Zakat and Accounting Valuation Model
DOI:
https://doi.org/10.6000/1929-7092.2016.05.02Keywords:
Zakat, Valuation, Accounting Models, ShariahAbstract
The valuation and measurement of assets with regard to Zakat is necessary issue from Islamic perspective. Therefore, re-value the assets regularly is needed and Islamic accounting system probably uses both historical and market selling prices with regard to enable firms to accommodate contracts and to discharge with social responsibility. Zakat accounting includes the accounting principles that relate not only to measurement and valuation but also recording, interpreting, presentation and disclosure of accounting information. Thus, the main objective of this paper is to elaborate the importance of Islamic accounting valuation adopted in zakat regard to accounting models. The application and mechanics of zakat and valuation model discussed related to the implementation of the current practices of accounting and valuation models that adopted in Islamic firms.
References
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Abidin, S & Saad, R (2014) Evaluating Corporate Reporting on the Internet: The Case of Zakat Institutions in Malaysia. Jurnal Pengurusan 42(2014) 19 – 29
http://dx.doi.org/10.17576/pengurusan-2014-42-03
Abdullah, A., & Muhammad, J. (2013). Ethical values in Islamic financial planning. Jurnal Pengurusan (UKM Journal of Management), 38
Accounting Standards Steering Committee. 1975. The Corporate Report. London.
Al-Gaoud, L. M. and M. K. Lewis. 1997. The Bahrain Financial Centre: Its present and future role in Islamic financing. Accounting, Commerce & Finance: The Islamic Perspective. 1, No. 2: 43-66.
Ahmad, W., & Marhaini, W. (2012). Zakat investment in Malaysia: a study of contemporary policy and practice in relation to Shari'a.
Ammani, S. A., Abba, S. A., & Dandago, K. I. (2014). Zakah on employment income in Muslims majority states of Nigeria: Any cause for alarm?.Procedia-Social and Behavioral Sciences, 164, 305-314.
http://dx.doi.org/10.1016/j.sbspro.2014.11.081
Awang, R., & Mokhtar, M. Z. (2011). Technical Comparison between Business Zakat and Tax on Business Income in Malaysia. Malaysian Accounting Review, 10(2), 13-25.
Awang, R. N., & Mokhtar, M. Z. (2012). Comparative Analysis of Current Values and Historical Cost in Business Zakat Assessment: An Evidence from Malaysia. International Journal of Business and Social Science, 3(7).
Bakar, N. B. A. (2007). A zakat accounting standard (ZAS) for Malaysian companies. American Journal of Islamic Social Sciences, 24(4), 74.
Bakar, N. B. A. (2008). Zakat and Taxation: A conceptual Comparison.TAFHIM: IKIM Journal of Islam and the Contemporary World, 2(3).
Ball, R. 1988. ""The firm as a specialist contracting intermediary: Application to accounting and auditing"". Unpublished manuscript. University of Rochester.
Baydoun, N. and R. Willett. 1997. Islam and accounting: Ethical issues in the presentation of financial information. Accounting, commerce & Finance: The Islamic Perspective. Vol.1, No.1 [June]: 1-25.
Chambers, R. J. 1966. Accounting, Evaluation, and Economic Behavior. Englewood Cliffs, N.J.: Prentice-Hall.
Clarke, F, R. Craig and S, Hamid. 1996. Physical assets valuation and Zakat: Insights and implication. Advance in International Accounting 9.
Coase, R. 1937. The nature of the firm. Economica. 4 [November]: 386-405.
http://dx.doi.org/10.1111/j.1468-0335.1937.tb00002.x
Embong, M. R., Taha, R., & Nor, M. N. M. (2013). Role of zakat to eradicate poverty in Malaysia. Jurnal Pengurusan (UKM Journal of Management), 39.
Firdaus, M., Beik, I. S., Irawan, T., & Juanda, B. (2012). Economic estimation and determinations of Zakat potential in Indonesia. Jeddah: Islamic Research and Training Institute.
