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Difference Between Sukuk and Bonds

Sukuk are financial instruments and certificates of equal value representing undivided shares in ownership of tangible assets/ projects/ usufructs/ services/...

Difference Between Zakah and Tax

Zakah (زكاة) is Arabic for obligatory charity (the third pillar of Islam). It constitutes a portion of wealth prescribed by...

Accounting Treatment for Purchase Undertaking in Sukuk

Purchase undertaking in sukuk is an undertaking (binding promise- wa'ad mulzim) by either the issuer of sukuk or the manager...

Closing Out a Currency Swap

A currency swap entails the exchange of two series of payments and two notional principal amounts each denominated in a...

Closing out a Forward Contract

A forward contract is the simplest type of derivatives, as it constitutes a future-delivery sale transacted today. Once the contract...

Salam In Currencies

Salam is a type of sale (ba’i) in which the price (the capital of salam) is paid in advance while...

Applications of Murabaha

Murabaha (also spelled murabahah) is a shari’a compatible mode of debt financing which involves the sale of a commodity mostly...

Rebate on Early Payment in Murabaha

Murabaha (also spelled murabahah) is a shari’a compatible mode of debt financing which involves the sale of a commodity mostly...

Gearing in Futures

In the realm of finance, gearing (or leverage) has both its advantages and disadvantages. As far as derivatives are concerned,...

Forward Contract Valuation

A forward contract has no value at the time it is first entered into (i.e., its net present value is...