The valuation of an asset at fair value (i.e., without selling, or dispose of, it). For example, mudaraba capital provided by rab ul-mal in kind (trading assets or non-monetary assets for use in the mudaraba business) is typically measured at the fair value of the assets as agreed between rab ul-mal and al-mudarib. Also, if a short-term mudaraba contract is scheduled to be rolled over, then there can be periodic liquidation depending on the principle of tandid hukmi to see if a profit has materialized. However, in the case of sharika, the profit can be distributed on the basis of tandid haqiqi or tandid hukmi, depending on whether the musharaka assets are disposed of or kept on the venture’s books.

Tandid hukmi is an Arabic term (تنضيض حكمي) that translates as constructive valuation or simulated liquidation.