Frankel, R., M. McNichols, and G. P. Wilson. 1995. Discretionary disclosure and external financing. The Accounting Review. 70 [January]: 135-150.
Gambling, T. E. and R. A. A. Karim. 1986. Islam and ‘Social accounting’. Journal of Business Finance & Accounting. 13 (1): 39-50.
http://dx.doi.org/10.1111/j.1468-5957.1986.tb01171.x
Gambling, T. E. and R. A. A. Karim. 1991. Business and Accounting, Ethics in Islam. London: Mansell Publishing Co.).
Gray, R., D. Owen, and K. Maunders. 1987. Corporate social reporting: Accounting and accountability. Prentice-Hall International.
Haliding, S. (2015). The Critical Aspect on Fair Value Accounting and its Implication to Islamic Financial Institutions. Global Review of Islamic Economics and Business, 1(3).
Hameed, S., Ibrahim, M., & Rizal, Y. (2005). The emerging issues on the objectives and characteristics of Islamic accounting for Islamic business organizations.
Hameed, S. (2010). Islamic Accounting–A Primer. Akauntan Nasional (Currently Accountants Today) Jan-Feb, (2003), 93.
Hamid, S.; R. Craig and F. Clarke. 1993. Religion: A confounding cultural element in the international harmonisation of accounting? ABACUS. 29, No. 2: 131-148.
http://dx.doi.org/10.1111/j.1467-6281.1993.tb00427.x
Haniffa, R., & Hudaib, M. (2014). 12. The Islamic accounting triangle: measurement, disclosure and enforcement. Handbook on Islam and Economic Life, 227.
Haniffa, R., Hudaib, M., & Mirza, A. M. (2004). Accounting Policy Choice within the Shariah Islamiiah Framework. Discussion Papers In Accountancy And Finance, SOBE, University Of Exeter, 2, 4-19.
Healy, P. M. and K. G. Palepu. 1993. The effect of firms' financial disclosure strategies on stock prices. Accounting Horizons. 7 [March]: 1-11.
Healy, P.; K. Palepu; and A. Sweeney. 1995. Causes and consequences of expanded voluntary disclosure. [June]: Unpublished paper, MIT Sloan School of Management.
Hussein, H. S. 1986. Financial intermediation in the framework of Shariah. IDB – IRTI Seminar on Developing a System of Islamic Financial Instruments.
Ibrahim, S. H. M., Wirman, A., Alrazi, B., Nor, M. N. B. M., & Pramono, S. (2004, April). Alternative Disclosure & Performance Measures For Islamic Banks. In Second Conference on Administrative Sciences: Meeting the Challenges of the Globalization Age, King Fahd University of Petroleum & Minerals, Dhahran, Saudi Arabia (pp. 19-21).
Ibrahim, A., Abdullah, A. A., Kadir, M. R. B. A., & AdwamWafa, S. M. G. W. S. (2012). Assessing Financial Reporting on adopting Business Zakat Guidelines on Malaysian Government Linked Companies. International Journal of Business and Social Science, 3(24).
Islamiyah, N., Ridho, A. F., & Muslih, M. R. (2015) Optimizing the Role of Accounting through the Statement of Value Added Approach to Increase the Transparency of Reporting Islamic Financial Institutions in Indonesia
Ismail, A. G., Tohirin, A., & Ahmad, M. A. J. (2015). Debate on Policy Issues in the Field of Zakat on Islamic Bank Business (No. 1435-3). The Islamic Research and Teaching Institute (IRTI).
Ibrahim, A., Kadir, A., Rizuan, M., & Abdullah, A. A. (2013). Perception of Accounting Practitioners on MASB TRi. International Journal of Humanities and Social Science, 3(2), 1-7.
