General Manual of Zakat

Application Examples: The data below pertains to a company as on December 31, 2019 AD, and accordingly it is required to calculate zakat. Statement of Financial Position As on December 31, 2019 AD (amounts in SAR) Assets SAR SAR Current Assets Cash in Hand and at Banks Investments at fair value through profit or loss. Other Receivables and Trade Receivables Stock Prepaid Expenses and Other Debit Balances Total Current Assets Non-Current Assets Dues from Related Parties Projects in progress (assets) Investments in subsidiaries. Real Estate Investments Plant, Property and Equipment (PP&E) Goodwill and intangible assets Other Long-Term Assets Total Non-Current Assets Total Assets Liabilities and Partners’ Equity 2019 AD 2018 AD Current Liabilities SAR SAR Creditor banks Accounts Payable Accrued Expenses and Other Credit Balances Deferred Revenue Advance Payments from Customers Dividend payable Zakat Provision Obligations under capital lease Tradable Part of a Term Loan Total Current Liabilities Non-Current Liabilities End-of-Service Indemnity Provision Term Loan Dues from Related Parties Obligations under capital lease Total Liabilities Partners’ Equity Capital Statutory Reserve Retained Earnings Total Partners’ Equity Total Liabilities and Partners’ Equity Income Statement For the Period Ending on January 01, 2020 AD to December 31, 2020 AD Amounts in (SAR) 2019 AD SAR Revenues Cost of Revenues Gross Profit General, administrative and marketing expenses Share in (losses) of subsidiaries Share of results of companies invested in equity method Other Losses (Net) Income from Operations Financing Expenses (Net) Net Profit before Zakat and Income Tax Zakat Year net profit Provision movement data is as follows: Item First of Year Balance Accrual During the Year Used During the Year End of Year Balance SAR SAR SAR SAR End-of-Service Indemnity Provision Provision for Bad Obligations Total Zakat Calculation: Item Amount Modification of Activity Result SAR Net Profit for Zakat Purposes Adding: End of service provision accrual during the year Adding: Doubtful debt provision accrual during the year Total Modification of Activity Result Additions to ZB Equity SAR Capital Statutory Reserve Retained earnings minus dividends Adjusted year profit Dividend payable Provisions for the Bad Obligations at the Beginning of the Year Debts by Taxpayer End of service provision (first year balance minus used) Deferred Revenue Advance Payments from Customers Loans (obtained on AD)( Dues to Related Parties Deductions from ZB SAR Projects in progress (assets) Investments in Local Subsidiaries Real estate investments (residential compounds for rent) Property and Equipment Goodwill and intangible assets Total Deducted Assets Zakat base excluding the adjusted profit for the year Zakat at 2.578% of the Zakat base without the adjusted profit for the year Adjusted profit Zakat at 2.5% of the adjusted profit Total Zakat 6. Modification of Activity Result The activity result (book profit or book loss) is adjusted to reach the adjusted net profit for zakat purposes.16 Item Amount SAR Net book profit or loss for the year Adding: Non-Deductible Expenses Net Profit Adjusted for Zakat Purposes