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WorksheetsIjarah Financing
Total questions: 11
Worksheet time: 6mins
Ijarah Muntahiah Bittamleek can be classified into
3 types
2 types
1 type
4 types
The word Ijarah comes from the root word Ajr which mean
lease
reward
hire
work
Technically, Ijarah is
the lump-sum payment done to own an asset
to lend an asset to someone
the right to the benefit to use an asset for a consideration
to buy an asset through instalment basis
The following are the elements of Ijarah except
2 witnesses
Offer & Acceptance
Lessor & Lessee
Object of the contract
The following are the obligation of Lessor except
Making the leased asset available
Guarantee in respect of defect
Rental payment and safeguard the asset
Maintenance of the leased asset
For Operating Ijarah, the ownership of the asset
will be sold at the end of the lease period to the lessee
will be given free of charge at the end of lease period to the lessee
can be transferred to the lessee
cannot be transferred to the lessee
Ijarah Muntahiah Bittamleek can be done through these methods except
free / gift
token price
gradual transfer
sale in the beginning of the lease period
Under the book of lessor, Operating Ijarah is presented as
Operating Ijarah expense
Operating Ijarah revenue
Ijarah Muntahiah Bittamleek Asset
Investment in Ijarah Asset
Any repair or maintenance of the leased asset should be born by
Lessor
Lessee
Takaful company
Customer
For Al- Ijarah Thumma Al-Bai, the Sell/ Purchase agreement is executed
after one year of the hire agreement done
during the hire period
before the hire agreement done
upon settlement of the hire rentals
To recognise AITAB, the double entries are
Dr AITAB, Cr Cash, Cr Unearned Income
Dr AITAB, Cr, Asset
Dr AITAB, Cr Asset, Cr Unearned Income
Dr AITAB, Cr Cash