Jensen, M. C. and W. H. Meckling. 1976. Theory of the firm: Managerial behaviour, agency costs and ownership structure. Journal of Financial Economics. 3 [October]: 305-60.
http://dx.doi.org/10.1016/0304-405X(76)90026-X
Johari, F., Ali, A. F. M., AbAziz, M. R., & Ahmad, N. (2014). The Importance of Zakat Distribution and Urban-Rural Poverty Incidence among Muallaf (New Convert). Asian Social Science, 10(21), 35.
http://dx.doi.org/10.5539/ass.v10n21p42
Karim, R. A. A. 1995. The nature and rationale of a conceptual framework for financial reporting by Islamic banks. Accounting and Business Research. 25, No. 100: 285-300.
http://dx.doi.org/10.1080/00014788.1995.9729916
Khan, F. 1986. Discounting for time value: An Islamic perspective. Mimeo, International Institute of Islamic Economics, Islamabad, Pakistan.
Khan, L. A., & Ramadan, H. M. (2011). Contemporary ijtihad: Limits and controversies. Edinburgh University Press.
Lieber, A.E. 1968. Eastern business practices and medieval commerce. Economic History Review. 21, No. 2.
http://dx.doi.org/10.2307/2592433
Littleton, A. C. and V. K. Zimmerman. 1962. Accounting Theory: Continuity and Change. Englewood Cliffs, New Jersey: Prentice-Hall.
Mirza, A. M. 1991. Social reporting and managers’ self-interest. Accounting Research Journal. 7-17.
Mirza, M., & Baydoun, N. (1999). Accounting policy choice in an interest-free environment. In The Islamic Perspective International Conference m in Jakarta, Indonesia (pp. 15-18
Paton, W. and A.C. Littleton. 1940. An Introduction to Corporate Accounting Standards. Florida: American Accounting Association.
Rahman, A. R. A. (2010). Introduction to Islamic Accounting Theory and Practice. Cert Publication, Kuala.
Rahman, A. A., & Bukair, A. A. (2013). The influence of the Shariah supervision board on corporate social responsibility disclosure by Islamic banks of Gulf Co-operation Council countries. Asian Journal of Business and Accounting, 6(2).
Richardson, G. D. 1996. “The striking robustness of theories of voluntary disclosure for explaining corporate disclosure choices in prospectuses, annual reports and other OSC filings”. Unpublished paper, University of Waterloo, September, 1996.
Sarif, S. (2014). Income generation through zakat: the Islamization impact on Malaysian religious institution.
Segrado, C. (2005). Case study “Islamic microfinance and socially responsible investments”. Italy: MEDA Project
Shafii, Z., & Zakaria, N. (2013). Adoption of International Financial Reporting Standards and International Accounting Standards in Islamic Financial Institutions from the Practitioners’ Viewpoint. Middle-East Journal of Scientific Research (Research in Contemporary Islamic Finance and Wealth Management, 13(1), 42-49
Siddiqi,. M. N. 1981. Muslim Economic Thinking: A survey of contemporary literature. The Islamic Foundation, United Kindgom.
Sprouse, R. T. 1987. The case for financial accounting standards. Accounting Horizons. [June]: 83-86.
Sulaiman, M. (2001). Testing a model of Islamic corporate financial reports: some experimental evidence. International Journal of Economics, Management and Accounting, 9(2).
Sulaiman, M. (2003). The influence of riba and zakat on Islamic accounting.Indonesian Management and Accounting Review, 2(2), 149-167.
Sulaiman, M. (2001). Testing a model of Islamic corporate financial reports: some experimental evidence. International Journal of Economics, Management and Accounting, 9(2).
Talib, A. A., and T. S. Phay. 1998. The Islamic economic system and riba: The foundation of Islamic banking. Accounting, Commerce & Finance: The Islamic Perspective Journal. 2, No. 3: 51-82.
Tomkins. C. and R. A. A. Karim. 1987. The Shari’ah and its implications for Islamic financial analysis: An opportunity to study interactions among society, organisation, and accounting. American Journal of Islamic Social Sciences. 4, No. 1: 101-115.
Usmani, M. I. A., & Qazi, B. A. (2010). Guide to Zakah: Understanding and Calculation.
Wartick, S.L. and P.L. Cochran. 1985. The evolution of the corporate social performance model. Academy of Management Review. 10, No. 4.
