These are long-term assets known in accounting as "fixed assets" e.g. lands, buildings, furniture and cars. They are not meant for resale, and can be divided into:
- Fixed assets that are meant for use and operation (durable goods).
- Fixed assets that bring in revenue.
The following is s definition and evaluation of fixed assets according to standard accounting practices, and the evaluation and legal judgment pertaining to each fixed assets item, showing its degree of accountability with regard to Zakah:
1.
Material fixed assets meant for use and operation (durable goods)
*Standard definition and evaluation:
Assets, such as real estate, machines, cars, and furniture, are owned and meant for use only, not for resale to gain a direct profit. These are to be evaluated on the original cost with depreciation.
*Evaluation and legal judgment:
No Zakah is paid on material fixed assets for use and operation. Also, the value of its depreciation is not to to be subtracted as commitments from the assets that Zakah is paid on.
2.
Material fixed assets that accrue revenue
*Standard accounting definition and evaluation:
Assets that are possessed to accrue revenue such as real estate, and rented cars. These are to be evaluated on the basis of the original cost after subtracting its depreciation.
*Evaluation and legal judgment:
No Zakah is paid on these assets. Their net revenue is to be added to other assets liable to Zakah at a rate of 2.5%. This is the ruling chosen by the Islamic Jurisprudence Academy in Jedda.
3.
Intellectual fixed assets meant for use and operating
*Standard accounting definition and evaluation:
Intellectual useful rights that aid in the operation of different activities and are not meant for revenue.
They are evaluated on the basis of their cost which represents the sum paid for their attainment in addition to other expenses deducted from their consumption.
*Evaluation and legal judgment:
No Zakah is paid on these assets because they are connected with the fixed assets for their use with the aim of providing aid to the operation process.
4.
The intellectual fixed assets the accrue revenue
* Standard accounting definition and evaluation:
These are non-material rights meant for accruing revenue or income such as copyrights and patents that are utilized for a determined period against a financial return.
* Evaluation and legal judgment:
No Zakah is payable on these assets. Their net revenue is added to the amounts upon which Zakah is due and 2.5% rate is to be taken thereof.
Points on fixed assets:
1.
Depreciation of fixed assets represents the reduction in value due to an object's operation. It is to be calculated annually according to different depreciation methods.
The legal judgment states that depreciation is not to be considered as part of the commitment subtracted from assets liable to Zakah, for such assets are not included in the amounts upon which Zakah is due.
2.
Interest on loans to finance fixed assets: Some accountants are of the view that this should be added to the cost of these assets. This is referred to as Interest Capitalization.
Legal Judgment:
This Interest is seen as pure usury. If already paid, they would be excluded from the assets liable to Zakah. But, if they are not paid, there is no need to subtract them from the assets liable to Zakah, for this interest is not considered as legally payable debt, even if in accordance with civil law.
Funds designated to finance the maintenance and preserving of fixed assets obtained for use.
The legal judgment:
this is not to be subtracted from the assets upon which Zakah is liable for it has not already been spent.


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