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These are funds invested in various assets. Establishments make these investments when there is a surplus in their funds after financing basic activities. The goal behind these investments is either to earn revenue or just to enter into trade.

Long-term investments include the following:
01.
Investment in bank notes.
02.
Investment in real estates.
Evaluation and legal judgment of these investments depends on their types.
Investment in shares
* Standard accounting definition and evaluation:
The share is a portion of the capital of a joint-stock company. The share- holder is considered to be a partner in the company's net assets. The share has many values, including:
- Basic value:
 
This is the value that is determined at its first issue.
- Market value:
 
This is the value that is determined on the basis of supply and demand within the banknote market. It is evaluated on the basis of the lesser of the two; the cost or the market, along with determining a recess assignment in the case of a share's decline if market value was less than the cost value.
* Evaluation and legal judgment:
Shares are evaluated according to market value for the purposes of calculating Zakah. If the dealings of the company that released or issued the shares were lawful, taking possession of these shares becomes lawful. But if its activities were unlawful, it becomes forbidden to possess these shares.
As for Zakah: If the company that released the shares paid Zakah, the share-holder is not asked to pay it again. But, if it did not, the share- holder is asked to pay it according to the purpose of possessing such shares.
 
1. Investments in shares meant for earning revenue
* Standard accounting definition and evaluation:
These are investments in the shares possessed for growing and bringing in revenue. These are termed 'long term investments'. These are intermediate between fixed and interchangeable assets. They are evaluated on the basis of the lesser of the cost price or market value. Along with determining a recess provision in case of a decline in market value was less than the cost value.
* Evaluation and legal judgment:
a.
If the share-holder is able to know the portion of Zakah due upon the share as part of the amounts possessed by the company upon which Zakah is due, he is asked to pay Zakah for that portion at the rate of 2.5%.
b.
If he cannot know, he must add the revenues gained therefrom to the rest of his wealth upon which Zakah is due and calculate the Zakah due on the basis of the whole amount at the rate of 2.5%.
Note:
Evaluating for the purposes of Zakah is based on market value; thus, the recess provision in case of banknote' price decline is not to be subtracted from the amounts upon which Zakah is payable or due.
 
2. Investment in shares meant for trade
* Standard accounting definition and evaluation:
These are investments in shares that are bought for the purpose of dealing in trade, i.e. reselling them in order to make a profit. These are evaluated on the basis of the lesser of the cost or the market, along with determining a recess provision if market value was less than the cost value.
* Evaluation and legal judgment:
Investments in shares meant for trade are evaluated according to the market price upon the completion of the year and added to other assets or amounts upon which Zakah is due.
 
3. Investments in the shares of subsidiary companies (aimed at bringing in revenue)
* Standard accounting definition and evaluation:
A subsidiary company is one in which the parent company possesses, directly or indirectly, more than 50% of the shares that have the right to vote. It is evaluated on the basis of the costs or the market, whichever is less, along with determining a recess provision if market value was less than the cost value.
* Evaluation and legal judgment:
Zakah for a subsidiary company is independently calculated. Then, the parent company's share thereof is determined on the basis of the ratio of the shares it possesses. The profit is added to the amounts upon which Zakah is due, by the parent company. If subsidiary company did not pay Zakah on its own part.
 
4. Investments in the shares of sister companies
* Standard accounting definition and evaluation:
Sister companies differ from subsidiary's. Investment in the shares of these companies is deemed a long-term investment. It is evaluated on the basis of costs or the market, whichever is less. Along with deducting a recess provision if the market value was less than the cost value.
* Evaluation and legal judgment:
We apply the same judgment as that related to investment in the shares with the purpose of earning revenue. The recess provision related to their prices is not to be subtracted from the amounts upon which Zakah is due.
 
5. Investment in the shares of a purchased company
* Standard accounting definition and evaluation:
Sometimes it is permitted for a company to purchase its own shares from the market of bank note exchange but with certain restrictions and legal terms. This is done for trading and not for earning revenue, as the company will resell them when it needs funds or cash. These shares are evaluated on the basis of the purchase price.
* Evaluation and legal judgment:
These are evaluated on the basis of the market value upon completion of the year. They are to be added to other assets or amounts on which Zakah is payable.
 
6. Investment in securities
* Standard accounting definition and evaluation:
Securities are monetary tools or means issued to a holder or bearer. They represent a debt and debtor relationship and also bear interest that is payable on determined dates. The loan-taker commits himself to pay the interest in addition to repaying the original amount (value of the security) on the prescribed repayment date. Securities are evaluated at cost price considering the deducted or added amounts. If they were exchanged and handled in the market, the lesser price will be applicable. A recess provision related to their prices is to be determined if the market value was less than the cost value.
* Evaluation and legal judgment:
Securities are to be evaluated on the basis of their original value, i.e. the amount of security. According to Islamic Shari`ah, dealing in securities is illegal because it involves interest. However, the holder must pay Zakah for the cost of the securities by adding them to the assets or amounts upon which Zakah is due. The interest earned must be spent in charity except in constructing mosques or printing copies of the Holy Qur'an. Spending such interest will return no reward to the holder; it is just a means to get rid of the ill-gained money. This interest must not be included in the amounts upon which Zakah is payable.
 
7. Investment in treasury bills
* Standard accounting definition and evaluation:
Some governments take loan from the local market by issuing bonds with interest. These 'treasury bonds' do not differ from normal bonds. Treasury bonds are evaluated on the basis of their cost price with the addition of the commitments from the date of purchase.
* Evaluation and legal judgment:
Treasury bonds are evaluated on the basis of the original value at which they were issued, i.e. the amount of the bond. It is not lawful to deal in treasury bonds as they earn interest. Legal judgments pertaining to all kinds of bonds can be applied to treasury bonds.
 
8. Investment in real estate intended to earn revenue
* Standard accounting definition and evaluation:
This represents the amounts invested in land and buildings of various kinds. They are possessed only for earning revenue.
They are evaluated on the basis of the accounting principle of the lesser of the two: the cost or the market value.
* Evaluation and legal judgment:
No Zakah is payable on the original value of real estate. Its net revenue is to be added to the amount counted for Zakah. Zakah is then taken from the whole amount at the rate of 2.5%.
 
9. Investment in real estate meant for trade
* Standard accounting definition and evaluation:
This form of real estate includes lands and buildings of various kinds that are exploited in trade. They are evaluated on the basis of the accounting principle of the lesser of the two: the cost or the market value.
* Evaluation and legal judgment:
They are evaluated on the basis of their market value and added to the present amounts liable to Zakah.
 

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