Page 84 - ICD AR21 EN

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
(CONTINUED)
of the Wakala agreement. However, the Wakeel bears the loss in cases of misconduct, negligence or violation of any of the terms of the Wakala agreements.
Murabaha
Murabaha financing receivables are agreements whereby the Corporation sells to a customer a commodity or an asset, which the Corporation has purchased and acquired based on a promise received from the customer to buy.
Installment sales financing
Installment sale financing is a sale agreement where repayments are made on an installment basis over a pre-agreed period. The selling price comprises the cost plus an agreed profit margin without requirement of disclosing the actual cost.
Ijarah Muntahia Bittamleek
These consist of assets purchased by the Corporation either individually or as part of syndication with other entities and leased to beneficiaries for their use in Ijarah Muntahia Bittamleek agreements whereby the ownership of the leased assets is transferred to the beneficiaries at the end of the lease term after the completion of all payments under the agreement. The transfer of asset’s ownership may take place through transfer of control (entailing risks and rewards incidental to ownership of such assets) under a separate form of contract as follows:
- Contract of Sale: after the end of the Ijarah term; or
- Contract of gift” after the end of the contract term; or
- Contract of sale of proportionate ownership during the Ijarah term.
Istisna’a assets
Istisna’a is an agreement between the Corporation and a customer whereby the Corporation sells to the customer an asset which is either manufactured or acquired by the purchaser on behalf of the Corporation according
to agreed-upon specifications, for an agreed-upon price. After completion of the project, the Istisna’a asset is transferred to the Istisna’a receivable account.
Investments
The Corporation’s investments are categorised as follows:
i) Subsidiaries
An entity is classified as a subsidiary if the Corporation can exercise control over the entity. Control is power to govern the financial and operating policies of an entity with the objective of earning benefits from its operation. Control is presumed to exist if the Corporation holds, directly or indirectly through its subsidiaries, 50 per cent or more of the voting rights in the entity, unless it can be clearly demonstrated otherwise. Conversely, control may also exist through agreement with the entity’s other members or the entity itself regardless of the level of shareholding that the Corporation has in the entity.
82 ICD ANNUAL REPORT 2021