Two parties decided to construct a commercial building. Party A will invest SAR 1,500,000, and Party B

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Two parties decided to construct a commercial building. Party A will invest SAR 1,500,000, and Party B will invest SAR 850,000.

Both parties agreed that profit and loss will be shared in proportion of the equity each partner holds. In addition, Party A also agreed to purchase the equity share of Party B over a period of five years. At the end of each year, Party A will make a payment of SAR 170,000 to acquire equity from Party B. This is an example of which type of contract.

a. Constant Musharakah

b. Diminishing Musharakah

c. Multi-period constant Musharakah

d. Single-period diminishing Musharakah

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Related Book For  book-img-for-question

Financial Reporting For Islamic Financial Institutions Accounting Standards Interpretation And Application

ISBN: 9781032464022

1st Edition

Authors: Abdul Rauf Mahar, Ayesha Bhatti, Muhammad Junaid Ashraf, Asfand Zubair Malik

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