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Unformatted text preview: Ijarah is a contract in which the Ban buys and rents a productive aset to a person short o unds and in ned o that aset. Diminishing Mushara a represents an aset in joint ownership whereby a partner promises to buy the equity share o the other partner until the title to the equity is totaly trans ered to him. Mushara a / Modaraba are di erent types o partnerships in busines with distribution o pro it in agred ratio and distribution o los in the ratio o capital invested. 6.4 Inv tm nt The management determines the apropriate clasi ication o its investments at the time o purchase and clasi ies these investments as held- or-trading, available- or-sale or held-to- maturity. These are initialy recognised at cost. 27 H ld-for-trading These are securities which are either acquired or generating pro it rom short-term luctuations in mar et prices or dealer's margin or are securities included in a port olio in which a patern o short-term pro it ta ing exists. H ld-to-maturity These are securities with ixed or determinable payments and ixed maturity that the Ban has the positive intent and ability to hold to maturity. Availabl -for- al These are investments that do not al under the held- or-trading or held-to-maturity categories. In acordance with the requirements o the SBP, quoted securities other than those clasi ied as held-to-maturity and investments in subsidiaries and asociates, i any, are stated at mar et value. Investments in subsidiaries, asociated and joint venture companies are stated at cost. Provision is made or any impairment in value. Surplus / (de icit) arising on revaluation o the Ban 's held- or-trading investment port olio is ta en to the pro it and los acount. The surplus / (de icit) arising on revaluation o quoted securities clasi ied as available- or-sale is ept in "Surplus / De icit on Revaluation o Securities acount" and is shown in the balance shet below equity. The surplus / (de icit) arising on these securities is ta en to the pro it and los acount when actualy realised upon disposal. Provision or diminution in the value o securities (except debentures, su u s, participation term certi icates and term inance certi icates) is made a ter considering impairment, i any, in their value. Provision or diminution in value o debentures, su u s, participation term certi icates and term inance certi icates are made in acordance with the requirements o the Prudential Regulations isued by the SBP. Pro it and los on sale o investments is recognised in the period o sale. 6.5 Op rating fix d a t 6.5.1 Prop rty and uipm nt Property and equipment are stated at cost les acumulated depreciation and impairment, i any, except rehold land and capital wor -in-progres which are stated at historical cost. Depreciation is computed using the straight-line method by ta ing into consideration the estimated use ul li e o the related asets. Depreciation on aditions / deletions during the year is charged or the proportionate period or which the aset remained in use. Maintenance and normal repairs are charged to income as and when incured. Major renewals and improvements,normal repairs are charged to income as and when incured....
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- Fall '11