Yaya, R., & Hameed, S. (2004). Objectives and Characteristics of Islamic Accounting: Percepation of Muslim Accounting Academician in Yogyakarta, Indonesia. In International Conference Pan Pacific
Zaid, O. A. (2004). Accounting systems and recording procedures in the early Islamic state. The Accounting Historians Journal, 149-170.
Abidin, S & Saad, R (2014) Evaluating Corporate Reporting on the Internet: The Case of Zakat Institutions in Malaysia. Jurnal Pengurusan 42(2014) 19 – 29
http://dx.doi.org/10.17576/pengurusan-2014-42-03
Abdullah, A., & Muhammad, J. (2013). Ethical values in Islamic financial planning. Jurnal Pengurusan (UKM Journal of Management), 38
Accounting Standards Steering Committee. 1975. The Corporate Report. London.
Al-Gaoud, L. M. and M. K. Lewis. 1997. The Bahrain Financial Centre: Its present and future role in Islamic financing. Accounting, Commerce & Finance: The Islamic Perspective. 1, No. 2: 43-66.
Ahmad, W., & Marhaini, W. (2012). Zakat investment in Malaysia: a study of contemporary policy and practice in relation to Shari'a.
Ammani, S. A., Abba, S. A., & Dandago, K. I. (2014). Zakah on employment income in Muslims majority states of Nigeria: Any cause for alarm?.Procedia-Social and Behavioral Sciences, 164, 305-314.
http://dx.doi.org/10.1016/j.sbspro.2014.11.081
Awang, R., & Mokhtar, M. Z. (2011). Technical Comparison between Business Zakat and Tax on Business Income in Malaysia. Malaysian Accounting Review, 10(2), 13-25.
Awang, R. N., & Mokhtar, M. Z. (2012). Comparative Analysis of Current Values and Historical Cost in Business Zakat Assessment: An Evidence from Malaysia. International Journal of Business and Social Science, 3(7).
Bakar, N. B. A. (2007). A zakat accounting standard (ZAS) for Malaysian companies. American Journal of Islamic Social Sciences, 24(4), 74.
Bakar, N. B. A. (2008). Zakat and Taxation: A conceptual Comparison.TAFHIM: IKIM Journal of Islam and the Contemporary World, 2(3).
Ball, R. 1988. ""The firm as a specialist contracting intermediary: Application to accounting and auditing"". Unpublished manuscript. University of Rochester.
Baydoun, N. and R. Willett. 1997. Islam and accounting: Ethical issues in the presentation of financial information. Accounting, commerce & Finance: The Islamic Perspective. Vol.1, No.1 [June]: 1-25.
Chambers, R. J. 1966. Accounting, Evaluation, and Economic Behavior. Englewood Cliffs, N.J.: Prentice-Hall.
Clarke, F, R. Craig and S, Hamid. 1996. Physical assets valuation and Zakat: Insights and implication. Advance in International Accounting 9.
Coase, R. 1937. The nature of the firm. Economica. 4 [November]: 386-405.
http://dx.doi.org/10.1111/j.1468-0335.1937.tb00002.x
Embong, M. R., Taha, R., & Nor, M. N. M. (2013). Role of zakat to eradicate poverty in Malaysia. Jurnal Pengurusan (UKM Journal of Management), 39.
Firdaus, M., Beik, I. S., Irawan, T., & Juanda, B. (2012). Economic estimation and determinations of Zakat potential in Indonesia. Jeddah: Islamic Research and Training Institute.
Frankel, R., M. McNichols, and G. P. Wilson. 1995. Discretionary disclosure and external financing. The Accounting Review. 70 [January]: 135-150.
Gambling, T. E. and R. A. A. Karim. 1986. Islam and ‘Social accounting’. Journal of Business Finance & Accounting. 13 (1): 39-50.
http://dx.doi.org/10.1111/j.1468-5957.1986.tb01171.x
Gambling, T. E. and R. A. A. Karim. 1991. Business and Accounting, Ethics in Islam. London: Mansell Publishing Co.).
Gray, R., D. Owen, and K. Maunders. 1987. Corporate social reporting: Accounting and accountability. Prentice-Hall International.
