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A 'movable' asset includes money or shares which are used to finance educational, religious or cultural institutions such as madrasahs (Islamic schools) or mosques. [ citation needed ] The madrasahs and mosques themselves are an example of an 'immovable' asset which refers to land or structures open for public use.
The Islamic finance equivalent of a conventional call option (where the buyer has the right but not the obligation to buy in the future at a preset price, and so will make a profit if the price of the underlying asset rises above the preset price) are known as an urbun (down-payment) sale where the buyer has the right to cancel the sale by ...
While in conventional finance late payments/delinquent loans are discouraged by accumulating interest, in Islamic finance control and management of late accounts has become a "vexing problems", according to Muhammad Akran Khan. [81] Others agree it is a problem. [35] [36] [Note 9] According to Ibrahim Warde,
Financial instruments may be categorized by "asset class" depending on whether they are foreign exchange-based (reflecting foreign exchange instruments and transactions), equity-based (reflecting ownership of the issuing entity) or debt-based (reflecting a loan the investor has made to the issuing entity). If the instrument is debt it can be ...
The asset is then sold in the future for its cost plus a profit by an agent. On (or before) the date agreed to in the contract, the seller delivers the asset to the agent who sells the asset who passes the proceeds (minus expenses/fees) on to the SPV, which distributes the proceeds to the sukuk holders. [51]
Another source (investment-and-finance.net) [16] describes Ijarah muntahia bittamleek as being though hibah (gift), where legal title is transferred to the lessee without any more payments, and which according to investment-and-finance.net "is widely used by Islamic banks." [16] or through sales.
A financial asset is a non-physical asset whose value is derived from a contractual claim, such as bank deposits, bonds, and participations in companies' share capital. Financial assets are usually more liquid than tangible assets , such as commodities or real estate.
IFRS (International Financial Reporting Standards), the most widely used financial reporting system, defines: "An asset is a present economic resource controlled by the entity as a result of past events. [5] An economic resource is a right that has the potential to produce economic benefits." [6]