Islamic perspective note

AL -

IJARAH

DEFINITION

Comes from Arabic word ‘al-ajr’ which means wages or rewards for a perticular work done. Ijarah also means employment of person through the payment of wages for the work done. Al-ijarah is therefore a contract to give exclusive possession of physical properties or to render services to a person in return for some rental or wages for a specified period.

PILLARS OF AL-IJARAH

RENTAL / WAGES

BENEFIT / SERVICE

TWO CONTRACTING

PARTIES

SIGHAH

TWO CONTRACTING PARTIES

There are two contracting parties namely the owner of the leased asset or service provider (lessor) and the party who reaps the benefits or services of the leased asset (lessee). Parties involved in a contract must be mature and rational. A contract is not valid when it involves children and persons of unsound mind.

SIGHAH

Sighah is the formal exchange between the contractual parties indicating their willingness to enter into the agreement. It consists of an offer on the part of one contractual party and an acceptance by the other party, either of which must be clearly understood. Agreement and supply must be parallel, meaning all terms in agreement must be adhered to. There is no time gap between supply and agreement and it is unconditional.

BENEFIT/SERVICES

Service must be of value. The owner or service provider must be able to provide an asset or a service that is of benefit to the hirer. Take for example houses that are to be leased. The owner cannot lease a house which is in a dilapidated or poor condition to the tenants. However, there are limitations to the types of benefit or services that can be offered. For example, one cannot hire another to perform hajj on one’s behalf to achieve pilgrimage. The benefit or service provided must be permissible, agreeable and known by both parties from all aspects.

RENTAL/WAGES

The payment must be free from any elements of usury and the amount and payment period must be agreeable and known by both parties.

WAQF (WAQAF)

DEFINITION

Waqf means ‘to stop’, ‘contain’ or ‘to preserve’. The meaning here is to prevent the buying and selling, gifting or inheritance of a tangible asset or property. As such, the asset or property remains in perpetuity until the end of time for the benefit of Islam as a whole or for a specified group who have been pre-determined.

TYPES

SPECIAL WAQAF• Refer to the individual (wakif) or group

who give money or property for a specific purpose.

• Example, Amirul give money to built mosque, for religious purposes.

GENERAL WAQAF• Refer to an individual (wakif) or group

which give money or property for Islamic welfare purposes without any specific objective.

• Example, Firdaus give money to buy a rock chair at the playground near his house. So, all the people can sit at the chair when they go to that playground.

CONDITIONSWAKIF

( founder )MAUQUF

( beneficiaries )

PROPERTY( object )

AKAD(confession of waqaf)

Must a sound of mind and mature, can handling financial and not bankruptcy.

The founder’s family, poor, travelers and public.

The object must be legal in law and wakif can control it.

In writing and announced.

CONTRACT VOID1. The object destroyed or missing.2. The contract was announced void by the

Islamic association or law.3. The founder (wakif) announced to void the

contract.

AssetsLaibility

EXEMPT OF ZAKAT

ASSETSUnless acquired wiht the clear

intention to resell For example: A person buys a house

which is normally exempt from Zakat, with the intention of reselling the house at a profit, then the market value of the property, calculated as at the end of the relevant Zakat year, will be subject to Zakat .

Equipment of all classes, books of value, time share unit.

LAIBILITY Liabilities, for Zakat purposes, may be divided into two categories:

Liabilities incurred in acquiring assets which are exempt from Zakat.

For example, mortgage on immovable property.

Liabilities incurred in acquiring assets which are subject to Zakat.

For example, trade creditors (suppliers of business merchandise inventory), and bank overdraft.

AssetsLaibility

EXEMPT OF ZAKAT

ASSETSUnless acquired wiht the clear

intention to resell For example: A person buys a house

which is normally exempt from Zakat, with the intention of reselling the house at a profit, then the market value of the property, calculated as at the end of the relevant Zakat year, will be subject to Zakat .

Equipment of all classes, books of value, time share unit.

LAIBILITY Liabilities, for Zakat purposes, may be divided into two categories:

Liabilities incurred in acquiring assets which are exempt from Zakat.