Haliding, S. (2015). The Critical Aspect on Fair Value Accounting and its Implication to Islamic Financial Institutions. Global Review of Islamic Economics and Business, 1(3).
Hameed, S., Ibrahim, M., & Rizal, Y. (2005). The emerging issues on the objectives and characteristics of Islamic accounting for Islamic business organizations.
Hameed, S. (2010). Islamic Accounting–A Primer. Akauntan Nasional (Currently Accountants Today) Jan-Feb, (2003), 93.
Hamid, S.; R. Craig and F. Clarke. 1993. Religion: A confounding cultural element in the international harmonisation of accounting? ABACUS. 29, No. 2: 131-148.
http://dx.doi.org/10.1111/j.1467-6281.1993.tb00427.x
Haniffa, R., & Hudaib, M. (2014). 12. The Islamic accounting triangle: measurement, disclosure and enforcement. Handbook on Islam and Economic Life, 227.
Haniffa, R., Hudaib, M., & Mirza, A. M. (2004). Accounting Policy Choice within the Shariah Islamiiah Framework. Discussion Papers In Accountancy And Finance, SOBE, University Of Exeter, 2, 4-19.
Healy, P. M. and K. G. Palepu. 1993. The effect of firms' financial disclosure strategies on stock prices. Accounting Horizons. 7 [March]: 1-11.
Healy, P.; K. Palepu; and A. Sweeney. 1995. Causes and consequences of expanded voluntary disclosure. [June]: Unpublished paper, MIT Sloan School of Management.
Hussein, H. S. 1986. Financial intermediation in the framework of Shariah. IDB – IRTI Seminar on Developing a System of Islamic Financial Instruments.
Ibrahim, S. H. M., Wirman, A., Alrazi, B., Nor, M. N. B. M., & Pramono, S. (2004, April). Alternative Disclosure & Performance Measures For Islamic Banks. In Second Conference on Administrative Sciences: Meeting the Challenges of the Globalization Age, King Fahd University of Petroleum & Minerals, Dhahran, Saudi Arabia (pp. 19-21).
Ibrahim, A., Abdullah, A. A., Kadir, M. R. B. A., & AdwamWafa, S. M. G. W. S. (2012). Assessing Financial Reporting on adopting Business Zakat Guidelines on Malaysian Government Linked Companies. International Journal of Business and Social Science, 3(24).
Islamiyah, N., Ridho, A. F., & Muslih, M. R. (2015) Optimizing the Role of Accounting through the Statement of Value Added Approach to Increase the Transparency of Reporting Islamic Financial Institutions in Indonesia
Ismail, A. G., Tohirin, A., & Ahmad, M. A. J. (2015). Debate on Policy Issues in the Field of Zakat on Islamic Bank Business (No. 1435-3). The Islamic Research and Teaching Institute (IRTI).
Ibrahim, A., Kadir, A., Rizuan, M., & Abdullah, A. A. (2013). Perception of Accounting Practitioners on MASB TRi. International Journal of Humanities and Social Science, 3(2), 1-7.
Jensen, M. C. and W. H. Meckling. 1976. Theory of the firm: Managerial behaviour, agency costs and ownership structure. Journal of Financial Economics. 3 [October]: 305-60.
http://dx.doi.org/10.1016/0304-405X(76)90026-X
Johari, F., Ali, A. F. M., AbAziz, M. R., & Ahmad, N. (2014). The Importance of Zakat Distribution and Urban-Rural Poverty Incidence among Muallaf (New Convert). Asian Social Science, 10(21), 35.
http://dx.doi.org/10.5539/ass.v10n21p42
Karim, R. A. A. 1995. The nature and rationale of a conceptual framework for financial reporting by Islamic banks. Accounting and Business Research. 25, No. 100: 285-300.
http://dx.doi.org/10.1080/00014788.1995.9729916
Khan, F. 1986. Discounting for time value: An Islamic perspective. Mimeo, International Institute of Islamic Economics, Islamabad, Pakistan.
