An income determination model for income sharing investment companies (Ph.D. Dissertation)

This dissertation presents an income determination model for income-sharing investment companies in Islamic countries, and utilizes a literature review of economic and accounting theories. Techniques used for measurement, allocation, and distribution of income were obtained in a field study of four income sharing firms. Investment institutions that are comparable to income sharing firms were also studied, and mutual funds and real estate investment trusts were reviewed to illustrate some of the problems facing income sharing firms. The income determination model advocates the recognition of unrealized capital gains/losses to the equities of shareholders and depositors. Shareholders should receive a greater share of income because of the higher risks they take on. Based on the model, depositors' income should be redistributed quarterly, with appropriate adjustments to account for possible differences between quarterly and annual results. In these income sharing systems a conflict of in