Q3 : ZAKAT FOR COMPANY/ BUSINESS

Trading only

RM RM Notes

NET WORKING CAPITAL METHOD: net asset approach

Current Assets

(-) Current Liabilities

NET ASSET

NET GROWING CAPITAL METHOD: net invested fund

Owners’ equity

Non current liabilities

(-)
● NCA
● Investment in subs co

NET ASSET

(-) Adjustment: (Non-Trading only)

Operating Liabilities: Benefits have been obtained, but payment has yet to be
● Trade payables made
● Wages/salaries payable
● Rent payable
● Tax payable
● Utilities
● Quit rent accrued

Prepayment/ Advance Payment/ Deposit/ Prepaid: Assets that do not qualify as having full ownership by
● Prepaid miscellaneous exp owner bcs owner cannot utilize the monies to generate
● Advance rental payments activities
● Deposits for utilities/ secure facilities
● Long term financing due

Stock/ Inventories: Asset that are not ready for sale/ trading
● Raw materials (supplier to others kena tolak)
● WIP
● Supplies
● Packing materials
● Non received inventories Not a current year’s asset
● Finished Good with personal consumption Do not inc inventories that are similar to liquid monetary
● Obsolete/ slow moving stock/ stock for long term sale assets (trade investment in capital mkt)

Bad Debt/ Doubtful Debt: Highly probably that debtors will not be able to clear their
● Doubtful debt account receivables. Consider as expense & incomplete
● Allowance for doubtful debt ownership
● Provisions for DD (% provision x (trade rec - non trade/
uncollectable debt) Should've deduct against trade rec to get net trade rec
● Non trade debtor
● Uncollectable debt
 Welfare/ Charity/ Social Responsibility Funds: The funds are not used to generate profit in the business
● All welfare funds activities

Interest Income: Shari’ah does not permit interest/ Non-shariah

● Interest from conventional banking
● Fixed deposit interest
● Interest receive from under lien
● Collateral under lien

NCA Assets are not acquired for sale/ profit and trading
● Property, Plant, Equipment, Furniture & Fixtures, Office purposes but to assist the business (productive assets)
Equipment, Land Building
● Long term trading -interest overdue

Investment Assets: Exc because purpose having these assets only to gain
● Investment dividend
● Unit trusts
● Securities in other companies
● Valuable papers
● Marketable securities (only part of al-mustagallat)
● Foreign loss

Dividend Income:
● Dividend income received from zakat paying subsidiaries Double payment of zakat from same source
● Investment securities consider as al-mal al mustaghallat
● Div receive but part of a-musthagllat

(+) Adjustment: (Non-Trading only)

Financial Liabilities: These items are recorded for the following year’s
● Loans activities but zakat is calculated for current year’s
● Bonds operation. So, added back.
● Notes payable due to deferred payment to supplier
● Overdraft
● Financial leases
● Short term loan/ trade financing
● Hire purchases
● Borrowed short term finance to buy asset and inc in trade
payables (yg sepatutnya tolak so added back)

Trade Receivable: Should've deduct against trade rec to get net trade rec
● Stock in trade sold in credit
Dah tolak kat atas

Dividend Income:
● Dividend income from non-paying zakat companies
● Dividend received from approved shariah investment in
marketable securities (no need adjustment if credited to
bank oredy)
● Dividend payable - div for co is calculated at gross and
not yet zakatable

NCA:
● Exploited Assets
○ Assets to be rented/ leased out
● Disposal of NCA (sale of NCA) Gain arise from sale will be converted to cash

Investment Assets:
● Dividend received by
○ Not part of exploited assets (al-mustaghallat)
○ Shares similar to exploited asset (only div)
○ Shares are intended for shares trading Zakat based on urdu al tijarah (mv)
● Proposed div (div declared & paid)
 Recover/ Received/ OL
● Recover debt (no need add back if inc in cash)
● Deposit received
● Deferred tax -outstanding tax from previous year
● Rental income received in advance
● Tax provisions

Accrual account (non trade/ non operational activities)

● Non trade payable
● Amt due to director
● Cash in hand inc foreign currency (c/d value - b/d value)
●

Zakatable amount

Zakat due by ALL ( x 2.5%)

Zakat due by Muslim S/H (%)

Q5 : ZAKAT FOR ISLAMIC BANKS

Trading only

a) Net Assets Approach (Assets - Liabilities & Equity)

Assets subjects to zakat RM RM Notes

ASSETS:

Cash & cash equivalent SOFP/ CEV

(-) Employee’s welfare fund (net after deduct)

Receivables (net) SOFP/ CEV

(-) Provision (net after deduct)
Allowance on doubtful debts

Bai’ Salam/ Ijarah Thumma Bai’/ Ijarah/ Musyarakah Financing SOFP/ CEV

Marketable securities/ Inventory (trade) CEV

Sukuk CEV

Real estate CEV

Others Investments CEV

Investments CEV (deduct non trade)

(-) LIABILITIES:

Current Accounts SOFP/ BV

Payables SOFP/ BV

Others Liabilities SOFP/ BV

Equity owned by gov Add info/ BV

Minority interest SOFP/ BV

Equity unrestricted investment acc holders SOFP/ BV

Income from gharar investment (dividend) Add info

Statutory deposits BV

Late payment charged Add info

Zakat base

Zakat payable (xx x 2.5%)

 b) Net Invested Funds Method (Liabilities & Equity - Asset)

Assets subjects to zakat RM RM Notes

Total owners equity SOFP

(-) equity owned by gov (net after deduct)

(+)

Difference btw CEV & SOFP (CEV-HISTORICAL/BV) -trade only Except non trade
+ = add
Tolak dulu baru darab trade % - = minus

Long term liabilities/ Total liabilities if Non current liabilities takda SOFP

Provisions for investment risk SOFP

(-)

Investment not for trade -not growing CA/ SOFP/ Book value

Assets for rent SOFP

Fixed Assets (net) SOFP

Dividend from gharar investment -non halal Add info

Late payment charge Add info

Employee welfare SOFP

Statutory deposit SOFP/ BV

Zakat base

Zakat payable (xx x 2.5%)