If the supplier offers a discount, will the profit rate decrease?

If the supplier grants a discount related to the purchase of the asset, the timing of the discount is important.

Key points

• Ask the bank whether the discount was granted before or after determining the cost of the profit and the selling price, and request documentation of the cost if the discount is substantial.

• The goal is to ensure that the purchase cost upon which the profit is based is clear.

The figures, fees and limits in this answer vary by bank and change over time — confirm them with your bank or the official source before acting.

Source

• AAOIFI — Sharia Standard 8: Murabahah