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Murabaḥah, murabaḥa, or murâbaḥah (Arabic: مرابحة, derived from ribh Arabic: ربح, meaning profit) was originally a term of fiqh (Islamic jurisprudence) for a sales contract where the buyer and seller agree on the markup (profit) or "cost-plus" price [1] for the item(s) being sold. [2]
Structure of simple mudaraba contract [11]. Mudarabah is a partnership where one party provides the capital while the other provides labor and both share in the profits. [12] [13] The party providing the capital is called the rabb-ul-mal ("silent partner", "financier"), and the party providing labor is called the mudarib ("working partner").
In Islamic jurisprudence , Bai-muajjal, also called bai'-bithaman ajil, [284] or BBA, is a credit sale or deferred payment sale, i.e. the sale of goods on a deferred payment basis. In Islamic finance, the bai' muajjal product also involves the price markup of a murabahah contract, and a murabahah product involves a bai-muajjal deferred payment.
In Bai' muajjal (literally "credit sale", i.e. the sale of goods on a deferred payment basis), the financier buys the equipment or goods requested by the client, then sells the goods to the client for an agreed price, which includes a mark-up (profit) for the bank and is paid either in installments over a pre-agreed period or in a lump sum at a ...
Salam sale is an exception found in the hadith of the prophet of Islam Muhammad (collections of his sayings and teachings) provided the goods are defined and the date of delivery is fixed. [3] Upon migration from Makkah, Mohammed came to Madinah, where the people used to pay in advance the price of fruit or dates to be delivered over one, two ...
Sales: When you sell sukuk, you are selling ownership in the assets backing them. (In instances where the certificate represents a debt to the holder, the certificate will not be tradable on the secondary market and instead should be held until maturity.) [ 43 ] The sale of bonds is the sale of debt.
The accrual method records income items when they are earned and records deductions when expenses are incurred. The modified cash basis records income when it is earned but deductions when expenses are paid out. Both methods have advantages and disadvantages, [2] [3] and can be used in a wide range of situations. [4]
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