For example, mortgage on immovable property.

Liabilities incurred in acquiring assets which are subject to Zakat.

For example, trade creditors (suppliers of business merchandise inventory), and bank overdraft.

Definition Of The ConceptBaitulmal

The Concept Of Accounting From Islamic

Perspective

In Arabic treasury known as the treasure house.

It is also known as the national treasuryA financial institution that serves to provide

the necessary public property or place of storage of all valuables.

It also serves as an investment property on Muslims to establish Islamic banks active and dedicated.

Definition Of Baitulmal

Eradicate povertyDistributing alms to the qualified and entitled toFighting crime and social ills

Provide a variety of basic needsWelfare of the community that need itRoads, investment, social activities beneficial

Improve the livelihood of MuslimsImprove educationProvide scholarships or financial aid as those that need it.

Keep the endowed propertyThe role of taking care of all the country's wealth

The Role and Importance Of Treasury

Baitulmal Various storage properties

Islamic countries 2 type :

1. Special property CharityZakat fitrah

2. General property FaiGhaimahma'adinExtractive

People around the country

hgyu It is only subject to the property as

zakat zakat of gold, silver, agriculture, pertenakan, minerals, business and income and zakat fitrah

Mustahiq or recipients of zakat1. amil 2. poor 3. converts 4. Riqab 5. gharimim 6. isabillah 7. ibn sabeel

Difference Treasury and Central Zakat

Pusat Zakat

BAI’ BITHAMAN AJIL

(BBA)

DEFINITION OF BBA

Sale of goods on a deferred payment basic at a price, which includes a profit margin agreed by both parties.

Payment period is the agreement between the two parties.

Payment can be paid by cash or by installment. Interest payment can be avoided as the customer

is paying the sale price which is that same as interest charged on a loan.

MURABAHA

1.

• Literally this means a sale on mutually agreed profit.

• It is a contract of sale in which the seller declares his cost and the profit.

2.

• Murabaha has been adopted by Islamic banks as a mode of financing.

• As a financing techique, it can involve a request by the client to the bank to purchase a certaine item for him.

3.• As a financing techique, it can involve a

request by the client to the bank to purchase a certaine item for him.

ZAKAT BASE

ZAKAT BASE

The net adjusted

amount of zakat assets and liabilities used for or

derived from business

activities.

An entity is advised to refer to the relevant zakat

authorities for further

An entity may apply one of the following method by JAKIM 2011.

Two methods:

Adjusted working capital method.

Adjusted growth method.

MEASUREMENT OF ASET AND LIABILITY FOR

ZAKAT

MEASUREMENT OF ASET AND LIABILITY FOR ZAKAT

• Current capital = Owner’s Equity + Debt Financial Capital + Profit – Fixed Asset – Other Non Current Assets

Urfiiyah Method

• Net Current Asset = Current Asset (full ownership) – Current Operating Liability only

Syar’iiyah

Method

Financial Accounting 2MUDARABAH

MUDARABAHINTRODUCTION

BUSINESS OF MUDARABAH

TYPES OF MUDARABAH

DISTRIBUTION OF PROFIT

TERMINATION OF

MUDARABAH

INTRODUCTION

Rabb-Ul-Maal gives money to another for investing.

Investment come from the first partner (Rabb-Ul-Maal)

Management and work is responsibility of the other

partner ( Mudarib)

BUSINESS OF

MUDARABAH

Rabb-Ul-Maal Mudarib

- One Rabb-Ul-Maal, one Mudarib

Or- One Mudarib, many Rabb-Ul-

Maal

The profit divide

based on the

agreement

TYPES OF MUDARABAH

Al-Mudarabah-Al-Muqayyah-Dah (restricted only to such business as point out by Rabb-

Ul-Maal)

Al-Mudarabah-Al-Mutlaqah ( the Rabb-Ul-Maal open it to Mudarib to undertake any

business he deems to fit.

DISTRIBUTION OF PROFIT

Must be pre-determined by parties.

Money that mudarib got is based on the profit.

