Unit buy-out price (diminishing musharakah)
The price at which a customer buys the bank's units in a diminishing musharakah: market value or a price agreed at the time.
In a diminishing musharakah, the customer gradually buys the bank's share of the asset in units. AAOIFI's partnership standard allows a partner to give a binding promise to buy the other's share gradually at market value or at a price agreed at the time of each purchase, but does not permit stipulating that the units will be bought at their original or face value, because that would guarantee the bank's capital. Each unit sale is also to be independent of the partnership contract, so pricing and the timing of each purchase need their own records.
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This entry explains a term; it is not a Shariah ruling. Approving a product is for each institution's own Shariah board and regulator.