Mudharaba agreement illustrations
MUDHARABA
YEAR I
MAY 1
Mr A made mudharaba agreement with Mr B. The duration of mudharaba is 3 years since the date. A agreed to give Rp 50 millions and a land with building on it which has a carrying value of Rp 50 mill and Rp 100 mill, respectively. The fair values for those assets were Rp 100 mill and Rp 175 mill. B would install the payment through 3 annual installments. Nisbah 40% : 60% for A : B.
May 2
The building was broken by thief and be repaired by Rp 25 mill.
May 3
All of the assets were submitted to B
December 31
B reported Net Income of Rp 30 mill. B returned 100 mill to A. A consider there would be bad debt risk of Rp 20 mill.
YEAR 2
Jan 5
B paid last year profit sharing.
Dec 31
B reported Net loss of 5 mill. B returned 100 mill to A. A added its allowance for doubtful MI by 3 mill.
YEAR 3
At the end of mudharaba agreement, B reported Net Income of Rp 20 mill incl. loss of 5 mill (B’s mistake). B returned all of Mudharaba fund by 118 mill and B then going on bankruptcy.
MUDHARABA MUSYTARAKA
YEAR I
MAY 1
Mr A made mudharaba agreement with Mr B. The duration of mudharaba is 3 years since the date. A agreed to give Rp 50 millions and a land with building on it which has a carrying value of Rp 50 mill and Rp 100 mill, respectively. The fair values for those assets were Rp 100 mill and Rp 175 mill. B also invest into the business by sharing Rp 175mill. Nisbah between shahibul maal and mudharib 50% : 50% for A : B.
All of the assets were submitted to B
December 31
B reported Net Income of Rp 30 mill. A consider there would be bad debt risk of Rp 20 mill.
YEAR 2
Jan 5
B paid last year profit sharing.
Dec 31
B reported Net loss of 5 mill. A added its allowance for doubtful MI by 3 mill.
YEAR 3
At the end of mudharaba agreement, B reported Net Income of Rp 20 mill incl. loss of 5 mill (B’s mistake). B returned all of Mudharaba fund by 118 mill and B then going on bankruptcy.
