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* Standard accounting definition and evaluation:
Revenues list is prepared at the end of certain periods and generally at the end of the fiscal year. This process is called profit and loss accounting.

* Evaluation and Legal Judgment
Revenues must be estimated in accordance with the generally accepted legal rules concerning earnings, especially those related to what is lawful and what is prohibited. Ill-gotten revenue should be excluded from the base of Zakah. In addition, the expenditure should be governed by the related general legal rules, i.e. to spend without either squandering or miserliness. The items included in the revenue statement do not affect Zakah directly. Rather, the base of Zakah is affected by the commitments to be deducted, as will be shown later.

1. Calculating Zakah on revenue

*Standard accounting definition and evaluation:
Revenue represents the cash flow earned by a company or an institution during a fiscal year, which had a tangible effect by increasing the inventory. Revenues include those accrued through sales, real estate, investments and commissions. This is governed by the principle of maturity in standard accounting.

* Evaluation and legal judgment:
Revenue is already included in the Zakah base such as on increase in clients and debtors or on increase in cash in banks and exchanges or cash at hand. Hence, they are not added again to the Zakah base, in order not to pay Zakah twice on the same base.

2. Calculating Zakah on expenses

* Standard accounting definition and evaluation:

General expenses are those that have been spent on services in order to facilitate the activities in an establishment or a company such as: wages, rentals, transfer and transportation and are divided into:
- Direct expenses (e.g. manufacturing expenses.)
- Indirect expenses (e.g. marketing and administrative expenses.)

* Evaluation and legal judgment:
The expenses for services have nothing to do with the object of the commodity. Such expenses are not included in the base of Zakah as explained earlier. In addition, these expenses are considered a decrease in the base of Zakah. Hence, they cannot be subtracted a second time thereby diminishing the Zakah base (in a way that does not make it possible to pay the minimum amount for Zakah).

3. Calculating Zakah on receivable interest

* Standard accounting definition and evaluation:
Receivable interest refers to interests drawn from amounts of money deposited in usurious banks, interest from securities, etc., which are included in the revenues list or in the profits and losses statement. Standard accounting does not differentiate between lawful and prohibited revenue. According to this, interest revenue is to be added to the whole inventory.

* Evaluation and legal judgment:
Interests presented by banks, securities, investment certificates, treasury bills, etc. are declared unlawful by the Holy Qur'an and Sunnah. Ill-gotten money must be avoided and immediately spent in charitable endeavors, except building mosques or printing the Holy Qur'an. It is forbidden to mix interest with the inventory of the payer of Zakah. Interest cannot be paid as Zakah for Allah the Almighty is nothing but pure and good and He accepts nothing but that which is pure and good.


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