Ijarah and Its Application 2

The following are considered benefits of leasing from the perspective of the lessee:

• No off balance sheet financing

• Not owning an asset in the end

• Higher cost financing

• Certain costs related to the asset are paid and covered by the lessor

Which of the following are considered to be the legal foundation of Ijarah in the sources of Shari'ah as it contains direct reference to Ijarah?

• The Quran & Sunnah

• Practice of Western Society

• Common Law

• Conventional Lease Benchmark

Based on the Fiqh rules on Ijarah, which of the statements below is wrong?

• It's the duty of the lessor to maintain the leased asset to retain its benefit that is used by the lessee

• The lessee must act as a trustee of the lessor in treating the leased property properly

• A leased asset may be subleased to a third party without permission from the lessor unless stated otherwise

• The lessee may use the asset as he wishes with restriction with condition that he has paid for the rent

The following terms are considered as the Shari'ah compliant alternative of a conventional financial lease industry, except:

• Ijarah al 'amal

• Ijarah muntahia bittamleek

• Ijarah wa Iqtina

• Al Ijarah thumma al bai'

The unique party in an Islamic Real Estate Investment Trust compared to it's conventional counterpart is:

• The REIT manager

• The trustee

• The unit holders

• The Shari'ah Supervisory Board

Which of the following can't be purchased using an Ijarah based card such as the KFH Ijarah card?

• Furniture

• Gym membership

• Home entertainment

• Kitchen Applications

From the financial institution's perspective, how is credit risk mitigated in Ijarah?

• Collateral or security

• Charity penalty clause

• Life takaful cover

• All of the options provided are risk mitigation techniques for credit risk

The most common contract used as the foundation structure of a sukuk is:

• Musharakah

• Salam

• Ijarah

• Mudharabah

In AAOIFI's Islamic Accounting standard of FAS 8, the transfer of ownership to the lessee can be done in the following ways, except:

• Transfer of title through gift

• Transfer of title for token consideration

• Transfer of title for a price exceeding the residual value, thus making a profit

• Transfer of title through gradual sale of leased asset:

Which of the following is not an example of the application of Ijarah in the Islamic finance industry?

• Sukuk Al Ijarah

• Ijarah micro finance partnership

• Islamic Real Estate Investment Trust (IREIT)

• Ijarah for car financing