Document Details

Document Type : Article In Journal 
Document Title :
Profit and Loss Allocation among Islamic Bank and Client Partner in Equity Financing: Practice, Precepts and Alternatives
توزيع الأرباح والخسائر بين المصارف الإسلامية وعملاء تمويل المشاركة: المنطق والمفاهيم والبدائل
 
Subject : Profit and Loss Allocation 
Document Language : English 
Abstract : Abstract. The profit sharing ratio in equity financed projects is decided by Islamic banks mainly through applying the relevant rate of return on capital. After first determining the return sought by the bank, the remainder of the expected profit is usually taken as the share of the joint partner, and the proportion adopted as the profit sharing ratio. Ideally, the profit sharing ratio should be decided through a mutual process considering the contributions of both partners, with due recognition of the level of liability each had borne. The period, as a factor common to the joint venture, could be redundant. Hence, the profit sharing ratio should be reflective of the capital and labour outlay of both the bank and the client, to the extent possible. In view of the socio-economic function expected of Islamic banks, the method for profit ratio calculation adopted should adequately consider the actual contributions of both partners. Two bases possible are giving capital and labour of both partners equal weightage, and giving capital a weightage different from labour. 
ISSN : 1018-7383 
Journal Name : Islamic Economics Journal 
Volume : 22 
Issue Number : 1 
Publishing Year : 1430 AH
2009 AD 
Article Type : Article 
Added Date : Saturday, November 6, 2010 

Researchers

Researcher Name (Arabic)Researcher Name (English)Researcher TypeDr GradeEmail
محمد عبدالرحمن صادقSadique, Mohammad AbdulrahmanResearcherDoctorateabdmsm@yahoo.com

Files

File NameTypeDescription
 27898.pdf pdfProfit and Loss Allocation among Islamic Bank and Client Partner in Equity Financing: Practice, Precepts and Alternatives

Back To Researches Page