amount to be recognized as the difference between the present value of the receivable and cash loaned regarded as the addition cost to the products during the contract term. Such a non-interest note may be partial consideration under a purchase contract for supplier products at lower prices than the current prevailing market prices (APB, 1971). The note discount shall be required to be amortized over the life of the note. TIS Section 5100.14 states that income is recognized once the services have been performed and billed, which may be prior to the receipt of the negotiable note (AICPA). Under the second scenario, Bo Broker Company will accept a non-negotiable note whose eligibility for payment also runs for the period of the mortgage. Non-negotiable notes are treated the same as the negotiable notes. This means that the revenue recognition is similar.
(i) only the periods the property was held by the person relinquishing the property (or any related person) shall be taken into account under subparagraph (B)(i), and
An alternative to traditional equity and debt financing is leasing. Leasing is undertaken primarily for what purposes?
...n. Based on the definition of asset/liability, the operating leases items meet it. Therefore the amount should show as asset/liability off balance sheet as well.
Cornaggia, K. J., Franzen, L. A., & Simin, T. T. (2013). Bringing leased assets onto the balance sheet. Journal of Corporate Finance, 22345-360. http://dx.doi.org/10.1016 /j.jcorpfin.2013.06.007
This judgment given set criterion which is still been used in the modern court system and due to this case it was developed that an offer of contract can be unilateral and doesn’t have to be made to a specific party only. Also it was developed to that the acceptance of an offer does not require a notification and that once the concerned party purchases the product the contract is active then and there itself. And it was also established that purchase of an item is a fine example of consideration and therefore makes it a valid contract. (Smith, 2000).
In this section, we define a two dimensional lease contract and other concepts that will be used later, such as the failure model and the formulation of a PM policy and its effect on reliability.
The modern Islamic Finance industry is young, its timeline begin only a few decades ago. However, islamic finance is involving rapidly and continues to expend to serve a growing population of muslims as well as conventional.
Ilavarsan died on July 4. His body was found on a culvert adjoining the railway track in Dharmapuri(Tamil Nadu) with severe and fatal injuries that the police say were due to his being hit by a train as a result of a suicide bid. His relatives, however, insist that he was murdered. The first post-mortem concluded that he had committed suicide. The family then moved the high court seeking another post-mortem.Ilavarasan’s tragic end was the result of the most dangerous and flammable mixture in India -- caste and politics. Divya and Ilavarasan studied in Dharmapuri town and they lived in neighbouring villages -- he is from Natham and her from Sellankottai.
A big hand amongst them was of Madhavapura Mercantile Co-operative Bank(MMCB). Madhavpura Mercantile Co-operative Bank (MMCB) issued him credit regularly against his overpriced ICE (Information, Communication and Entertainment) stocks. MMCB violated Reserve Bank of India (RBI) regulations by providing Ketan Parekh's companies about Rs.840 crores. Banks such as Global Trust Bank(GTB) and Standard Chartered had also given Ketan Parekh an over-draft facility which he used to recycle funds into the market. SEBI's investigations reveal that, Ketan Parekh had access to near about Rs.2,000 crores of funds, primarily from banks by the end of march 2001. "Ketan Parekh misused the banking system to channelise banking funds into the stock market," the SEBI reports said. MMCB crossed its capital market exposure limits by issuing funds to Ketan Parekh without proper collateral security. MMCB's loans to stock markets were around Rs 10 billion out of which amount lent to Ketan Parekh and his firms were over Rs 8
There are a number of features or principles which are attributable to the Mudarabah contract. These include nature of contract, capital, profit sharing right and treatment of losses.