The Practice of Istishna’ Accounting in Indonesia

Abstract

The musyarakah contract is a form of cooperation in the Islamic financial system that involves two or more parties to combine capital in a business under the principle of profit sharing. This study discusses the basic concept of musyarakah, its legal basis, the pillars of the contract, the types of musyarakah, as well as implementation and supervision standards based on sharia provisions and financial regulations in Indonesia. Furthermore, this study also describes the transaction flow, calculation techniques, and profit sharing mechanisms in musyarakah financing, using both revenue sharing and profit sharing approaches. The findings in the discussion indicate that the implementation of the musyarakah contract is based on the principles of fairness, transparency, and proportional risk sharing based on the capital contribution of each party. Supervision is carried out by the Sharia Supervisory Board (DPS) and the bank through on-site and off-site mechanisms to ensure compliance with sharia principles. The case study presented demonstrates the application of profit and loss sharing calculations that reflect the agreed ratio and capital portion. Overall, the musyarakah contract is a sharia financing instrument that is considered capable of supporting the development of partnership-based businesses while maintaining the values of fairness and sharia compliance.