Islamic Financial Accounting Standards to Ijarah by Ahmed Al

Top 20 FREQUENT WORDS

ijarah 57 asset 20 lease 15 accounting 10 rental 10 depreciation 9 income 9 provision 9 assets 8 customer 8 disclosure 8 recording 8 xxx 8 ifas 7 requirements 7 accumulated 6 impairment 6 lessee 6 procedures 6 receivable 6 title 6

DOCUMENT KEY POINTS

ijarah is a contract whereby the owner of an asset other than consumable transfers its usufruct to another person for an agreed period at an agreed consideration
definition and salient feature of ijarah a c ijarah is an islamic alternative of leasing

salient feature of ijarah i contrary to finance lease in ijarah the ownership of the assets remains with lessor the bank and only its right of usage is transferred to the lessee

operating ijarah operating ijarah is a lease that does not include a promise that the legal title in the leased asset will pass to the lessee at the end of the lease
types classification of ijarah

ijarah muntahia bittamleek includes i ijarah through gift i ijarah transfer of legal title at the end of the lease for a token consideration or other amount as specified in the lease i ijarah through transfer of title prior to the end of lease at a price pre decided
ijarah muntahia bittamleek ijarah wa iqtina it is a lease that concludes with the legal title in the asset passing to the lessee after ijarah

ijarah tul musha or joint ownership ijarah it is a lease where bank customer jointly owned the leased asset
after the term of ijarah the treatment is similar to ijarah muntahia bittamleek

if the bank purchases the item required for leasing and receives title of ownership from the vendor if the bank makes payment to the vendor
process of ijarah vendor islamic bank agreement customer if the customer approaches the bank with the request for ijarah financing and enters into a promise to lease agreement

if at the end of the tenure customer can purchase the asset from the bank with the help of separate sale agreement
process of ijarah vendor islamic bank agreement customer if the bank leases the asset to the customer after execution of lease agreement

application of standard the islamic financial accounting standard ifas ijarah was issued by the institute of chartered accountants of pakistan and was adopted by the securities and exchange commission of pakistan vide its notification s
effective date ifas becomes operative for financial statements covering periods beginning on or after july

accounting policy for ijarah ijarah asset recognition a c all ijarah transactions are to be recorded as asset acquired for ijarah at sum of all cost incurred by the bank in acquiring the asset a c assets are to be stated at their cost less accumulated depreciation and impairment if any
a c in respect of addition and disposal of assets depreciation will be charged from the month of acquisition till the month of disposal

ijarah rentals are to be recognized as income on accrual basis in a systematic manner over the lease period expense recognition carrying costs including depreciation incurred in earning the ijarah income are recognized as an expense in the income statement
accounting policy for ijarah revenue recognition

case study for ijarah below is the case study for the understanding of suggested ijarah accounting example amount in rs
asset price monthly rentals tenure years security deposit delivery time month

common questions raised i where asset acquired for ijarah will be reported in the balance sheet under the classification of financing i does ijarah will be consider for a doctor i what will be the guidelines for provision for doubtful debt and income suspense in case ijarah is consider as financing under prudential regulations for banks
i in case ijarah does not fall under the definition of financing what will be the guidelines for general provisions for consumer finance

Please note, This is an auto generated summary based on sentances position in the document and other factors

DOCUMENT WORD ANALYSIS

Main Category

AlHuda Material\islamic banking

KeyWords

contract price sale asset financing lease client purchase ijarah payment profit musharakah lessee amount commodity housing agreement contracts ownership project

DOCUMENT REFERENCES

Number of Pages

23

Published Date

2016-09-17 00:26:59

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Islamic Financial Accounting Standards to Ijarah by Ahmed Al

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Top 20 FREQUENT WORDS

DOCUMENT KEY POINTS

DOCUMENT WORD ANALYSIS

Main Category

KeyWords

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