One of the joint owner of an asset can lease his

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One of the joint owner of an asset can lease his proportionate share to his co-sharer only, and not to any other person. 8. Leased Asset to be Properly Identified It is necessary for a valid lease that the leased asset is fully identified by the parties. 8 Ijarah
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Basic Rules of Leasing 9. Determination of Rental The rental must be determined at the time of contract for the whole period of lease. Step Down or Step Up Rentals Different amounts of rent can be fixed for different phases during the lease period, provided that the amount of rent for each phase is specifically agreed upon at the time of effecting a lease. The determination of rental on the basis of the aggregate cost incurred in the purchase of the asset by the lessor is allowed. The lessor cannot increase the rent unilaterally, and any agreement to this effect is void. 9 Ijarah
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Basic Rules of Leasing 9. Determination of Rental Advance Rentals The rent or any part thereof may be payable in advance before the delivery of the asset to the lessee, but the amount so collected by the lessor shall remain with him as 'on account' payment and shall be adjusted towards the rent after its being due. Means that rentals cannot be charged if the leased asset has not been delivered to the client i.e., booking of a vehicle. The lease period shall commence from the date on which the leased asset has been delivered to the lessee, no matter whether the lessee has started using it or not. 10 Ijarah
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Basic Rules of Leasing 10. Termination of Lease Contract Due to Loss of Usability If the leased asset has totally lost the function for which it was leased, and no repair is possible, the lease shall terminate on the day on which such loss has been caused. 11 Ijarah
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IAS 17 Accounting for Leases A lease is classified as a finance lease if it transfers substantially all the risks and rewards incident to ownership. All other leases are classified as operating leases. Situations that would normally lead to a lease being classified as a finance lease include the following: [IAS 17.10] the lease transfers ownership of the asset to the lessee by the end of the lease term; the lessee has the option to purchase the asset at a price which is expected to be sufficiently lower than fair value at the date the option becomes exercisable that, at the inception of the lease, it is reasonably certain that the option will be exercised; the lease term is for the major part of the economic life of the asset, even if title is not transferred; at the inception of the lease, the present value of the minimum lease payments amounts to at least substantially all of the fair value of the leased asset; and the lease assets are of a specialized nature such that only the lessee can use them without major modifications being made. 12 Ijarah
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Ijarah Vs Conventional Financial Leasing 1. Commencement of Lease. The commencement of lease only on delivery of asset to lessee. Different relations of the parties in case the lessor has appointed the lessee as agent to purchase the asset.
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