Can be terminated by

two parties

Hanafi and Hanbali jurist

Shafe’I and Maliki jurist

TERMINATION OF MUDARABAH

ZAKAT DISTRIBUTION

ZAKAT FITRAH:OBLIGATORY ON EVERY

PERSON IS 2.3KG OF THE STAPLE FOOD OF THE

TERRITORY IN WHICH THE PERSON

ZAKAT BUSINESS:((CURRENT ASSET-CURRENT LIABILITY) +/- CORDINATION x % OF MUSLIM SHARE x ZAKAT

ABILITY (2.5%))

ZAKAT OF SHARE:2.5% THE VALUE OF LOWEST

SHARE-SHARE WHICH IS OWN FOR ONE YEAR MINUS FOR SHARED BORROWED

ZAKAT DISTRIBUTION

ZAKAT HARTA:

ZAKAT RATE IS 2.5% OF TOTAL ASSETS/

ZAKAT EPF:-2.5% ON CONTRIBUTION THAT ISSUED ONCE MONEY ISSUED.-2.5% ON CONTRIBUTION EVERY EMPLOYEE IS BASED ON ANNUAL STATEMENT

ZAKAT OF SAVING:CONTRIBUTION OF WORKERS AND EMPLOYER'S TO KWSP

PEOPLE PROVIDENT FUND,SOLDIERS PROVIDENT

FUND(LTAT) ARE REQUIRED TO PAY ZAKAT

ZAKAT DISTRIBUTION

ZAKAT OF LIVESTOCK:PROPERTY ZAKAT THAT

COMPUSORY TO BE TAKEN OUT WHEN PERFECT THE CONDITION.

ZAKAT OF GOLD:-NISAB ZAKAT GOLD USED = 200g-GOLD ZAKAT NISAB UNUSED = 85g

ZAKAT ON CROPS:BASIC FOOD WHICH HAS REACHED THE STAGE OF

SATISFACTION FOR THE STATE WHICH HAS 363 GATANG/1300g

LIKE PADDY,WHEAT,CEREAL AND SO ON

Grand of property that occurs

during the life of a hibah provider .

HIBAH

DEFINITION :

WHAT KIND OF ASSETS KIND BE GIVEN OUT AS HIBAH

Items that are really exists .

Ownership can be

transferred .

Has value .

Assets for Hibah must not be

part , of another assets that

cannot be Hibah

SIMILARITIES DONATION

AND HIBAH

Donation and Hibah are both a form of generosity

owned .

Donation and Hibah is giving freely without

expecting giving back .

BENEFIT OF HIBAH

Assets under Hibah are not included in Estate of decreased .

Inheritance can be made quickly .

DIFFERENCES BETWEEN DONATION AND HIBAH

DONATION HIBAH

Giving something that is based on concern for the poor and needy .

Based on the provision of natural of love .

Grants are usually in the form of money .

This gift is usually in the form of goods.

Donation legal is Sunnah Muakkad .

Hibah legal is Sunnah .

DEFINITION OF MURABAH

- An acceptable form of credit sale

under Sharia

( Islamic religious law ). At a price which includes a profit margin

agreed by both seller and buyer

THE CONDITION

Buying and selling price,other costs and the profit margin must be clearly stated during the sale agreement.

DEFINITION According to the islamic belief

zakat purifies wealth and soul. Zakat is a payment or tax of

property and give to who reserve.

TYPES OF ZAKAT ZAKAT FITRAH Acts as a purification for fasting people

from their sins and also to be made as resources to serve the need of the asnaf during 1 syawal.

ZAKAT ON PROPERTY Posted by those who have some

property with the rate set to islam.

CONDITION TO PAY ZAKAT Islam Independent Perfect possession Reaching nisab Reaching haul Intention to trade

THOSE WHO ARE ELIGIBLE TO RECEIVE ZAKAT Fakir Poor Amil Converts Riqab Fisabilillah Al-Gharimin Musafir

IMPORTANCE Create strengthens the love between

the rich and poor. To purifies wealth and soul. Test of faith and taq’wa.

*THE END*

SPECIALLY THANKS TO DAT3B DEC

2014 FOR PREPARING THIS

NOTES AND SLIDES…