Filter by Categories
Accounting
Banking

Islamic Finance




Product Khiyar


A type of khiyar (option) that constitutes, by nature and structure, a full-fledged Islamic finance arrangement which is used as a product, per se. It is a stand-alone product that is not made part of a broader structure (i.e., it not ancillary or supplementary to a host contract). It may also be used for hedging purposes (purely as a risk management product). A product khiyar may come in the guise of a single transaction or a series of transactions, whether at present time or in the future.

An example of product khiyar is khiyar al-faskh or an option for revocation of a contract (such as a sale contract- aqd al-ba’i), whether associated with arboun or not. It may also take the form of a permissible repurchase transaction (repo), that is structured on the basis of khiyar.

In terms of accounting effect, this khiyar (as opposed to a ancillary khiyar) gives rise to an asset or liability on the balance sheets of the parties involved.



ABC
The last three decades have witnessed the modern rebirth of Islamic finance both in terms of literature and practice. Islamic banks and ...
Watch on Youtube
Remember to read our privacy policy before submission of your comments or any suggestions. Please keep comments relevant, respectful, and as much concise as possible. By commenting you are required to follow our community guidelines.

Comments


    Leave Your Comment

    Your email address will not be published.*