Khan, L. A., & Ramadan, H. M. (2011). Contemporary ijtihad: Limits and controversies. Edinburgh University Press.
Lieber, A.E. 1968. Eastern business practices and medieval commerce. Economic History Review. 21, No. 2.
http://dx.doi.org/10.2307/2592433
Littleton, A. C. and V. K. Zimmerman. 1962. Accounting Theory: Continuity and Change. Englewood Cliffs, New Jersey: Prentice-Hall.
Mirza, A. M. 1991. Social reporting and managers’ self-interest. Accounting Research Journal. 7-17.
Mirza, M., & Baydoun, N. (1999). Accounting policy choice in an interest-free environment. In The Islamic Perspective International Conference m in Jakarta, Indonesia (pp. 15-18
Paton, W. and A.C. Littleton. 1940. An Introduction to Corporate Accounting Standards. Florida: American Accounting Association.
Rahman, A. R. A. (2010). Introduction to Islamic Accounting Theory and Practice. Cert Publication, Kuala.
Rahman, A. A., & Bukair, A. A. (2013). The influence of the Shariah supervision board on corporate social responsibility disclosure by Islamic banks of Gulf Co-operation Council countries. Asian Journal of Business and Accounting, 6(2).
Richardson, G. D. 1996. “The striking robustness of theories of voluntary disclosure for explaining corporate disclosure choices in prospectuses, annual reports and other OSC filings”. Unpublished paper, University of Waterloo, September, 1996.
Sarif, S. (2014). Income generation through zakat: the Islamization impact on Malaysian religious institution.
Segrado, C. (2005). Case study “Islamic microfinance and socially responsible investments”. Italy: MEDA Project
Shafii, Z., & Zakaria, N. (2013). Adoption of International Financial Reporting Standards and International Accounting Standards in Islamic Financial Institutions from the Practitioners’ Viewpoint. Middle-East Journal of Scientific Research (Research in Contemporary Islamic Finance and Wealth Management, 13(1), 42-49
Siddiqi,. M. N. 1981. Muslim Economic Thinking: A survey of contemporary literature. The Islamic Foundation, United Kindgom.
Sprouse, R. T. 1987. The case for financial accounting standards. Accounting Horizons. [June]: 83-86.
Sulaiman, M. (2001). Testing a model of Islamic corporate financial reports: some experimental evidence. International Journal of Economics, Management and Accounting, 9(2).
Sulaiman, M. (2003). The influence of riba and zakat on Islamic accounting.Indonesian Management and Accounting Review, 2(2), 149-167.
Sulaiman, M. (2001). Testing a model of Islamic corporate financial reports: some experimental evidence. International Journal of Economics, Management and Accounting, 9(2).
Talib, A. A., and T. S. Phay. 1998. The Islamic economic system and riba: The foundation of Islamic banking. Accounting, Commerce & Finance: The Islamic Perspective Journal. 2, No. 3: 51-82.
Tomkins. C. and R. A. A. Karim. 1987. The Shari’ah and its implications for Islamic financial analysis: An opportunity to study interactions among society, organisation, and accounting. American Journal of Islamic Social Sciences. 4, No. 1: 101-115.
Usmani, M. I. A., & Qazi, B. A. (2010). Guide to Zakah: Understanding and Calculation.
Wartick, S.L. and P.L. Cochran. 1985. The evolution of the corporate social performance model. Academy of Management Review. 10, No. 4.
Yaya, R., & Hameed, S. (2004). Objectives and Characteristics of Islamic Accounting: Percepation of Muslim Accounting Academician in Yogyakarta, Indonesia. In International Conference Pan Pacific
Zaid, O. A. (2004). Accounting systems and recording procedures in the early Islamic state. The Accounting Historians Journal, 149-170.
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2016-04-15
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Ries Ahmed, E., Halim Bin Aiffin, K., Yousif Alabdullah, T. T., & Zuqebah, A. (2016). Zakat and Accounting Valuation Model. Journal of Reviews on Global Economics, 5, 16–24. https://doi.org/10.6000/1929-7092.2016.05.02
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